Politico suggests the Joe Biden administration now accepts that any child tax credit (CTC) expansion must come with a work requirement: “The White House has privately signaled to Democrats that it would support a compromise deal to revive the expanded Child Tax Credit, even if it includes work requirements it once opposed.” But that apparent compromise is far less than meets the eye, as it simply admits that Senator Joe Manchin (D-WV) and Republicans continue to oppose the revival of the 2021 child tax credit expansion that paid full CTC checks to non-working parents for the first time. And the White House’s new position apparently includes lots of DC fine print: “officials hope Democrats can secure broad exemptions to any requirements” as part of legislation that could increase benefit checks for as many as 19 million households.

Beyond serious questions about work and expanded entitlements, there are at least three other good reasons why Republicans should reject a last-minute deal to expand the child tax credit in the lame-duck Congress.

First, it’s not the tax cut proponents claim. A Biden administration spokesperson says the current negotiations involve “tax relief ideas to help families and children,” but the policies have literally nothing to do with cutting taxes. Politico obliquely describes the focus as “expanding the percentage of recipients who qualify for the current $2,000 yearly maximum.” Liberal expert Robert Greenstein, saying the same thing using beltway terminology, recommends that expanded benefits “advance as far as possible toward full refundability.”

What does that mean, exactly? A normal person would assume that making the child tax credit “fully refundable” means increasing the amount of taxes parents paid in that are then refunded to them. But that’s not how DC works. The current child tax credit already refunds up to $2,000 per child in federal income taxes that working parents have paid; making that fully refundable doesn’t offer bigger tax refunds for parents who paid even more in taxes. Instead, it does the exact opposite—increasing the amount “refunded” to parents who paid little or no taxes in the first place.

That reflects how the real goal of this policy is to provide more and bigger government benefit checks, not more tax relief. The fact that the expanded checks would be sent by the IRS doesn’t change that. Indeed, the 2021 temporary CTC expansions liberals want to revive made the IRS into America’s number one welfare-paying agency.

A second reason to oppose a lame duck deal is it’s simply another step towards a universal basic income (UBI)—that is, universal welfare checks—for nearly all parents. Liberals have been perfectly clear their real goal is the permanent revival of the temporary 2021 policy—a large, fully-refundable child tax credit, paid regardless of parental work. But that policy is so expensive supporters proposed just a one-year expansion in 2021 to sidestep the staggering $1.6 trillion cost over 10 years. They continue pursuing that goal, just in incremental steps. Any benefit increase now will simply make completing that task easier down the road. 

A third reason to oppose a lame-duck deal is the mockery it makes of “regular order” in Congress. As the table below displays, changes to the child tax credit have always been made in major tax bills considered under regular order, meaning after congressional hearings and markup sessions in which policies are debated and amended in the open. That is, until now:

Major Changes to the Child Tax Credit

The current lame duck discussions include none of that transparency. In fact, only a handful of members and staff know what proposals are currently being discussed. Yet within a week, a billion-dollar policy package with far-reaching implications could be presented to the House and Senate as part of a massive, take-it-or-leave-it bill that few will have even read.

Why would Republicans, poised to gain leverage in Congress in January, agree to that now? The short answer is they shouldn’t. Instead, they should review and develop better, pro-work policies using regular order—instead of backing a rushed attempt to “salvage,” as Politico aptly says, one of “President Joe Biden’s signature achievements.”

The post Multiple Reasons to Reject a Lame-Duck Child Tax Credit Expansion appeared first on American Enterprise Institute – AEI.