A proposal aimed at expanding the child tax credit and reinstating certain tax incentives for businesses did not progress in the Senate on Thursday, primarily due to Republican opposition. They contended that they would be better positioned to negotiate a more favorable agreement in the following year. Majority Leader Chuck Schumer, representing New York, challenged Republicans to oppose the tax reduction package before the lawmakers adjourned for the month.
He emphasized that their votes would effectively be against tax relief for numerous low-income families and local enterprises. The legislation was significantly short of the 60 votes required for advancement, receiving 48 votes in favor and 44 against. Three Republican senators—Josh Hawley from Missouri, Markwayne Mullin from Oklahoma, and Rick Scott from Florida—aligned with Democrats in support of the measure. Conversely, Senators Joe Manchin of West Virginia and Bernie Sanders of Vermont, who are independents but caucus with the Democrats, voted against it.
Both sides are endeavoring to highlight concerns they believe will resonate positively with voters in the upcoming November elections. Schumer has placed the responsibility on Republicans to oppose tax reductions that the business sector has advocated, which would provide financial assistance to approximately 16 million families once fully implemented.
Additionally, he aimed to refute claims made by Republican presidential candidate Donald Trump’s running mate, Senator JD Vance of Ohio, suggesting that Democrats are “anti-family.”
Schumer posed the question, “Will Senate Republicans collaborate with us to provide a tax relief for Americans, or will they obstruct this effort?” prior to the vote. The approximately $79 billion package received strong support in the House in January, passing with a vote of 357-70, yet it has encountered delays in the Senate. Republicans have advocated for the bill to be reviewed by the Senate Finance Committee, a procedure that would permit lawmakers to propose amendments to address their concerns; however, this did not occur. Despite some negotiations taking place behind closed doors, senators from both parties have accused one another of lacking genuine commitment.
The child tax credit is set at $2,000 for each qualifying child. The proposed legislation seeks to enhance accessibility to this credit for low-income families by progressively increasing the refundable portion of the credit. Senate Republican leader Mitch McConnell from Kentucky criticized these modifications, asserting that they represent “cash welfare instead of relief for working taxpayers.” “I am not convinced that the American public is swayed by symbolic votes,” McConnell remarked. “Furthermore, I doubt they will reward incomplete efforts.” The bill was developed through discussions led by Rep. Jason Smith, R-Mo., who chairs the House Ways and Means Committee, and Sen. Ron Wyden, D-Ore., who chairs the Senate Finance Committee.
It aims to reinstate full, immediate deductions for businesses on the acquisition of new equipment and machinery, as well as for domestic research and development expenditures. These tax incentives had previously expired as a cost-control measure under the 2017 tax legislation approved by Republicans during the Trump administration. According to the Center on Budget and Policy Priorities, a liberal think tank, the adjustments to the child tax credit could potentially lift up to 500,000 individuals out of poverty once the proposal is fully implemented.
The proposed legislation aims to finance itself by advancing the deadline for companies to submit retroactive claims for employees retained on their payrolls throughout the COVID-19 pandemic. The Internal Revenue Service has indicated that a substantial portion of these retroactive claims is at a heightened risk of fraudulent activity. Given that the bill appeared to lack sufficient support to navigate procedural challenges, Schumer had refrained from bringing it to a vote for several months.
However, the onset of the election season provided an opportunity for Democrats to highlight the issue and target Vance. Schumer explicitly mentioned “the junior senator from Ohio” during his remarks on the Senate floor, clearly indicating that Vance was a consideration in the decision to hold the vote. In a Fox News interview, Vance asserted that Vice President Kamala Harris, who is currently the frontrunner for the Democratic presidential nomination, was advocating for the termination of the child tax credit. However, the Biden administration was instrumental in enhancing the child tax credit during the pandemic and made unsuccessful attempts to maintain the expansion, which temporarily raised the credit to $3,000 annually, included 17-year-olds, and increased the amount to $3,600 for children under the age of six.
Schumer characterized Vance’s assertion as “plain old nonsense,” asserting that the expansion in 2021 represented one of the most significant accomplishments for Democrats during the Biden-Harris administration. Vance previously indicated in 2021 that political figures without biological children “do not truly have a direct stake” in the nation. He reiterated these comments after they gained renewed attention, stating this week on SiriusXM’s “The Megyn Kelly Show” that the Democratic Party has become “anti-family and anti-child.” On Thursday, Vance was in Arizona at the U.S.-Mexico border and did not participate in the vote. His office did not respond to inquiries regarding his potential voting stance.
Wyden remarked, “There is often considerable discussion among Republicans regarding their commitment to supporting families, competing with China, and addressing fraud in government programs; however, they have just dismissed a bill that would effectively achieve all these objectives in a single initiative.” Democratic Senators Sherrod Brown of Ohio and Bob Casey of Pennsylvania, both facing competitive elections this fall, expressed their support for the bill on the Senate floor.
Conversely, Senator John Cornyn, R-Texas, characterized Thursday’s proceedings as yet another instance of “show votes” intended to fail, which would nonetheless furnish Democrats with “a talking point or two for their campaigns.” Senator John Thune of South Dakota, the second-ranking Republican in the Senate, acknowledged that the legislation contains positive elements but asserted that “if we are in a position to address this next year, it will be a significantly stronger bill.” Thune indicated that it would not be challenging for Republicans to counter claims of inadequate support for tax relief aimed at businesses and families. “There are specific issues where voters inherently recognize that Republicans excel,” Thune stated. “While they may attempt to present that argument in a political advertisement, I believe it will be difficult to maintain, especially when most voters recall that it was Republicans who enacted tax cuts in 2017 and that next year, if we hold the majority, it will be Republicans who extend those tax cuts.”