Stimulus Update: Americans Will Lose More Than Monthly Child Tax Credit Payments if Build Back Better Doesn't Pass
The consequences of not passing President Biden's spending bill are far-reaching.
- President Biden's Build Back Better plan calls for an extension of the boosted Child Tax Credit to 2022.
- If that bill doesn't pass, Americans will lose out on those monthly installment payments -- and so much more.
Since July, eligible American families with kids have been benefiting from monthly installment payments under the boosted Child Tax Credit. Those monthly payments have not only helped pull millions of children out of poverty, but they've also helped many families attain more financial security.
The most recent boosted Child Tax Credit payment to hit bank accounts went out in mid-December. And President Biden was hoping to continue those payments into January.
In fact, the president's sweeping Build Back Better plan includes a provision that would extend the boosted Child Tax Credit for the 2022 tax year. Not only would that translate into eligible recipients getting more money from the credit, but it would also mean allowing them to receive that money in the form of monthly installments. (Prior to 2021, the Child Tax Credit was only paid as a single lump sum in the form of a tax refund.)
House Democrats passed the Build Back Better plan weeks ago, and now, it needs Senate approval to move forward. But unfortunately, West Virginia Democratic Senator Joe Manchin has made it clear that he won't support the president's spending package. And without his vote in favor of the bill, it may not move forward in a divided Senate.
If that bill isn't approved, it could spell trouble for the many households that have become reliant on those monthly Child Tax Credit payments. But that's not the only thing families will lose out on if the bill doesn't move forward.
Paid family leave could go away, too
The Build Back Better package includes a provision that would give workers four weeks of paid leave upon the birth of a child. That leave would also kick in for anyone needing to care for a loved one or tend to a medical issue of their own.
Right now, the Family and Medical Leave Act (FMLA) provides certain employees with up to 12 weeks of unpaid leave per year. But while that offers workers protection against job loss, it doesn't provide compensation. Many workers can't afford to take time off without pay, which is why critics of FMLA say it falls short.
The Build Back Better plan was aiming to take the concept of adequate leave to a higher level. But if the bill doesn't go through, Americans can kiss that paid leave goodbye.
Concerns over cost
Senator Manchin's opposition to the Build Back Better plan stems from concerns about the costs a paid leave program would entail. The four-week paid leave proposal has an estimated price tag of $205 billion over 10 years, as per the Congressional Budget Office.
Of course, losing out on paid leave would no doubt be a blow to many Americans. But losing out on monthly Child Tax Credit payments may, in the near term, hurt families even more. This especially holds true in light of recent inflation figures.
In November, the cost of consumer goods rose 6.8% from the previous year. And if the omicron variant impacts additional supply chains, consumer prices could climb even more. As such, it's a really bad time to pull a vital income stream from the families that have been counting on it. But as of now, it looks like that may become our very unfortunate reality.
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