Top Senate Republicans said they don’t expect any tax provisions to be included in a must-pass spending bill that lawmakers are negotiating, all but dashing Democratic hopes of a child tax credit expansion.
Lawmakers have yet to reach a deal on a yearlong omnibus as the two sides wrangle over domestic spending. Democrats have been pushing to include in the legislation at least a piecemeal expansion of the tax credit that stabilized many families’ finances in 2021 while they still control both chambers, in an attempt to salvage one of President Joe Biden’s legislative achievements.
“There’s a lot of expiring tax policy that needs to be extended, and which enjoys bipartisan support, but as is usually the case, there is a ransom to be paid when it comes to tax policy, and the price may be too high,” said Sen. John Thune (R-SD), the Senate’s No. 2 Republican, speaking to reporters on Tuesday.
Democrats had hoped to use at least a partial expansion of the child tax credit as a bargaining chip in exchange for erasing new rules that will make it difficult for large companies to write off their interest and research expenses.
“I’m going to fight like hell until they turn the lights out for the year to get both,” Senate Finance Chairman Ron Wyden (D-OR) told reporters on Capitol Hill Tuesday, referring to the expansion of the child tax credit and the research deduction.
The tax credit in question was rolled out during Biden’s first months in office, giving $3,600 to parents. However, the benefits ended in December 2021 after Republicans and centrist Democratic Sen. Joe Manchin (D-WV) said they would not support an extension amid fears the policy was fueling inflation. The White House has told Democratic negotiators it would support a compromise deal to revive the tax credit, even if it includes work requirements it once opposed, according to Politico.
Senate Minority Leader Mitch McConnell said the two sides are getting very close to an omnibus agreement that would be “broadly appealing” at a press conference on Tuesday afternoon.
“It would meet the defense number of the NDAA without having to pay a bonus above what President Biden asked for, for domestic priorities of the Democrats,” he said.
Senate Majority Leader Chuck Schumer (D-NY) indicated negotiations are getting closer on an omnibus bill but that there are still some disagreements, including the fate of the child tax credit.
“Well, we’d like to do some tax things, but our caucus feels very strongly that the child tax credit should be there as long as there are some corporate tax breaks, and so far, we don’t have agreement from the Republicans,” Schumer said during his weekly press conference in response to a question if any tax extenders would be added to the omnibus.
Both Manchin (D-WV) and Mitt Romney (R-UT) said they had not been briefed on whether tax extenders would be added to the omnibus when asked by the Washington Examiner on Tuesday afternoon.