Senate Republicans Threaten TANK House-Passed $78 Billion Tax Deal Over Child Tax Credit Expansion, Giving Conservatives ‘Heartburn’

By William On Feb 1, 2024

Senate Republicans are threatening to scuttle a tax bill that passed the House of Representatives in rare bipartisan fashion.

The bill, authored by House Ways and Means Chairman Jason Smith, R-Mo., and Senate President Ron Wyden, D-Ore., passed the House 357-70.

The $78 billion package would expand the child tax credit, but some Republicans object to the work requirements. It would also bring back the popular business deductions for research and development.

Senate Minority Whip John Thune said the deal would fall short of 60 votes — the number needed to break a filibuster without amendments, citing “decoupling the CTC from the work requirement, which is giving heartburn to many of our people.”

The bill already includes a work requirement, though it allows even those who don’t pay federal income taxes to apply for the credit in the form of a refund.

“We need a process that allows for some changes to accommodate and resolve some issues,” Thune said. “That could be on the floor and create a floor process that allows for some amendments. Or ideally (in the) Senate Finance Committee.”

The package would gradually increase the child tax credit from $1,600 to $2,000. It would also give families with multiple children the green light to get the credit more quickly, which would be adjusted each year for inflation.

It would also mean that companies would have to fully cover domestic research and development costs and that the deduction for the purchase of machinery and equipment would be increased until 2025.

GOP opposition in the Senate shows how out of sync the House and House Republican conferences are: Senate Republicans say they oppose the House-led, bipartisan tax deal, just as House Republicans do remaining stubbornly opposed to the Senate-led, bipartisan national security and border crossing. negotiations.

Even before the text of the border and aid deal between Ukraine and Israel has been released, Chairman Mike Johnson has declared it essentially “dead on arrival.”

Sen. Chuck Grassley, R-Iowa, said he’s concerned the tax bill will make President Biden “look good” in the 2024 election and that he could win and they won’t pass an extension of to push through Trump-era taxes. cuts.

“I think passing a tax bill that makes the president look good by handing out checks before the election means he can get re-elected and then we won’t renew the 2017 tax cuts,” he told reporters .

Republican Sen. Thom Tillis, R-N.C., told reporters he is “not going to make it easy” for the deal to pass the Senate. ‘It’s bad timing. I think it’s a mistake to do it.’

Last week, Sen. John Cornyn, R-Texas, called the payments in the deal “fake.”

Cornyn told DailyMail.com on Wednesday that he wanted a tax bill to go through the Finance Commission, which, as usual, he is part of.

“Right now it’s just an agreement between two guys,” he said, but did not say how he would vote on it.

The deal would also expand the low-income housing tax credit to attract developers to build affordable rental housing.

Top negotiator Wyden said these facilities would benefit 15 million children from low-income families and help build some 200,000 affordable homes.

The agreement also provides disaster tax credits, which would provide relief to those affected by recent hurricanes, floods, wildfires and even the train derailment in East Palestine, Ohio — a provision that could attract reluctant members from both sides.

It would eliminate double taxation in Taiwan for companies operating in both the US and Taiwan.

To recoup the cost of the provisions, the deal would shorten the period in which new claims can be made for the Covid-era worker tax credit, which negotiators say is ripe for fraud. That currently offers employers a credit of up to 70 percent on an employee’s first $10,000 of wages for each quarter, or up to $28,000 per year.