Community Take: Members of “The Squad” Got it Wrong on the Child Tax Credit
By Mikayla Ferg and Jeremy Rosen
Mikayla Ferg and Jeremy Rosen are Heller community contributors. Do you have thoughts about OAJ's Hot Takes or other pieces published in the Open-Air Journal? We encourage all Heller students, alumni, staff, and faculty to write to us at openair@brandeis.edu. We are committed to publishing letters that contribute to constructive dialogue among the Heller community.
These articles are solely a reflection of the contributor and are not endorsed by the Open-Air Journal or the Heller School.
The recent House vote on the new proposal to expand the Child Tax Credit (CTC) raised an age-old question of social-political change – when faced with the opportunity for incremental, bipartisan change, do you settle or refuse to give in for hopes of radical change down the line? While some progressive members of the House opted for the latter, their decision may have inadvertently conveyed a message that undermines the significance of compromise and hindered Democratic unity, especially in an election year.
The bill, H.R. 7024 the Tax Relief for American Families and Workers Act of 2024, would implement several expansions to the current version of the CTC.
Expanding the CTC has been a recurring political fight since the COVID-era expansion expired in 2021. This expansion did several key things to provide much-needed support to children and their families. First, the expansion eliminated the minimum earnings threshold needed to be eligible to receive the benefit. Next, it increased the benefit level and age limit from $2,000 to $3,600 for children under six, and $3,000 for children aged six to 17. The expansion also made the credit fully refundable and authorized the Treasury Department to issue monthly payments rather than a lump sum payment during tax season.
It’s no surprise that the expansion was so popular. Benefits reached 36 million families and 61 million children and had an immediate impact on economic well-being. In 2021 alone, 2.1 million children were lifted out of poverty with overall poverty reduction for children ranging from 30 percent to 50 percent. Research also shows that the program had positive impacts on parents’ and caregivers’ mental health. It worked, which is why supporters rightly looked on in disbelief (or unsurprised cynicism) as federal lawmakers failed to authorize the expansion leading to the largest increase in poverty for children and the general population in the last 50 years. It became abundantly clear that Republicans and select Democrats had no interest in reauthorizing one of the most successful anti-poverty bills in recent memory, at least not in its current form.
Recently, however, it seemed as if compromise and negotiation may have found their place back in the halls of Congress as the House was able to pass a less generous, but still impactful, version of the expansion.
The bill passed the House with widespread bipartisan support with 357 voting for and 70 voting against. Notably, several of the most progressive members of the House voted against the bill including Congresswomen Alexandria Ocasio-Cortez, Rashida Tlaib, Cori Bush, Rosa DeLauro, and Congressman Jamal Bowman. Of the informal “Squad” caucus Congresswomen Ilhan Omar and Ayanna Pressley were the lone “Yea” votes.
So why did they oppose the bill? Some progressive Democrats voted against the CTC expansion because it did not go far enough. And they are right. The proposed expansion would phase in for families earning at least $2,500, meaning that the very poorest families are not eligible for any benefits. Though this proposal increases the phase-in rate, families earning between $2,500 and $14,000 would not receive the full benefit amount, either. Though the current proposal is estimated to lift 400,000 children out of poverty in its first year, the 2021 expansion would have kept three million children out of poverty had it not lapsed.
Other progressives opposed the CTC expansion because the bill included business tax breaks that would disproportionately benefit very high-earning individuals. While these breaks cut against a progressive agenda, this compromise was key to most Republicans signing on to the bill. And while it is true that the top 1% of income earners will benefit from this bill, their proportional gains are similar to those of low-income families.
The “nay” votes seem to lean more toward political stunt than effective opposition. It is hard to imagine progressive House members voting against the bill if its tragic fate were not so predictable - cruise through the House and die in the Senate. House members are sending a clear message that slow incremental change is not enough. We must act boldly now, or not act at all. Ideologically, they may be right. In practice, it’s not so simple.
Striving for the platonic ideal of a CTC should not prevent lawmakers from taking action now. Is the possibility that the next Congress might pass an even bigger, bolder bill worth the opportunity cost of keeping nearly half a million children and their families in poverty today? Is it worth betting on considering the tough Senate map for Democrats and a coin flip on which party controls the House in 2025? While the Squad wants to hold out for a more transformative bill, an incremental approach could help achieve progressive wins in this case. The CTC could mirror the path of the Earned Income Tax Credit (EITC) in becoming a mainstay in U.S. antipoverty and cash assistance, which currently keeps over 5 million Americans above the poverty line each year. Like the CTC, the EITC started as a temporary policy that was expanded several times before the Revenue Act of 1978 made it permanent. Since then, Congress voted to expand the EITC even more, tying maximum benefit amounts to inflation in 1987 and increasing benefits for families with more than one child in 1990 and 1993. By voting to expand the CTC, even modestly, Congress is setting a progressively higher status quo from which to begin the next round of negotiations.
There is also the issue of Democratic unity. 2024 is an election year, and Democrats have a reasonable shot at regaining control of the House. They may even win the White House and preserve some semblance of democracy. Democrats support anti-poverty programs and relief for working families. However, “Nay” votes on the CTC expansion from the left flank of the party, regardless of reasoning, do not show a united front on reducing poverty. With a razor-slim majority in the Senate and another slim House win within reach in 2024, splits within the party could jam a stick through the bike wheel of their agenda.
There may also be value in bipartisanship that results in something other than military funding, like material improvements in well-being for Americans. It seems harder and harder to come across bipartisan support for social programs these days, and Americans are increasingly losing trust in government institutions. History shows that this can lead to Americans being less interested in the government stepping in to solve social problems and less trust in other institutions like elections. Despite this bleak outlook, most Americans think that trust in government can improve. A bipartisan antipoverty bill could do the trick.