Sen. Josh Hawley (R-Mo.) is proposing a huge expansion of the child tax credit (CTC), setting up a potential fight with budget hawks as GOP lawmakers work to hash out their priority tax bill.
Hawley wants to increase the CTC to a maximum of $5,000 from $2,000 per child, according to Axios, which first reported the plan.
“President Trump won with the support of working people with kids. Next year’s tax bill should provide them a big tax cut,” Hawley wrote in a post on social media.
The plan could add trillions to the national debt, which has ballooned to a new high of around $36 trillion following pandemic rescue measures.
When the CTC was beefed up from $2,000 to $3,600 per child in 2021, the Congressional Budget Office estimated that it would add $1.6 trillion to the deficit over the subsequent decade if it were made permanent.
Hawley’s plan is about double the size of that expansion, suggesting it could add more than $3 trillion to the deficit before accounting for inflation.
The plan could face resistance from Republicans concerned about spending levels.
Republicans are far from in lockstep about what to do about their tax bill, which is anticipated ahead of expirations in the tax code scheduled for the end of next year.
Incoming Senate majority leader John Thune (R-S.D.) said he wants to focus on a border security and energy production bill before moving on to tax reform later in the year.
But House Republicans have pushed back on that idea, saying they want either to do the tax bill first or to lump taxes, energy and border into the same bill.
Trump has yet to weigh in on the dispute between the chambers despite House Republicans saying they’re looking to him to break the impasse.
Conservative strategists are sounding notes of alarm about the lack of coordination within the Republican conference.
“To delay is to kill,” warned Grover Norquist, founder and president of Americans for Tax Reform, which opposes tax increases. “And all it takes is one bad car accident or an interesting scandal, and the Republicans don’t have the majority in the House anymore.”
The CTC will drop to $1,000 per child from its current level of $2,000 if it is not extended in new legislation next year.
When it was increased to $3,600 in the Biden administration’s American Rescue Plan, it helped to raise millions of children above the poverty level, according to research from Columbia University.
