A group of Senate Democrats sent a letter Wednesday to President Joe Biden and Vice President Kamala Harris, urging them to reinstate the expanded child tax credit (CTC) through the Build Back Better Act (BBB).
The letter, signed by Sens. Michael Bennet, D-Colo., Sherrod Brown, D-Ohio, Cory Booker, D-N.J., Raphael Warnock, D-Ga. and Ron Wyden, D-Kans., described the CTC payments as "the biggest investment in American families and children in a generation."
The expanded payments increased the child tax credits from $2,000 with the tax return to $3,000 for children ages six to 17 and $3,600 for children under six. In 2021, half of the credit was paid out in monthly installments of $250 or $300, depending on the child’s age, and expired at the end of the year. The remainder will be credited in a lump sum by the Internal Revenue Service (IRS) with the 2021 tax refund.
The lawmakers, citing U.S. Census Bureau data, said about 91% of low-income families spent the money on necessities such as groceries, utilities, housing and school expenses. These payments, which were increased under the American Rescue Plan (ARP), expired at the end of 2021.
If you are struggling without the expanded CTC payments, you could consider taking out a personal loan while interest rates are low to help you pay down debt. Visit Credible to find your personalized interest rate without affecting your credit score.
CTC payments could boost economic development, lawmakers say
The letter stated that expanded CTC payments could reduce child poverty by more than 40% and cut hunger among families with children by 24%. The letter also made the case that the payments would return money to the economy.
"The benefits of the expanded CTC go far beyond helping American families make ends meet and raise their children today," the letter stated. "Economists estimate that every dollar invested in this policy returns an additional $7 in benefits to society in the long run by improving health, education, future earnings, and other outcomes.
For those having financial trouble following the end of CTC payments, a personal loan could help you pay down debt. If you're interested in this option, you can visit Credible to compare multiple lenders at once and choose the one with the best interest rate for you.
Democrats urge Biden to make CTC payments permanent
The lawmakers said they don’t just want to extend the CTC payments expansion, but rather they want to make it permanent. And they said the idea of making it permanent was popular among many Senate Democrats also, with dozens previously signing a letter requesting it.
"This policy is not only transformative, but popular," the letter stated. "Support for the expanded CTC has averaged nearly 60% since the first round of payments, and support for making the program permanent among recipients has averaged 73% since July. The policy also has strong support in Congress. In March 2021, we led a letter signed by 41 Senate Democrats urging you to not only extend the CTC expansion, but make it permanent."
However, not all Democrats are on board with the extension. Sen. Joe Manchin, D-W.Va., has said he won't back the Build Back Better Act unless a work requirement is added for those receiving CTC payments.
If you're struggling financially, you could consider taking out a personal loan to consolidate debt payments. Contact Credible to speak to a personal loan expert and get your questions answered.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at email@example.com and your question might be answered by Credible in our Money Expert column.