U.S. Sen. Michael Bennet speaks during an election night watch party for Colorado Democrats at The Art hotel in Denver on Nov. 8, 2022. (Carl Payne for Colorado Newsline)
As Congress nears the end of its lame duck session, one of Democratic U.S. Sen. Michael Bennet’s top priorities is seeking support for expanding the child tax credit again.
An expanded child tax credit passed as part of the American Rescue Plan Act at the beginning of 2021, with half of the payments going to families monthly from July through December and the other half included when families filed their taxes earlier this year. The program expired after one year, but Bennet wants to see it extended permanently because of how much it improved the country’s rate of child poverty.
According to the U.S. Census Bureau, the expanded tax credit cut child poverty nearly in half, with the rate falling from 9.7% in 2020 to a record low of 5.2% last year.
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While a permanent expansion is what Bennet ideally wants, another temporary extension is also a possibility if he can get it through. Throughout these last few weeks of the 117th Congress, Bennet will be negotiating with colleagues on both sides of the aisle to see if he can get support for expanding the tax credit again.
“We should have extended it to begin with, we should never have let it lapse,” Bennet told Newsline in an interview. “It achieved what we said it would achieve, which is, it cut childhood poverty in America almost in half and it reduced hunger by a quarter.”
First enacted in 1997, the federal child tax credit offers filers relief of up to $2,000 per child. The temporary expansion, modeled after legislation introduced by Bennet in 2017, raised the amount of the credit to $3,600 per child and made it fully refundable, allowing the poorest families to receive direct payments even if they did not owe federal income tax.
The expanded version of the tax credit expired after Democratic U.S. Sen. Joe Manchin of West Virginia sided with Republicans in voting against another one-year extension because of how much money it would cost the government and how it benefitted families of higher incomes who don’t necessarily need the credit, CNN reported.
Bennet and a group of fellow Democratic legislators issued a statement in September saying they did not want to end the year extending corporate tax breaks without also expanding the child tax credit. Supporters of the expanded CTC hope to use one such tax break under consideration in the Senate, known as the research and development amortization fix, as leverage to extend the child tax credit again.
“In the end, we’re going to need 60 votes to move a piece of legislation that includes both the child tax credit and things like the research and development tax credit — something I support, but don’t believe we should extend without extending the child tax credit,” Bennet said.
Bennet said he feels good about reaching the 60 votes to pass the extension if it can get in the omnibus bill, one of a few potential vehicles to get the child tax credit through. But a new extension would likely look different from the one that passed with the American Rescue Plan, he said, because of the need to attract bipartisan support.
Because Republicans will be taking over the House of Representatives at the start of 2023, the legislators pushing for the child tax credit expansion believe it’s more likely to get passed before that switch is made.
We should have extended it to begin with, we should never have let it lapse. It achieved what we said it would achieve, which is, it cut childhood poverty in America almost in half.
– Sen. Michael Bennet
Sarah Barnes, director of family economic prosperity initiatives at the nonprofit Colorado Children’s Campaign, said her organization is always thinking about ways to improve families’ economic stability and addressing the challenges they face, and the child tax credit is a tool the campaign has always supported because of the impacts it had on child poverty.
“It’s one of the best tools we have to lift kids out of poverty, so we have been very supportive of it and we’re very supportive of the expanded child tax credit that was in place in 2021,” Barnes said. “It sort of bolsters the evidence base for the impact of direct cash assistance for families with kids, which is something that we know really matters for families with kids, especially when they’re young.”
Barnes said family economic hardship did appear to increase after the 2021 extended child tax credits ended. She cited the Census Bureau’s Household Pulse Survey that found an increased percentage of households with kids struggling to pay for usual expenses after the expansion ended, but noted that this is just one possible indicator of its impacts.
Some of the key benefits that Barnes said came from the expanded tax credit were all families being able to access the credit regardless of income, as well as the predictable monthly payments.
“That just really allowed families to meet their most pressing needs from month to month, and we were able to see that in Colorado the top reported uses of those monthly payments were things like food and rent and utilities and clothing,” Barnes said. “So there’s evidence that this expanded credit and these payments that were coming into families was just allowing them to meet those basic needs. We know the positive impact that has on child well being, on child development, on family economic stability, all of those things.”
When talking to families about the extended child tax credit across Colorado, Bennet said he heard how much stress it relieved for them, helping to pay for anything from rent to childcare. He said the U.S. economy that has worked well for the top 10% of Americans, but not for everyone else — it’s one of the world’s richest countries, but also has one of the highest rates of childhood poverty. The child tax credit, he said, is an opportunity to change that.
“What we learned is we don’t have to accept that tragedy as a permanent feature of our democracy or a permanent feature of our economy,” Bennet said. “It’s within our capacity to do something about it, and we did something about it.
“It did what we said it was going to do, and that’s why it’s all the more tragic that it wasn’t extended before,” he added. “It’s why I hope there’s going to be real energy to try to get it done at the end of the year.”
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