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Updated Jan 31, 2024, 10:30pm EST
politics

The House passed a Child Tax Credit expansion. It faces a GOP buzzsaw in the Senate.

REUTERS/Leah Millis
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The News

The House passed its $78 billion, bipartisan tax bill with a lopsided 357-to-70 vote on Wednesday, in which the measure attracted slightly more Democratic than Republican support as it overcame opposition from hardline conservatives.

Now comes the hard part: Winning over GOP senators. Republicans in the upper chamber are already expressing deep skepticism toward the legislation, which combines several business deductions with an expansion of the Child Tax Credit that would all sunset at the end of 2025.

Sen. Thom Tillis, R-N.C., said Wednesday that he’s been advising Minority Leader Mitch McConnell and other GOP Senate leaders that it would be “a mistake” to pass the bill. Speaking to Semafor, he argued that Republicans should hold out for a potential Trump presidency to make major tax policy decisions, especially since Congress is preparing to renegotiate much of the IRS code next year ahead of when large swaths of the 2017 Tax Cuts and Jobs Act are set to expire.

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“I think everything should be on the table there, including the future of the child tax credit provisions [that] are being proposed now,” Tillis told Semafor in a separate interview.

Meanwhile, Sen. Chuck Grassley, R-Iowa told Semafor he was concerned that expanding the child credit would aid President Biden’s re-election chances.

“I think passing a tax bill that makes the president look good mailing out checks before the election means he could be reelected and then we won’t extend the 2017 tax cuts,” the former Senate Finance chair said. He added that he believes the bill would give up some of the GOP’s leverage ahead of next year’s big tax fight, but said he’d take a closer look at the bill once it passed the House.

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Though a number of Republicans on and around Capitol Hill have raised concerns that the bill would let Biden send out cash around election time, tax experts have dismissed those fears as essentially a misunderstanding. The GOP-led House Ways and Means panel said in a recent statement that the Biden administration is “explicitly prohibited” from sending “politically-timed refund checks.”

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Know More

Other Republican senators have suggested they want a chance to tweak the legislation before they’d be willing to support it. Sen. John Cornyn, R-Tx, another Senate Finance panel member, said he’s pushing for a mark-up, which would open the bill to amendments and other changes. Sen. Bill Cassidy, R-La., told Semafor that “I’d love a mark-up.”

A spokesperson for McConnell said Sen. Mike Crapo, R-Idaho, the ranking GOP member of the Senate Finance panel, is helming negotiations for Senate Republicans. For his part, Crapo has expressed worries about allowing households to claim a larger child tax credit by using their previous year’s income, a provision that’s meant to help poorer parents whose incomes can fluctuate from year to year. Crapo has argued the measure might disincentivize work, per Politico, echoing the concerns of many other Republicans.

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“Now that the House has passed H.R. 7024, the Senate will go through its own process,” Crapo said in a statement referring to the bill. “I look forward to working with my colleagues to vet the legislation, address concerns, and make the necessary changes to build support.”

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The View From Democrats

Democrats seized on Grassley’s comments in particular Wednesday, arguing that it was the latest example of a Republican lawmaker admitting they would oppose a bill in order to avoid handing Biden a potential political win. Earlier this month, Rep. Troy Nehls, R-Texas said he wouldn’t back a border security deal because “I’m not willing to do too damn much right now to help a Democrat and to help Joe Biden’s approval rating.”

“Republicans want to ‘fix’ the border but don’t want to pass a bill to do so because they want to attack Biden over it. AND now they don’t want to pass a tax cut for families because it’s an election year?” Sen. Tim Kaine, D-Va. posted on X. “This isn’t how we should be governing.”

“Whether it’s taxes, immigration, or gun reform, listen to Republicans when they tell Americans that they don’t care about governing unless there’s political gain attached,” Rep. Seth Moulton, D-Mass. wrote on X.

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Room for Optimism

Some Republicans believe there will be enormous pressure to bear on GOP senators to pass the Wyden-Smith bill. One GOP lobbyist argued there was “predictable posturing from GOP senators trying to make their mark on the bill.”

“All of the outside pressure focused on the House the past few weeks will be redirected to the Senate side,” the lobbyist told Semafor. “Senate Republicans in the minority won’t be the final obstacle to a bill that clears a Republican House with 300+ votes.”

“Senate Republicans will do the right thing, pick up this bill and deliver for the American people,” Ways and Means Chair Jason Smith told Semafor.

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