Marco Rubio and Ivanka Trump score a partial victory on the child tax credit
J. Scott Applewhite/AP
- GOP Sens. Marco Rubio and Mike Lee and White House advisor Ivanka Trump scored a partial victory in the form of an expanded child tax credit in the Senate tax bill.
- But an amendment sponsored by the senators to enlarge the credit for millions of poor families was voted down, despite receiving bipartisan support.
GOP Sens. Marco Rubio and Mike Lee and White House advisor Ivanka Trump scored a partial victory in the form of an expanded child tax credit in the newly passed Senate Republican tax bill, which cleared the chamber on Saturday.
But an amendment sponsored by the senators to enlarge the credit for millions of poor families was voted down, despite earning bipartisan support.
The tax bill, which cleared the Senate with 51 Republican votes early Saturday morning, doubles the current non-refundable tax credit from $1,000 annually per child to $2,000, which is more generous than the $1,600 credit passed by the House last month.
The Rubio-Lee amendment would have raised the corporate tax rate from 20% to almost 21% to pay for an $87 billion expansion of the credit over 10 years to millions of low-income Americans, many of whom don't pay federal income taxes and thus don't benefit from the non-refundable credit.
While the failed amendment is a blow to the two GOP lawmakers, the $2,000 credit is a win for them and for Ivanka Trump, who has spent several months lobbying Republicans, business groups, and advocacy organizations to support the proposal.
Experts say the child tax credit is a crucial measure to offset the tax plan's elimination of personal exemptions, which currently provide significant relief for middle-income families, as well as measures that will raise taxes on millions of middle-class Americans.
"At the same time as they have these massive tax cuts for the richest people in the country they actually increase taxes for a lot of working and middle class people, and so I think they see the child tax credit as a way to try to address that," Chuck Marr, director of Federal Tax Policy for the left-leaning Center on Budget and Policy Priorities, told Business Insider last month.
But Marr and other experts argue the expanded credit is regressive because it will stay capped at $2,000, rather than being adjusted for inflation. High-income families will ultimately benefit the most from the expanded credit because they'll be able to cash in on the full amount.
Alex Wong/Getty Images
'A puny band-aid approach'
Despite convincing nine Democrats and 20 Republicans to vote for the Rubio-Lee amendment, it failed, with 29 voting in favor and 71 against. While Republicans refused to raise the corporate tax rate above their goal of 20%, Democrats rejected the amendment as being insufficient for poorer families. They also feared that voting for it would lend support to a larger plan they reject.
"With this amendment, Senators Rubio and Lee fall short of meaningful relief for millions of vulnerable American families," Sen. Ron Wyden, an Oregon Democrat, said during a speech on the Senate floor. "Democrats want to provide strong, permanent protection for all working families rather than temporary protection for some ... the best way to protect these families is not through a puny band-aid approach."
Wyden's spokesperson argued that Senate Majority Leader Mitch McConnell would have removed the amendment from a final bill even if it had received sufficient bipartisan support.
"No amendment can fix this bill and we have no intention of giving Rubio an artificial win ... on an inherently partisan bill that will ultimately raise taxes on 87 million middle class Americans," Wyden's spokesperson, Rachel McCleery, told the Washington Post.
Rubio said during a floor speech on Friday that he also wanted the amendment to go further than it did but implored Democrats to agree to the compromise measure. He also criticized Republicans' refusal to budge on the corporate tax rate.
"Twenty percent is the most phenomenal thing we've ever done for growth, but if you add .94 percent to that, it's a catastrophe?" he asked his colleagues. "If we're not willing to do something as small as this, we're not willing to do anything for working people in this country. And that's an enormous problem."
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