CHN: Senate Fails to Move Tax Legislation
Action to improve the Child Tax Credit stalled in the Senate last week. With votes following party lines 53-43 and 51-43, two motions to move a broader tax cut bill including the Child Tax Credit closer to a final vote failed to garner the necessary 60 votes. Democrats supported the motions, while most Republicans opposed them because costs would be offset by raising revenues.
The first vote would have brought to the floor the House-passed Renewable Energy and Job Creation Act (H.R. 6049) which extends dozens of temporary tax cuts and makes important changes to the Child Tax Credit. By expanding eligibility for the Credit to families with earnings of $8,500 or more, the bill would make an additional three million working poor families eligible for a refundable Child Tax Credit and result in larger credits for another ten million low-income families. See details in the Human Needs Report for July 1.
The second vote would have opened debate on the Jobs, Energy, Families, and Disaster Relief Act of 2008 (S. 3335) sponsored by Senate Finance Committee Chairman Max Baucus (D-MT). This bill requires minimum earnings of $8,500, consistent with H.R. 6049, and many extensions of temporary tax cuts; and, like the House bill, pays for them with offsetting revenue raisers. (An earlier version of the bill contained a less generous change to the Child Tax Credit, setting the minimum earnings threshold at $10,000. The current Child Tax Credit requires minimum earnings of $12,050.) S. 3335 also includes an Alternative Minimum Tax (AMT) ‘patch’ to prevent the AMT’s higher tax rate from affecting upper-middle-class taxpayers. The Senate version is not paid for; the House has passed a separate bill (H.R. 6275) to stop the spread of the AMT, and pays for it with other revenues. (See Human Needs Report referenced above.) While the final tax legislation may not include all the elements of the above bills, observers still believe it is unlikely Congress will adjourn without enacting any tax bill at all.
When Congress returns from its August recess on September 8, it will have three weeks to reach agreement before the scheduled September 26 adjournment. Advocates of the Child Tax Credit are pressing Congress to include positive changes now supported both in the House and Senate in whatever tax legislation moves forward.