A $78 billion bipartisan tax-cut package faces a tough challenge from Senate Republicans. Senate Republicans are poised to sink the package, gambling that they’ll win the majority in November and then push for bigger business breaks.
According to lawmakers and aides, supporting child and business tax breaks would mean handing President Joe Biden an election-year victory on the legislation. Notably, the package was the top business lobbying objective this year. It quickly passed the Republican-controlled House in January 2024 on a bipartisan 357 to 70 vote.
The House passed the legislation on Wednesday, January 31, to expand the Child Tax Credit and restore several business tax breaks. Experts say it was a rare feat in an otherwise bitterly divided Congress that has frequently suffered crippling dysfunction.
Lawmakers sent the $78 billion tax package to the Senate with strong support from both Republicans and Democrats, as well as the White House. However, some House progressives voted against the package, saying it wouldn’t do enough to slash child poverty.
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Republicans on the right also joined in, grumbling that it was an expansion of the welfare state in disguise. But moderates from both parties provided the tax deal with the two-thirds majority it needed to get through the House. Notably, Senate Republican leader Mitch McConnell and his No. 2, John Thune, support efforts to block the package.
According to a GOP aide, many considered both senators possible bill supporters. However, they are now bending to strongly oppose the child tax credits from Mike Crapo of Idaho, the top Republican on the Senate Finance Committee.
With McConnell abandoning his long-held leadership post, Thune is vying for the top spot and wants to avoid running afoul of a critical committee leader. Therefore, the issue has become ensnared in internal Senate GOP politics. According to reports, Crapo sent Democrats a list of requested changes to the bill in March.
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The list included requiring parents of children receiving the credit to supply Social Security Numbers to verify their immigration status. Also, it required them to rescind the retroactive break for 2023. However, Democrats are unwilling to back these additional changes to the bill, which they hashed out in bipartisan negotiations.
The measure would restore expired tax breaks, allowing businesses to quickly recoup domestic research and development costs. It would also allow them to recoup interest on business loans and investments in equipment promptly.
Also, working poor parents would receive more generous child tax credits. The law would make them eligible for the first time to claim multiple children. A coalition of business groups, including the US Chamber of Commerce, has lobbied hard for the bill for months.
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With the challenges facing the tax-cut package, the businesses are making a final effort for GOP support. At least nine Republicans would have to support the bill to overcome an expected filibuster.
The National Association of Manufacturers started a digital ad campaign in multiple states, including McConnell’s home state of Kentucky. They are urging the Senate to pass the tax bill. The bill is also running into the Senate schedule, which will begin the impeachment trial of Homeland Security Secretary Alejandro Mayorkas on April 11.
Therefore, Democratic aides say a rush vote on the package would be doomed to fail. Yet, legislation advocates are urging Senate Majority Leader Chuck Schumer to take the risk of setting up a vote.
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