- President Joe Biden has proposed his 2024 budget which could decrease the deficit by nearly $3 trillion and restore the American Rescue Plan’s Child Tax Credit to its 2021 amount.
- The tax credit could expand the credit to $3,000 per child, and $3,600 for children under 6.
- Parents reported using the funds in 2021 to buy groceries and pay off debt or cover school-related expenses.
- Critics are concerned that the credit could discourage parents from working, but supporters argue that it will benefit families in need.
President Joe Biden has rolled out his 2024 budget proposal, a prospect that suggests restoring a tax credit enacted under the American Rescue Plan to return more money to Americans.
Many people have blamed the Biden Administration for inflation, which has hit the wallets of many Americans in sectors such as groceries and gas. In November, Newsweek reported that 61 percent of Americans felt Biden was “significantly” or “fairly” responsible for the inflation. Prices have slowly started to trend downward but still remain higher than average. As Congress faces a looming decision on whether to increase the nation’s debt ceiling, Biden rolled out his new budget proposal, which ABC News reported could decrease the deficit by nearly $3 trillion. The budget also proposes various benefits to Americans by putting more money in their pockets.
Under Biden’s proposed budget, the American Rescue Plan’s Child Tax Credit would be restored in full to its 2021 amount. According to a fact sheet provided by the White House, the tax credit cut child poverty in half in 2021, and if approved, would expand the credit to $3,000 per child, an increase of $1,000. Parents with children under the age of 6 would see an even bigger credit, with $3,600 proposed.
President Joe Biden released his budget proposal for 2024, and a return to the full Child Tax Credit from 2021 is included in the proposal. Getty
“The Budget would also permanently reform the credit to make it fully refundable. The President also calls on the Congress to make the Earned Income Tax Credit expansion for childless workers permanent, which would help pull low-paid workers out of poverty,” the White House wrote in the fact sheet.
According to a report by the Center on Poverty & Social Policy by Columbia University, 2021’s expanded Child Tax Credit lowered child poverty. The United States Census Bureau reported that parents reported using the funds—which consisted of several sets of monthly payments of $300—to buy household essentials such as groceries to feed their children. Others used the money to pay off debt or cover school-related expenses for their children.
However, in 2022, Congress refused to renew the act, lowering the tax credit back to its pre-existing $2,000 amount. Some states initiated their own version of the credit, but under Biden’s proposal, the credit would become a federal initiative once again.
Another benefit to the renewing the Child Tax Credit is if it resembles the 2021 version, families could see some of the money in the form of monthly payments, meaning they don’t have to wait for the lump sum at tax time and can use the funds sooner.
The 2021 expanded Child Tax Credit saw mixed reviews from legislators, with some conservatives voicing concern that more money in the form of a tax credit could dissuade parents from working. The Washington Post reported that some conservatives feared a growing dependence on the U.S. government through programs such as the Child Tax Credit and Medicare, but other legislators argue that the credit will help people in need more than hurt them.
Representative Rosa DeLauro, a Democrat representing Connecticut in Congress, has been a supporter of the credit, claiming on her website that the credit could aid in children’s ability to learn and be healthy.
DeLauro is one member of Congress who has encouraged the return of the full Child Tax Credit.
“I am proud that President Biden proposes an extension of the expanded and improved Child Tax Credit (CTC). That is a great first step, and I will work with the President to pass my American Family Act into law to finally make the CTC permanent,” DeLauro told Newsweek in a statement. “I have worked on expanding and improving the Child Tax Credit since 2003, and I am proud to have the support of President Biden in this effort.”
Newsweek reached out to the White House by email for comment.