Good morning! It’s Thursday, July 15, 2021. Election Day 2022 is 481 days away. Election Day 2024 is 1,209 days away.
Biden administration sends first monthly child payments, a milestone for anti-poverty efforts
Congress isn’t holding any major votes today, and President Joe Biden isn’t slated to deliver a landmark address.
But this is a significant day for the Biden presidency nonetheless, as a key policy initiative of his administration begins to be enacted and a longtime dream of many anti-poverty crusaders is finally realized.
Today is when the first installments of Biden’s enhanced Child Tax Credit will be sent to families across the country. The U.S. has had a Child Tax Credit (CTC) in some form since 1997, but the American Rescue Plan Act of 2021 — the $1.9 trillion stimulus package signed into law by Biden in March — expanded the benefit substantially.
For one thing, the tax credit was increased to $3,600 a year per child under 6 years old and $3,000 a year per child 6 to 17 years old, from the previous $2,000 a year per child up to 16 years old.
Secondly, the credit was made fully refundable (meaning that taxpayers can benefit even if they don’t have any earned income and don’t owe income taxes) and the previous $2,500 income floor was removed — meaning that poor families without an income will receive the benefit, unlike in past years.
And finally, the benefit will be available this year for the first time as a monthly payment rather than a lump sum at the end of the year.
That means that most American families will receive $300-a-month per child 6 years old and younger and $250-a-month per child 17 years old and younger.
Those first monthly payments are being sent by the Internal Revenue Service (IRS) today — by direct deposit if the agency has bank account information for a family, or by check otherwise. (Families can use this IRS portal to provide or update their bank account information or to unenroll from receiving the payments monthly.)
According to the Treasury Department, a total of almost $15 billion will be paid today to about 39 million families, covering nearly 60 million children. Per an estimate by the non-partisan Tax Policy Center, 92% of families with children will receive an average of $4,380 through the expanded CTC this year; previously, 89% of families received an average of $2,310 annually through the tax credit.
(While there is no income floor for the new CTC, there remains a ceiling, which is why not all families will receive it: the tax credit begins to phase out for jointly filing couples making more than $150,000, single filing individuals making more than $75,000, or single parents making more than $112,500. Families can check their eligibility here.)
Experts project that the new benefit will cut child poverty nearly in half. According to an analysis by Columbia University’s Center on Poverty and Social Policy, the expanded CTC will slash the child poverty rate to 7.5% from its current rate of 13.6%, a 44.9% reduction.
The same analysis projects that the poverty rate will be reduced by 45.4% for Hispanic children, by 52.4% for Black children, and by 61.5% for Native American children.
This change is more than just a tweak in tax law: it marks a momentous shift in U.S. efforts to combat poverty. The enhanced tax credit is essentially the nation’s first experiment with a monthly national child allowance, a policy already adopted by Great Britain, Germany, and a litany of other countries.
“For the first time in our nation’s history, American working families are receiving monthly tax relief payments to help pay for essentials like doctor’s visits, school supplies, and groceries,” Treasury Secretary Janet Yellen said in a statement. “This major middle-class tax relief and step in reducing child poverty is a remarkable economic victory for America — and also a moral one.”
However, the expanded tax credit also has its critics: Republican lawmakers, who voted unanimously against the March stimulus package, have decried the elimination of the income requirements for the benefit, saying it removes an incentive for Americans to find work.
“Not only does Biden’s plan abandon incentives for marriage and requirements for work, but it will also destroy the child-support enforcement system as we know it by sending cash payments to single parents without ensuring child-support orders are established,” said Sen. Marco Rubio (R-FL), who was a chief advocate for the most recent expansion of the CTC, as part of the Trump-era tax cuts in 2017.
“The Biden Child Allowance is anti-work, and it certainly isn’t pro-family. No one should be fooled.”
Democrats are preparing to launch a full-court press to showcase their new benefit to the public. President Biden and Vice President Kamala Harris will deliver remarks on the tax credit today, as will House Speaker Nancy Pelosi (D-CA), Senate Majority Leader Chuck Schumer (D-NY), and other Democratic lawmakers.
The Democratic National Committee (DNC) and other party groups also released a new digital ad this morning about the tax credit, previewing how the party is expected to trumpet the new payments while campaigning in the 2022 midterms.
Their efforts take on particular import after recent findings by a pro-Biden super PAC that voters were largely unaware of the provisions in the American Rescue Plan and the president’s other policies, a dynamic Biden is hoping to change as he strives to keep his party in control of Congress next year.
At the same time, a legislative fight over the future of the Child Tax Credit is brewing. The American Rescue Plan Act only made changes to the CTC for one year: after December, the tax credit will revert to its previous form. (Because the monthly payments are only starting now, that means families are scheduled to receive six monthly payments this year. The other half of their tax credit will be dolled out at the end of the year.)
However, Democrats are hoping to use the upcoming budget reconciliation process to extend the enhanced version of the tax credit. President Biden has proposed extending the expanded tax credit through 2025; according to the Wall Street Journal, the $3.5 trillion budget framework announced on Tuesday is likely to extend the credit through 2024.
From there, Democrats hope that the tax credit becomes such an integral part of the American social safety net that it will be impossible to undo and eventually made permanent.
“This is a day worth celebrating,” said Rep. Rosa DeLauro (D-CT), who has been pushing to expand the Child Tax Credit for decades, “but let it be just the beginning.”
More top stories to know this morning.
A new Trump book. “In the waning weeks of Donald Trump’s term, the country’s top military leader repeatedly worried about what the president might do to maintain power after losing reelection, comparing his rhetoric to Adolf Hitler’s during the rise of Nazi Germany and asking confidants whether a coup was forthcoming, according to a new book by two Washington Post reporters.” Washington Post
- Key quote: “‘This is a Reichstag moment,’ [Charman of the Joint Chiefs of Staff Mark] Milley told aides, according to the book. ‘The gospel of the Führer.’”
The latest on reconciliation. “Sen. Joe Manchin, the Democrats' most pivotal swing vote, expressed his most serious concerns yet about a key element in their party's $3.5 trillion sweeping economic plan: Provisions dealing with climate change that have been sought by progressives.” CNN
- More: “Manchin, who hails from coal-producing West Virginia, told CNN that he's ‘very, very disturbed’ by provisions he believes would eliminate fossil fuels — a warning sign for Democrats who need all 50 members of their caucus to sign off on the plan in order to get it through the Senate.”
Democrats propose marijuana decriminalization bill. “Senate Majority Leader Chuck Schumer proposed legislation Wednesday to legalize marijuana at the federal level, a move aimed at easing restrictive drug policies that have disproportionally impacted communities of color and the poor.” CNBC
Policy Roundup: Legal
On Thursdays, Wake Up To Politics contributor Anna Salvatore offers a briefing on the top stories from the legal world this week:
Do detainees at Guantanamo Bay have due process rights? According to the New York Times, the Justice Department will answer this question by a Friday night legal deadline. If detainees do have these rights — meaning that they cannot be deprived of “life, liberty, or property without due process” under the Constitution — then they will have much more power to challenge their detentions. In a panel ruling last August, the D.C. Circuit Court of Appeals ruled that the Due Process Clause actually does not apply to detainees. The full court is re-hearing the case now.
A California man arrested for charging the U.S. Capitol on January 6th appears to have masqueraded as a reporter. In court filings this week, prosecutors included pictures of the man wearing a helmet and tactical vest labeled as “PRESS,” even though he had never been employed by a media organization. Ordinarily, the Justice Department exempts journalists “from certain law enforcement tools… that might unreasonably impair newsgathering activities.” The government found this man, writes Buzzfeed News, because he bragged on a Twitch livestream about breaking into the Capitol.
On Tuesday, pro-choice advocates sued to block a Texas law that bans abortions after six weeks and penalizes anyone who helps women obtain abortions. The new law, which will go into effect in September, is one of the most restrictive in the country. Although abortion patients cannot be sued under the legislation, the Washington Post notes that their doctors can be hauled into court by “a controlling parent, disapproving neighbor or abusive spouse.” Tuesday’s lawsuit is unique because it seeks to prevent all of Texas’s trial court judges from enforcing the law and accepting lawsuits.
What’s happening in Washington today. (All times Eastern)
→ President Joe Biden will receive his daily intelligence briefing at 9:30 a.m. Later, at 11:45 a.m., he will deliver remarks on the Child Tax Credit payments being sent out today.
At 2 p.m., he will welcome German Chancellor Angela Merkel to the White House. At 2:25 p.m., Biden and Merkel will participate in an expanded bilateral meeting to discuss “the threat of climate change, ending the COVID-19 pandemic, addressing security and regional challenges, and shoring up democracy around the world, among other topics.”
At 4:15 p.m., they will participate in a joint press conference. At 6:30 p.m., President and First Lady Biden will host Merkel and her husband Joachim Sauer for an official dinner. It is likely Merkel’s last visit to Washington as chancellor; she is slated to leave office later this year after serving in the role since 2005. She is the first European head of state to visit Biden’s White House. He is the fourth U.S. president she has met with in her 16 years leading Germany.
→ Vice President Kamala Harris will host Chancellor Merkel for a working breakfast at the Naval Observatory, the vice presidential residence, at 9:30 a.m. It is the first time Harris has hosted a foreign leader at her residence since taking office.
Harris will then join Biden for his event on the Child Tax Credit at 11:45 a.m. and, along with Second Gentleman Doug Emhoff, at his dinner for Merkel and Sauer at 6:30 p.m.
→ White House Press Secretary Jen Psaki will hold her daily press briefing at 12:30 p.m. She will be joined by Surgeon General Vivek Murthy, who will speak about COVID-19 misinformation.
→ The Senate will convene at 10 a.m. Following Leader remarks, the chamber will resume consideration of the nomination of J. Nellie Liang to be Under Secretary of the Treasury for Domestic Finance. At 11 a.m., the Senate will vote on Liang’s confirmation, followed by a vote on confirmation of Donald Remy to be Deputy Secretary of Veterans Affairs.
Liang is a senior fellow at the Brookings Institution who previously served as a Federal Reserve economist and was nominated by President Trump for a seat on the Fed board in 2018 before withdrawing herself. Remy is a retired Army captain who is now the chief operating officer and chief legal officer of the National Collegiate Athletic Association (NCAA).
At around 1:45 p.m., the Senate will hold a cloture vote to advance the nomination of Tiffany Cunningham to be a U.S. Circuit Judge for the Federal Circuit. Cunningham is a Chicago attorney who would be the first African-American judge ever to sit on the Federal Circuit.
→ The House is not in session.
→ The Supreme Court is not in session.
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