A top House Democrat suggested Thursday that his party scale back eligibility for child tax credits as a way to unlock President Joe Biden’s stalled economic agenda.
Representative Jim Clyburn of South Carolina, speaking in a video interview with the Washington Post, said he would support a lower income cap in a revived form of the child tax credit to get West Virginia Senator Joe Manchin to vote for Biden’s Build Back Better agenda.
“I would like to see him come forward with a bill for the child tax credit that’s means-tested. I think it would pass. He’d get it through the Senate. I think we could get it through the House,” Clyburn said. “So, there’s a lot in Build Back Better that he says he’s for — so, let’s do that.”
Manchin, in a radio interview Thursday, suggested the child tax credit should be “targeted” to individuals making less than $75,000 per year and that he is willing to discuss revisions to that could be made to keep it in the legislation.
“There’s a lot of conversations going on now. They’ve been reaching out and everything. We haven’t sat down, physically, and started any negotiations,” Manchin said on West Virginia MetroNews’s “Talkline” on Thursday.
But Manchin also reiterated concerns about inflation, which he has said would be exacerbated by more federal spending.
“You should be scared to death about inflation and what it can do,” Manchin said.
Clyburn said Manchin has spoken in favor of increasing health-care coverage for lower-income individuals through the expansion of Medicaid. Clyburn argued that making health care and child care more affordable would increase the number of working adults.
“I think the president says, let’s pass this chunk, and that chunk, and maybe we’ll get some parts done,” Clyburn said.
The House in November passed a $2 trillion tax, climate and social spending bill, but it stalled in the Senate in December after Manchin said he opposed it. Manchin’s vote is needed in the 50-50 chamber to pass any bill under the budget process.
Senators expect informal conversations on Build Back Better to pick up when the Senate returns to Washington next week, according to a person familiar with the situation.
Democrats still don’t know what Manchin will ultimately agree to and whether he needs to see lower monthly inflation numbers before ending his pause in the talks, the person said. Manchin has said he’s open to negotiating again with the White House on the stalled plan.
Manchin suggested scaling back the tax benefit for couples earning between $200,000 and $400,000 and he said he didn’t believe that parents who didn’t earn any income should be able to get the credit. Democrats last year allowed those without income tax liability to claim the credit in the form of monthly advanced payments.
Last year Democrats expanded the credit for households making up to about $150,000 a year, increasing the child subsidy to as much as $3,600 per child, up from $2,000. The credit phases out for parents making above that income threshold.
Scaling back the child tax credit based on income is likely to conflict with Biden’s pledge to not raise taxes on anyone earning less than $400,000.
Biden at a news conference this month suggested that the child tax credit may need to be dropped from the plan for it to pass the Senate. That prompted key Democratic senators, led by Colorado’s Michael Bennet, to demand the credit be retained as a centerpiece of the bill.
— With assistance from Laura Davison
