In the debt ceiling agreement last spring, House Republicans passed legislation making modest changes to work requirements for certain government programs. Less than 12 months later, another congressional agreement could effectively undo that progress.
Congressional leaders recently announced an agreement on a tax package, the rumors of which had been circulating for several weeks. The House Ways and Means Committee passed the agreement shortly thereafter. In so doing, committee members took another step toward expanding the welfare state, one that will lead to more low-income families on the government rolls than in work.
Child Subsidy Changes
As previously noted, the tax agreement made changes to a child subsidy program supported by Democrats in exchange for business tax provisions favored by Republicans. The following are among the noteworthy changes to the child subsidy program included in the bill.
Refundability: The legislation increases the portion of the subsidy considered refundable — that is, the amount that households can receive as a cash payment over and above any income tax liability they have. Under current law, $1,600 of the $2,000 subsidy is refundable, but the legislation would increase that threshold to the full $2,000 in 2025. While this provision, along with the others discussed below, will technically expire in 2025, Democrats will likely move to extend all of them as part of consideration of the Trump tax plan, major portions of which will also expire next year.
While Congress calls this particular program the “child tax credit,” the term in many respects constitutes
