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
{T} he child tax credit (CTC) has been a pillar of conservative, pro-family policy for almost 30 years. In 2017, Senator Mike Lee (R., Utah) and I bucked the Wall Street Journal Republicans focused solely on corporate-tax cuts to double the CTC from $1,000 to $2,000. IRS data confirm our expansion cut taxes for millions of working families. But today, Republicans are poised to undo that good work by agreeing to a bill that would leave nine out of ten CTC-eligible families worse off than they were in 2017 — while simultaneously turning the CTC into a welfare program, just as the Democrats have always wanted it to be.
This hasn’t been the spin in Washington, of course. According to the political establishment and the legacy media, the Tax Relief for American Families and Workers Act (H.R. 7024) is a bipartisan, pro-family bill, and anyone who stands in its way is a penny-pinching contrarian. But while H.R. 7024 isn’t wholly bad, its CTC provisions raise serious concerns and can hardly be described as generous. In fact, they would do almost nothing for the overwhelming majority of Americans.
The reason for this is the inflation that has resulted from President Joe Biden’s reckless policies. The $2,000 CTC I fought for in 2017 has lost 20 percent of its value since then. H.R. 7024 would index the CTC to inflation for a period of two years, but it would also lock in the dramatic erosion that has already occurred. Only a seasoned Washington insider could call this “tax relief” in good faith.
Meanwhile, H.R. 7024 would change the structure of the CTC to reflect Democrats’ left-wing priorities in two very disruptive ways. First, the bill would copy and codify the “look back” option from President Biden’s American Rescue Plan Act, allowing families to qualify for government payments based on their gross income in the previous year’s filings. Second, the bill would phase in the CTC for larger families at rates that far exceed their tax liability.
This may not seem like much of a change, but it would actually be a fundamental departure. For its entire history, the CTC has been connected to some form of tax liability. Before 2017, that was income-tax liability. In 2017, we made the CTC more generous by taking into account employee-employer payroll-tax liability as well. If we cross the red line and sever this connection, as H.R. 7024 would do, the CTC will no longer be a tax credit at all. Instead of allowing working parents to keep more of their hard-earned income, we would be handing out cash.
This plays right into the hands of the Democrats, who seek to reframe any and all pro-family policies as welfare. Democrats have been clear that their ultimate objective is a universal basic income, which would be disastrous for our country. We know this because we have experience with cash handouts that do not require recipients to work. When House Speaker Newt Gingrich and President Bill Clinton created the CTC in the 1990s, it was in the context of a welfare-reform package that eliminated such handouts. This combination cut child poverty by 25 percent.
We must also remember recent history. When the Democrats temporarily turned the CTC into a government child allowance in 2021, the move proved deeply unpopular with the American people and hurt the economy by disincentivizing work. Borrowing elements from that failed proposal would be a mistake, not least because it would weaken Americans’ support for what is today a foundation of working families’ well-being.
We can still make H.R. 7024 a good bill. But to do so, Congress must unite behind genuinely pro-family policies. Should this bill come before the full Senate, I will offer an amendment to strike the “look back” option, strike the per-child phase-in scheme, and — most importantly — expand the value of the CTC to $2,500. This amendment will be consistent with proposals supported by all of my Republican colleagues over the past 30 years. It is also the only way to ensure working families receive meaningful relief in light of President Biden’s inflation — and it’s the best way to ensure the CTC does not turn into a welfare program with Republicans’ blessing.