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The House on Wednesday gave sweeping bipartisan approval to a $78 billion bill that would expand the child tax credit and restore a set of corporate tax breaks, a rare feat in an election year by Congress, which worked hard to enact the legislation. Is.
The bill passed 357 to 70, with mainstream lawmakers from both parties passing the House’s first major bipartisan bill of the year. Forty-seven Republicans and 23 Democrats voted against the bill.
But despite the lopsided show of support, the measure faces a difficult path to enactment amid political divisions over who should benefit most. The effort, which faces resistance from Senate Republicans, is a test of whether a narrowly divided Congress can overcome the dysfunction of the Republican-led House, put aside electoral politics and deliver such legislation. Can bring in which both the parties will win.
Representative Jason Smith, Republican of Missouri and chairman of the House Ways and Means Committee, described the legislation as “pro-growth, pro-jobs and pro-America.”
“This is a strong, common-sense, bipartisan step toward providing immediate tax relief for working families and small businesses,” Mr. Smith said.
The package would expand the child tax credit — albeit a version substantially reduced from its pandemic-era level — and restore a set of business tax exemptions related to research and development and capital spending. Both will remain till 2025. It will also boost low-income housing tax credits and provide tax benefits to disaster victims and Taiwanese companies and individuals.
The plan would be financed by curbing the employee retention tax credit, a pandemic-era measure aimed at encouraging employers to keep workers on the payroll that has become a magnet for fraud.
Lawmakers in both parties consider it a policy victory and a way to show voters that they can actually get something done despite the chaos and turmoil that has defined the Republican-led House.
“The majority of the country really wants us to do things in a bipartisan manner,” Republican Representative Greg Murphy of North Carolina said in an interview. “We’ve seen a lot of standoffs because some people really, basically, want to say no to everything. And I think we need to move forward and really show people that we can govern.”
In a sign of the political hurdles complicating the bill’s path, Mr Johnson introduced it to the House on Wednesday under special expedited procedures, requiring a two-thirds majority for passage. This maneuver allowed him to bypass Republicans who might otherwise block the bill because of their policy and political objections.
Senate Republicans have also sought to put the brakes on, another sign of the political challenges the package still faces. The bill would be a victory for President Biden and Democrats, who have made expanding the child tax credit a signature issue, including Senator Sherrod Brown of Ohio, who is up for re-election this year and Republicans in November. is a major goal.
The top Republican on the Finance Committee, Senator Michael D. Crapo of Idaho, said on Wednesday he still had concerns about the bill – which includes a provision that would allow parents to claim the larger credit without having to rely on their previous year’s earnings. would allow the use of ., which he argued would discourage work—and wanted to see it amended in the Senate. Mr. Crapo and several other Senate Republicans had previously voted in favor of the same provision in previous bills.
“I’m sure there will be many issues, like those raised in the House yesterday, that have not been addressed,” Mr. Crapo said. “I’m guessing a lot of issues like this will come up and we’ll have to work on them.”
A group of lawmakers from New York and other blue states with high tax rates were upset that the measure sought to raise the limits on the state and local tax deduction, known as SALT, that could hurt high-income earners. Those who do will benefit. New York Republicans signaled their anger Tuesday by briefly blocking a procedural measure in protest.
“As has been said many times in this Congress, clearly there is strength in numbers,” said Rep. Mike Lawler, who joined Reps. Anthony D’Esposito, Nick LaLotta in defecting on the unrelated measure Tuesday. and was joined by Andrew Garbarino. , only to change his vote after getting his point across. “But for us who gave the majority, this is the issue that matters.”
Athena Lawson, a spokeswoman for the speaker’s office, said Mr. Johnson addressed their concerns after long-night meetings on Tuesday by committing to work with them to find a way to address SALT separately.
The package that the House passed on Wednesday was brokered by Congress’s top two tax writers: Mr. Smith, and Senator Ron Wyden, Democrat of Oregon and chairman of the Finance Committee. It has the support of prominent leaders of both parties and various rank-and-file members at the White House, Capitol Hill. It gained momentum after it was approved by the Ways and Means Committee on an overwhelmingly bipartisan basis in January.
Supporters point to that vote, and how unlikely a tax deal seemed to come together, as a good sign for its prospects.
“Most prognosticators would have told you as recently as a month ago that this bill was destined to die in negotiations or, if introduced, gather dust on the shelf,” Mr. Wyden said in a statement Wednesday. Is.” “Given the poor state of our political climate, having such strong momentum behind this bill is a real victory that will help 16 million American children from low-income families get ahead.”
Republican supporters have argued that the business tax breaks are worth embracing, and they have also seen the child tax credit as a conservative win.
“The child tax credit reforms in this bill contain pro-family policies that maintain the child tax credit structure of the Trump-era GOP tax reform,” Mr. Smith said in a statement. “The child tax credit provisions in this bill help families hit hard by inflation, remove the penalty for families with multiple children, and maintain work requirements.”
The legislation would make the $2,000 per child credit more accessible to families with multiple children and gradually raise the limit on how much low-income families can claim to higher-income families. This will automatically adjust the credit for inflation and allow parents to use their previous year’s earnings if it means they can receive a larger credit.
Right-wing Republicans condemned the expansion, arguing that it would discourage work. He also objected to allowing undocumented immigrants with US-born children to receive the credit for which they are eligible under current law.
“I’m not going to support anything that expands the child tax credit, which is massively expanding the welfare state,” said Representative Bob Good of Virginia, Republican and chairman of the House Freedom Caucus. “And I’m not going to support the child tax credit going out illegally. I think it is encouraging this illegal invasion, and we must unite against it as the Republican Party.
Progressive Democrats, on the other hand, argued that the bill did not expand the tax credit enough and disproportionately benefited corporations. That’s far less than the pandemic-era version of the child tax credit, which deposited up to $3,600 per child into families’ bank accounts and helped lift millions of children out of poverty.
The Appropriations Committee’s top Democrat, Representative Rosa DeLauro of Connecticut, said before the vote, “I cannot vote for a deal that unilaterally benefits big corporations, while ensuring substantial tax cuts for middle- and working-class families.” fails.” , “This bill provides billions of dollars in tax relief for the rich and money for the poor.”