Congress ended the pandemic child tax credit, but states rallied on the idea

Congress ended the pandemic child tax credit but states rallied | ltc-a

For a brief time during the coronavirus pandemic, the federal government gave most parents monthly cash — up to $300 per child — with no job requirements or restrictions on how the money is spent.

The experiment, through an expanded child tax credit, died last year after 12 months, when Republicans and Senator Joe Manchin III, the moderate West Virginia Democrat, refused to renew it.

But a growing number of states are moving forward with their own programs, often with Republican support. Last week, Colorado became the ninth state in two years to provide some form of cash income to its poorest parents. The law, passed with bipartisan support, will be the second most generous in the country, providing earning parents less than $35,000 a year up to $1,200 a year for every child under 6.

Minnesota’s program, which became law last month, is the most generous, guaranteeing families earnings of $35,000 or less with up to $1,750 in cash a year for each child under 17.

« Focusing on child well-being and supporting families has really been a big selling point » from across the aisle, said Halah Ahmad, vice president of the Jain Family Institute, a think tank that advocates for guaranteed income and has partnered with Colorado lawmakers to create the new program.

State tax credits for children are far smaller than federal ones and are unlikely to drastically change any family’s budget. At least initially, most will be paid annually rather than monthly, potentially making them less helpful in day-to-day spending decisions.

However, supporters of the programs say they will set an important precedent and test the theory that the government can expand cash support to families without discouraging parents from working outside the home – a long-standing political and economic concern.

It was in response to this concern that President Bill Clinton reformed federal welfare in 1996 by tying work requirements to cash support for single mothers. But the pandemic, inflation and childcare shortages have prompted some lawmakers to reconsider that model.

In addition to Colorado and Minnesota, New York, California, Maryland, Massachusetts, New Jersey, Vermont and New Mexico have also approved Income Guaranteed Child Tax Credits in the past two years, with cash payments ranging from $25 to $ 1,083 per year per child, depending on family income.

The policies, most popular with Democrats, have won over about a third of Republican state lawmakers, according to an analysis by the Jain Family Institute. This is in stark contrast to Republicans in Congress, who have coalesced around the idea that child tax credits should be linked to job requirements.

State Senator Janice Rich, a Republican from Colorado who represents parts of rural Western Slope, said co-sponsoring the legislation was an easy choice, as it would help families who are struggling with inflation in housing, in childhood and in energy costs.

« I can’t help what the federal government decides, » he said, referring to Republicans in Congress who opposed making the expanded federal tax credit permanent. « It seemed like the right thing for Colorado families to do. »

Ms. Rich noted that other early childhood issues had also been bipartisan winners in the Colorado legislature, such as efforts to increase access to daycare and affordable child care.

However, there is significant debate about expanding child tax credits, for lawmakers on both sides. In Montana this year, a coalition of conservative Democrats and Republicans killed an effort by Governor Greg Gianforte, a Republican, to provide $1,200 a year per child for families earning up to $50,000.

Some lawmakers prefer public money to be spent on established child care programs, while others remain concerned that cash payments will discourage work.

« We don’t want to go back to pre-welfare reform, » said Kevin Corinth, a senior fellow at the American Enterprise Institute, a center-right think tank and former White House economic adviser under President Donald J. Trump.

In Washington, he added, “Republicans seem pretty united in their belief that you shouldn’t get the child tax credit unless you have a certain amount of earnings. The fact that a state like Colorado has Republicans who are buying up child benefits is somewhat surprising.