WASHINGTON — Congressional leaders are nearing a $70 billion bipartisan, bicameral deal that would expand the child tax credit and provide tax breaks for businesses through 2025, three people familiar with the discussions told NBC News. Told.
The policy is being negotiated by members of the Democratic-led Senate Finance Committee and the Republican-led House Ways and Means Committee, with Democrats’ main demand being a strengthened child tax credit that would significantly reduce child poverty, and Republicans’ In return, it wants to provide new tax breaks to businesses.
Ways and Means Committee Chairman Jason Smith (R-Missouri) said the possibility of a deal “looks like it could work.”
Senate Finance Chairman Ron Wyden (D-Ore.) said he has been pursuing the tax deal for 18 months and aims to complete it by Jan. 29.
“We’re focused on a very specific goal: getting this done in time for filing season,” he said. “And I’m going to continue to do that every day by any means necessary.”
The new agreement, which remains in flux, aims to provide targeted relief to poor households and households with multiple children. This expands the refundable child tax credit and gradually increases the $1,600 limit on the refundable credit. Taxpayers also have the option of using previous year’s income if a larger benefit is available. However, monthly cash payments to children sent to families for six months in 2021 are not part of the negotiations.
The business interruption will result in the reinstatement of some policies that expired under the 2017 Trump tax cuts. Sources said the plan would allow full spending on domestic research and development, reinstate interest deductions from before 2017, extend bonus depreciation, and expand small and medium-sized business expenses.
The new agreement represents a rare attempt at major bipartisan legislation in a divided Congress that has struggled to carry out the basics of governance. It comes from aligning incentives. Democrats are keen to reinstate the child tax credit expansion after enacting a one-year huge benefit that significantly reduced child poverty before the credit expires and is raised again in 2022. And Republicans, who unanimously rejected previous child cash payments, have struggled to pass new legislation since taking over the House, but are hoping to benefit traditional business allies in an election year. ing.
“I’m working very hard to get a resolution on tax policy,” said Sen. Mike Crapo (R-Idaho), ranking member of the Finance Committee. “It’s very important.”
Crapo acknowledged that negotiations include changes to the business tax credit and child tax credit, but did not elaborate.
“Negotiations are ongoing. They were. And we hope to reach a resolution,” he said. “But there are many problems. There are many points of view.”
The child tax provisions are intended to address the fact that refundable credits to low-income households have less value than refundable credits to middle- and high-income households. The priority for Democrats is to reduce child poverty as much as possible by expanding the child tax credit, one of the people said.
Lawmakers are on track to reach the 90% goal, the person said, but some of the key challenges are Democrats pushing for more housing and Republicans pushing tax issues to deal with natural disasters. The focus is on what you are doing.
Some prominent liberals lamented that the new deal would give corporations too many tax breaks.
“My big concern is that the tax cuts will tilt toward big business,” said Rep. Rosa DeLauro (D-Conn.), an active supporter of the child tax credit. “It puts working families, vulnerable families and middle class families at risk.”
Sen. Maggie Hassan (D.N.H.), a member of the Finance Committee, defended the business provisions, reflecting bipartisan support for various items in the agreement.
“Reaching a strong bipartisan agreement to restore the research and development credit and expand the bipartisan child tax credit is an important step forward,” Hassan said in a statement to NBC News. He added: “I will continue to work with my colleagues on both sides of the aisle in the Senate and House, as well as the business community, to get this deal done.”
“I hope Speaker Johnson and others in Republican leadership will heed the calls from both sides of the aisle and address this issue,” she said.
Rep. Katie Porter (D-Calif.), a rare single mother in Congress, said she supports tax policies that make it easier to raise children, but wants to avoid “sweet deals” for corporations.
“I’m a strong supporter of the child tax credit, of course, if it works. And what this place needs to do is invest in policies that work and stop funneling tax dollars to policies that don’t work.” That’s why I’m so happy to hear that,” she said. “I don’t think we need to cut ties with our business sweethearts to make it easier for Americans to raise families.”
Sen. Sherrod Brown (D-Ohio), who is weighing in on the debate, said the priority is to help families raising children.
“We’re helping push the child tax credit forward,” he said. “So it’s a huge win for middle-class Americans.”
