Senate to vote on major tax bill to expand Child Tax Credit, business breaks

Washington — The Senate is set to vote Thursday on a major tax package that would bolster the popular Child Tax Credit and cut taxes for businesses, a bill that cleared the House by wide bipartisan margins earlier this year but now faces GOP opposition in the upper chamber heading into November's election.

Known as the Tax Relief for American Families and Workers Act of 2024, the legislation would expand the Child Tax Credit to provide relief to lower-income families. Though it's more modest than a pandemic-era enhancement of the credit, which greatly reduced child poverty and ended in 2021, it could still lift roughly half a million children out of poverty, according to the Center on Budget and Policy Priorities. The bill also includes some revived tax cuts for businesses, like research and development deductions. 

The Senate is scheduled to take a procedural vote on the measure Thursday, which would require 60 votes to move forward. 

The bill would make it easier for more families to qualify for the Child Tax Credit, along with increasing the amount from $1,600 per child to $1,800 in 2023; $1,900 in 2024; and $2,000 in 2025. It would also adjust the limit in future years to account for inflation. 

The credit expansion would cost roughly $33 billion, according to the Congressional Budget Office. It includes various offsets to pay for the tax breaks, and the CBO estimates it would have little impact on the deficit over the next decade.

Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, and House Ways and Means Committee Chairman Jason Smith, a Missouri Republican, unveiled an agreement on the legislation in January, calling it a "common sense, bipartisan, bicameral tax framework."

Then, the House approved the legislation in a 357 to 70 vote later in the month in a rare moment of bipartisanship. Wyden said on Wednesday that the bill was "designed with balance in mind."

"On a normal day you can't get 357 House members to agree to order a piece of apple pie," Wyden said on the Senate floor Wednesday. "But that's the kind of support this tax bill had."

Still, opposition is expected from some Senate Republicans who have expressed concerns about the cost and the possibility of bolstering Democrats' chances in November. While some have advocated for an amendment process, others have voiced support for waiting until after the election, with control of Congress and the White House up for grabs, to address the tax issues.

Sen. John Cornyn, a Texas Republican, said the Senate should leave the issue until next year to come up with a better product. He said on the Senate floor Wednesday that it's a "designed-to-fail vote" and not a serious way to legislate. And he added that although the bill cleared the House, the Senate needs to shape the legislation, saying the upper chamber "is not a rubber stamp." 

Cornyn claimed that Senate Democratic leadership "sat on the bill intentionally for six months and waited until the final hour before a five-week recess to bring it to the floor," suggesting that it's a show vote planned purely for use as a talking point on the campaign trail.

Despite the opposition from Senate Republicans, Democratic leaders are pushing forward with the legislation, aiming to put the GOP on the record with Thursday's vote. 

Senate Majority Leader Chuck said Democrats "are ready to get this package done," adding that "the only ones standing in the way of enacting tax relief right now are Senate Republicans."

Schumer said there's no "great mystery" about why Senate Republicans are expected to oppose the package, arguing that they're looking to the calendar and "have decided they care more about results of the election than in passing a law."

"They hope that if things go their way they can get a more conservative package sometime in the future," Schumer said. "And they're willing to walk away from expanding programs like the Child Tax Credit along the way."

But opposition isn't only expected from Republicans. Among some progressives, who argue that it doesn't go far enough to support low-income Americans, the bill is expected to lose support as well. 

"I'm really frustrated about the tax bill," Sen. Elizabeth Warren, a Massachusetts Democrat, told reporters on Wednesday. "The Republicans have said the terms on which they're willing to hold children is only if every dollar that goes to kids has to be matched by at least $3 for corporations. Those are not our values and those are not the folks who need help."