Colorado Sen. Michael Bennet makes a stop at Confluence Park in Denver on Aug. 24, 2021. (Chase Woodruff/Colorado Newsline)
Wednesday marked the last time 600,000 Colorado families will get a monthly child tax credit payment unless Congress acts to extend the program through the pending Build Back Better Act or — even less likely — through standalone legislation.
Sen. Michael Bennet, a longtime champion for the child tax credit, said he is working to get the program baked into the legislation to avoid a lapse in the payments in the new year. About 57,000 children in Colorado have been lifted out of poverty because of the credit, according to his office.
If the payments skip or end completely, “We’d see a lot of those kids fall back into poverty and we’d see a lot of families who are benefitting from the credit and using it to pay for rent and groceries and — really importantly — child care, they’d lose the benefit of that,” Bennet said in an interview.
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The expanded child tax credit was included in the American Rescue Plan Act that was passed in March. It increased the existing credit to $3,600 for children under 6 years old and $3,000 for other children and allowed families to decide whether to get that money in a lump sum or in monthly payments. Additionally, the expanded credit became available to families previously excluded because they made too little income to pay taxes.
The payments benefitted 1 million children in Colorado, according to Bennet’s office.
“The CTC payments have brought much needed relief to hundreds of thousands of Colorado families, and that relief is about to run dry just in time for the holidays,” Jennifer Greenfield, the associate dean for the University of Denver Graduate School of Social Work, said on a Wednesday Zoom panel organized by the Colorado Fiscal Institute.
The Internal Revenue Service has said Congress needs to authorize January’s payment by Dec. 28 to avoid delays.
For George Davis, a father of two children from Denver, the extra monthly income has been important in paying for clothing, groceries and rent.
“Providing a warm and safe home for my children, it takes a pretty big bite — or a daddy bite as my daughter often says — out of my monthly expenses,” he said during the CFI panel. “$300 may not be a lot to some people, but in the Davis household, it means the world.”
He said the money allowed him to work fewer hours and attend events like his son’s school awards ceremony or his daughter’s concert.
The tax credit expansion was for just one year, however, and the final monthly payment hit on Dec. 15. While Bennet’s goal is a permanent expansion, he is hoping to at least get one more year of the credit included in Build Back Better.
One snag in that plan is the reluctance of Sen. Joe Manchin, a Democrat from West Virginia, to support not only the expanded child tax credit but also other provisions in Build Back Better. In conversations with Bennet, Manchin said he is worried about the price tag and whether it incentivizes parents to stay home from work.
“I think it’s very clear that countries that have similar tax allowances have higher workforce participation rates than our country does because people are able to pay for a little bit of child care,” Bennet said. “What I’ve said to Joe is, ‘Let’s let this go for a year so that you can see how you feel about it at the end.’ I think he’s going to discover what the data shows, which is that this is pro-work.”
The $1.9 trillion Build Back Better legislation passed the House in November.
If the credit isn’t passed with Build Back Better, it could potentially be brought up as an independent bill next year. If that happens, it would need 60 votes, rather than the 50 needed to pass Build Back Better through the reconciliation process.
“If we can’t get it done with Build Back Better, that’s what we’re going to have to try and do,” Bennet said. “Like everything in Washington right now, it will be challenging.”
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