WASHINGTON (AP) — A bill to expand the child tax credit and restore some tax breaks for businesses failed in the Senate on Thursday as Republicans overwhelmingly opposed the measure, arguing they could get a better outcome next year.
Majority Leader Chuck Schumer, D-N.Y., urged Republicans to vote against the tax cut package before lawmakers finished their work for the month, saying they would vote against tax cuts for many low-income families and local businesses.
The 60-vote majority needed to pass the bill was far from achieved, with 48 votes in favor and 44 against. Three Republicans – Senators Josh Hawley of Missouri, Markwayne Mullin of Oklahoma and Rick Scott of Florida – supported the Democrats’ proposal. Senators Joe Manchin of West Virginia and Bernie Sanders of Vermont, both independents and Democrats, opposed it.
Both parties are trying to push issues they believe will resonate with voters in November. Schumer put Republicans on the hook for blocking tax cuts demanded by business that, if fully implemented, would provide financial relief to an estimated 16 million families. He also sought to counter claims by Republican presidential candidate Donald Trump’s vice presidential nominee, Senator JD Vance of Ohio, that Democrats are “anti-family.”
“The question is, will Republicans in the Senate join us in giving Americans tax relief, or will they stand in the way?” Schumer said before the vote.
The roughly $79 billion package passed the House in January by a vote of 357-70, but stalled in the Senate. Republicans demanded that the bill pass the Senate Finance Committee so lawmakers could propose changes to address their concerns, but that did not happen.
Although there were negotiations behind the scenes, senators from both parties accused the other party of not being stern.
The child tax credit is $2,000 per qualifying child. The goal of the law is to make the tax credit more widely available to low-income families by gradually refunding a larger portion of the tax credit. Republican Senate leader Mitch McConnell of Kentucky said the changes amounted to “cash compensation rather than relief for working taxpayers.”
“I’m not so sure Americans are impressed with message votes,” McConnell said. “And I don’t think they award points for incomplete work.”
The bill was crafted through negotiations between Republican Rep. Jason Smith (Moscow), chairman of the House Budget Committee, and Democratic Sen. Ron Wyden (Oregon), chairman of the Senate Finance Committee. It would restore full, immediate deductions that companies can claim for purchases of modern equipment and machinery and for domestic research and development costs. The tax breaks had expired as a cost-containment measure under provisions of the 2017 tax law that Republicans passed under the Trump administration.
According to the Center on Budget and Policy Priorities, a liberal think tank, the changes to the child tax credit could lift up to 500,000 people out of poverty if the proposal is fully implemented.
The bill would be funded by accelerating the deadline by which businesses can file retroactive claims for employees they kept on payroll during the COVID-19 pandemic. The IRS has said a immense majority of retroactive claims pose a high risk of fraud.
Because the bill apparently lacked the support needed to overcome procedural hurdles, Schumer had refrained from putting it to a vote for months. But the election season provided Democrats with an opportunity to put the issue – and Vance – in the spotlight. Schumer even mentioned “the junior senator from Ohio” in his speech on the Senate floor, leaving no doubt that Vance was part of their considerations in holding the vote.
Vance claimed in an interview with Fox News that Vice President Kamala Harris, currently the Democratic frontrunner for the White House, has called for an end to the child tax credit. But the Biden administration led efforts to enhance the child tax credit during the pandemic and unsuccessfully tried to continue the expansion, which temporarily increased the tax credit to $3,000 a year, included 17-year-olds, and raised the amount to $3,600 for children under 6.
Schumer called Vance’s claim “plain nonsense” and said the 2021 expansion was one of the Democrats’ most significant achievements under the Biden-Harris administration.
Vance also said in 2021 that political leaders who do not have biological children have “no direct stake” in the country. He reiterated those remarks after clips of them resurfaced, saying this week on SiriusXM radio’s “The Megyn Kelly Show” that the Democratic Party has become “anti-family and anti-children.”
Vance was in Arizona on Thursday, visiting the US-Mexico border. He did not vote. When asked how he would have voted, his office did not respond.
Wyden, meanwhile, said: “There’s always a lot of talk among Republicans about helping families, competing with China and fighting fraud in government programs, but they just voted down a bill that would do all of that in one package.”
Democratic Senators Sherrod Brown of Ohio and Bob Casey of Pennsylvania, both of whom are running in contested elections this fall, spoke in favor of the bill on the Senate floor, but Senator John Cornyn (R-Texas) called Thursday’s decision the latest in a series of “show votes” that are doomed to fail but would give Democrats “one or two talking points on the campaign trail.”
John Thune, a South Dakota senator and the second-highest Republican senator, said the bill has good aspects, but “if we can do it next year, it will be a much more compelling bill.”
Thune said it would not be challenging for Republicans to reject criticism that they do not sufficiently support tax relief for businesses and families.
“On certain issues, voters instinctively know that Republicans are better off,” Thune said. “They’ll try to make that argument in a political ad, but I think it’s going to be hard to pull it off when most voters know that it was Republicans who cut taxes in 2017, and next year it’s going to be Republicans who extend those tax cuts if we have the majority.”
