President Joe Biden’s legislative agenda is at risk, and the extension of an enhanced tax credit assisting parents is caught in the middle—with Joe Manchin. In recent weeks, this has been a common, but not always fun, place to be.
The West Virginia senator has long been skeptical of the Build Back Better Act, the roughly $2 trillion public investment bill that runs the gamut from childcare to health care to climate change and overhauls tax policy along the way. Included in the Build Back Better Act, which passed the House in November, is a one-year extension of the expanded child tax credit. But recent comments from Manchin have thrown the future of the credit in doubt.
The child tax credit was expanded by the $1.9 trillion coronavirus relief bill that passed in March. The amount of the credit was increased to $3,600 per year for children under age 6 and $3,000 for children between the ages of 6 and 17, for single filers earning under $75,000 and couples earning under $150,000. It was also distributed through monthly payments, instead of parents having to claim the credit in bulk during tax time. Perhaps most critically, the credit for the first time was made fully refundable, meaning that it could be claimed by low-income families too poor to file taxes.
If Congress does not pass the Build Back Better Act before December 28, the IRS will not be able to process the next installment of the child tax credit before January 15, meaning that parents will miss out on a payment. Even if the bill is later passed and made retroactive, it would still be a loss in consistency and stability for parents relying on a monthly check.
In a statement released Thursday evening, Biden indicated that the bill would not be passed in the immediate future. “We will advance this work together over the days and weeks ahead; Leader Schumer and I are determined to see the bill successfully on the floor as early as possible,” Biden said, referring to Senate Majority Leader Chuck Schumer. He added that “my team and I are having ongoing discussions with Senator Manchin; that work will continue next week.”
Manchin had previously averred that the credit could be further means-tested, or tied to work requirements. Democrats who support the child tax credit had wanted it to be extended for longer but agreed instead to a shorter extension without work requirements. But on Wednesday, Manchin introduced another condition, indicating a belief that the credit should be funded for 10 years, which the Congressional Budget Office estimates would cost $1.6 trillion. Manchin told reporters on Wednesday evening that he wanted “to make sure that we’re upfront and transparent with the public” about the 10-year cost. (A person familiar with Manchin’s discussions with Biden told The New Republic on Wednesday that Manchin has not told Biden what he believes should or should not be in the bill, but that he believes that a $1.75 billion bill should be the total for 10 years.)
A House Democratic aide told The New Republic that advocates for the child tax credit were “thrown for a loop” by Manchin’s position. Biden had told moderate Democrats during a meeting earlier this fall that the one-year extension of the credit was the agreement worked out between Manchin and the White House, said the aide, who was familiar with the discussion. “I think we’re all perplexed by this,” the aide said.
That sentiment of confusion was echoed by Senator Michael Bennet, a champion of the child tax credit in the Senate. “My understanding is, he only wants the child tax credit for one year, but then it seems like he wants to pay for it for 10 years. I’m not sure I understand that,” Bennet told reporters on Thursday. “I would be delighted to have it for 10 years and pay for it for 10 years.” Bennet also said that he had not previously heard Manchin talk about extending it for 10 years, but only for one year. (Ironically, Democrats believed that extending the credit by one year would create enough urgency to convince Congress to act again instead of letting it expire; Democrats are now seeming to let it expire earlier, undercutting that very argument.)
Senator Sherrod Brown, another staunch advocate for the credit in the Senate, told TNR that he would not be opposed to a 10-year extension. “I understand cutting it from 10 to one because of the cost and the budget windows and all that, but I’d love to have 10 years,” Brown said.
Bennet later told reporters that he would also be “happy” to talk about a permanent or 10-year extension of the credit. Bennet and Manchin spoke for several minutes on the Senate floor about the credit. Senator Cory Booker, another Senate champion of the credit, and Senator Kirsten Gillibrand also participated in the impassioned conversation.
Manchin insisted on Thursday that he supported the child tax credit, although his previous comments appear to be to the contrary. “I’ve always been for child tax credits,” he told reporters.
Despite his apparent reticence, data shows that West Virginians have benefited from the credit. With the inclusion of full refundability in the expanded credit, 170,000 children in West Virginia had access to the credit for the first time. In August, the West Virginia Center on Budget and Policy found that food insufficiency decreased among families with children after initial payments. According to the Center on Budget and Policy Priorities, a left-leaning think tank, roughly 90 percent of low-income West Virginians were using their child tax credit payments on basic needs and education. In another study, the CBPP found that 346,000 children in West Virginia would be affected if the child tax credit expired, and 50,000 would be at risk of slipping below the poverty line or sinking deeper into poverty.
Representative Rosa DeLauro, a key champion for the credit in the House, alluded to these statistics in a statement to TNR. “I am ready to make the expanded and improved Child Tax Credit permanent, and so are the 346,000 children in West Virginia who received yesterday’s check,” DeLauro said.
JoAnna Vance, a recovery fellow at the American Friends Service Committee in West Virginia and a mother of three who is receiving the credit, said that her family had used the credit for such basic needs as medical bills, school supplies, and new tires. When her husband got Covid-19 and had to take two weeks off to quarantine but was only paid for one, the monthly check helped them stay afloat.
“The child tax credit has helped our family a lot. Not so much to stay above water, but to help us get that financial stability that we didn’t have before,” Vance told TNR in an interview Thursday. If the credit isn’t extended, she said, “that’s just going to cut into all of the savings and all of the financial stability we have built up.” In her advocacy work, Vance said she has collected “hundreds of stories” about how the credit benefits local families. “If the Build Back Better agenda isn’t passed by December 28, I’m very worried for families in West Virginia about how they’re going to get through in January.” Vance earlier on Thursday delivered an open letter to Manchin’s office in West Virginia sharing her concerns with him, hoping they will reach her senator in Washington.
Meanwhile, at the Capitol, multiple Democrats piled on with expressions of surprise and vexation at Manchin’s seemingly sudden change of position. Senator Dick Durbin, the majority whip, told reporters on Thursday morning that he was “stunned” by Manchin’s position on the child tax credit, as well as “frustrated and disappointed” by the lack of action on the Build Back Better Act.
“I can tell you the level of emotion at our caucus about the child tax credit is very high,” Durbin told reporters. “We were so proud of what we’ve accomplished there, and for this to come up as an issue toward the end was stunning.”
Manchin is hardly the only obstacle to passing the Build Back Better Act. There are several parliamentary issues that remain unresolved, and lawmakers have yet to reach an agreement on a cap for the state and local tax deduction. But Manchin’s continued skepticism about one of the cornerstones of Biden’s agenda puts him at odds with the rest of his party. “We need to get that child tax credit every single month. Families can’t afford for us to fall behind,” Senator Elizabeth Warren told TNR.
When asked by reporters if he believed the child tax credit could be axed from the bill, Bennet replied: “We can’t let it happen. We cannot let it happen.”