NEW YORK - The $1.9 trillion American Rescue Plan will provide billions for vaccines, stimulus checks, unemployment insurance, state and local governments, and school reopenings, but there's another provision flying under the radar: a major expansion of the child tax credit.
The bill's proponents say the provision could help cut child poverty in America by as much as 50%.
"This has the potential to contribute to child poverty reduction in ways we haven't seen in not just recent years in the United States, but in decades," said Megan Curran, a postdoctoral research scientist at Columbia University's Center on Poverty and Social Policy.
Starting in July, families earning up to $150,000 per year would receive $300 per month for every child under 6, and $250 per month for every child between 6 and 17, while more low-income families than ever before would be eligible for the credit, which has so far come as an annual tax reduction.
"The child tax credit was reaching many families beforehand but once a year at tax time, so families couldn't count on it as a regular part of their household budget," Curran said. "But it was also leaving out one-third of all kids because their parents didn't earn enough to receive the full credit."
Yet while the American Rescue Plan has received zero Republican votes in Congress, the idea of an expanded child tax credit is hardly a liberal proposal.
"The child tax credit originated with Newt Gingrich's Contract with America, so it's a credit that was pioneered by Republicans but has been expanded by both sides of the aisle," said Samuel Hammond, the director of poverty and welfare policy at the Niskanen Center, a center-right think tank in Washington, D.C.
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In February, Sen. Mitt Romney, R-Utah, proposed a more generous tax credit than Democrats are poised to pass and President Joe Biden is expected to sign. Sen. Marco Rubio, R-Florida, and Sen. Mike Lee, R-Utah, supported higher sums but objected to the money coming in monthly cash payments as proposed by Romney and the Democrats.
Democrats see Republican support for expanded child tax credits, regardless of the form they take, as an opening to extending the help past the pandemic relief provision's expiration next year.
"I expect there's some common ground that we'll be able to find with them and others as we pursue making this important step forward permanent," Rep, Hakeem Jeffries, D-New York, said.