Stimulus Update: Congressman Throws a Year-End Hail Mary

Millions of American children fell back into poverty when monthly Child Tax Credit payments were discontinued.

In 19 days, the new 118th Congress will be sworn into office. While Democrats will maintain a majority in the Senate, control of the House of Representatives will be in the hands of Republicans. This shift in voting power may help explain why, last week, Democratic Congressman Adam Schiff sent an urgent request to Speaker Nancy Pelosi and current House Majority leader Steny Hoyer.

The request

The congressman got right to the point, writing, "We have an opportunity to make generational progress for our nation's working families and children across the country in the next four weeks. And we must take it by extending the expanded Child Tax Credit."

Expanded Child Tax Credit

As a reminder, thanks to the American Rescue Plan of 2021, the Child Tax Credit was temporarily expanded from $2,000 to $3,600 per eligible child up to the age of 6. For children ages 6 to 17, the Child Tax Credit was boosted from $2,000 to $3,000.

Between July and December 2021, parents or guardians had the option of receiving a portion of the total credit mailed via check or deposited directly into their bank accounts. By the end of December, families had collected one-half of the credit. The other half was refunded­­­­­­­­­­ when 2021 taxes were filed last spring.

An abrupt ending

When the Biden administration initially pushed for expanded Child Tax Credit payments, the goal was that the program would extend into at least 2025. However, partisan fighting in Congress nixed that hope, and the program ended in December 2021.

Schiff's request

In what may be a Hail Mary move, Schiff's hope is that the current Democratic majority can manage to pass an improved expanded Child Tax Credit. Here's a sample of critical points highlighted in Schiff's letter to congressional leaders:

• Expanding the Child Tax Credit pulled millions of children out of poverty and slashed childhood poverty by nearly 40%.
• Just one month after the Child Tax Credit expired, nearly 4 million children fell back into poverty.
• At a time when millions of Americans are struggling to make ends meet, it is the responsibility of members of Congress to pass bold legislation and codify policies that will reduce poverty, homelessness, and food insecurity for American children and workers.

Bad news and good news

If you're hoping that regular expanded Child Tax Credit payments will be reintroduced, the bad news is this: Republicans -- none of whom voted in favor of the American Rescue Plan or expanded Child Tax Credit payments -- know that they will hold the House majority soon. They have very little reason to be agreeable to a program endorsed by the Biden administration.

The good news is that old-fashioned bipartisan negotiations are underway. A growing number of Republicans have joined Democrats in support of some version of an expanded Child Tax Credit. While there remains a gulf between what Democrats and Republicans hope to see in an updated program, the fact that talks remain alive is a hopeful sign of things to come.

It remains to be seen if the two parties will manage to come up with a compromise. And if they can, it's impossible to know what will be included and what will be cut. Still, open talks are never a bad thing.

Two things are undeniable: Raising a child is expensive and millions of Americans benefited from the financial stimulus provided by the expanded Child Tax Credit. The next few months will reveal whether a last-ditch effort like Congressman Schiff's can provide the motivation needed to update and renew the program.