Senate GOP blocks bipartisan bill to expand child tax credit

Senate Republicans on Thursday blocked a bipartisan bill that would boost a tax credit for parents as the GOP and Democrats feud over remarks from Republican vice presidential nominee Sen. JD Vance (Ohio).

Senators voted 48-44 to advance a bill co-authored by Sen. Ron Wyden (D-Ore.) and Rep. Jason Smith (R-Mo.) that would have raised the child tax credit (CTC), ended the fraud-ridden Employee Retention Tax Credit (ERTC) program and reinstated other tax credits for businesses.

The bill needed the support of at least 60 senators to overcome Thursday’s initial hurdle.

Sens. Josh Hawley (Mo.), Rick Scott (Fla.) and Markwayne Mullin (Okla.) were the only Republicans to vote to advance the measure. Sens. Bernie Sanders (I-Vt.) and Joe Manchin (I-W.Va.) voted against the measure.

Vance and seven other senators missed the vote.

After breezing through the House with wide bipartisan support in January, the Wyden-Smith bill stalled out in the Senate because Republicans feared it could provide a big win for Democrats ahead of the election. Senate Republicans also said the bill did not impose strict enough work requirements for CTC recipients.

But in the wake of controversial remarks by Vance, who dismissed Democratic leaders as “childless cat ladies,” Democrats seized an opportunity to turn that argument against Republicans, putting the CTC expansion up for a vote.

Senate Majority Leader Chuck Schumer (D-N.Y.) teed up the bill for a vote before the Senate adjourned last week.

“Senate Republicans love to talk about how they are the party of family and business. So it’s very odd to see them come out so aggressively against expanding the child tax credit and rewarding business with the [research and development] tax credit,” Schumer said on the floor of the chamber.

Schumer initially voted for the measure but switched to opposition, which is a procedural move that allows him to call another vote on the bill.

Wyden, chair of the Senate Finance Committee, made much of the same argument Monday.

“[Republicans] just haven’t been willing, as I said, to actually follow through with their kind of rhetoric. The rhetoric is that they care so much about kids and family. But then when you look at what happened in February, in March, in April, in May, in June — you just go on and on — they haven’t been there,” Wyden said.

Sen. Mike Crapo (Idaho), the top Republican on the Finance Committee, countered that Democrats have been well aware of Senate GOP qualms with the bill for months but made no effort to work out a deal. He accused Democrats of holding certain business deductions “hostage” for a “cynical” political ploy.

“There is no more obvious show-vote than the one … today, immediately before the August recess,” he said.

Democrats set up Thursday’s vote “in the hopes of fabricating a narrative that Republicans don’t support small business, children or alleviating poverty,” Crapo said.

“One would think the Senate Republican request for a Finance committee markup on this bill would have been well received. Instead, those requests, which began in January, have continued to go ignored,” he added.

Sen. Mike Crapo (R-Idaho) arrives to the Senate Chamber for a procedural vote regarding the Right To Contraception Act on Wednesday, June 5, 2024. (Greg Nash)

Republican Sen. Chuck Grassley (Iowa) told a reporter earlier in the year that passing the bill could make President Biden “look good,” which could help his reelection campaign and jeopardize the 2017 Trump tax legislation that Republicans want to renew.

In a Wednesday statement, Grassley also ripped Democrats for refusing to work with Senate Republicans to address their concerns about the scope of CTC expansion another qualms.

“Democrats couldn’t be bothered with a trivial thing like legislating. After all, they have nominees to confirm, and God forbid we work more than three days a week,” Grassley said.

On the substance of the bill, Republicans have objected to it on the grounds that there aren’t enough work requirements attached to the expanded child tax credit and that it could be available to non-Americans, among other concerns.

Sen. John Thune (R-S.D.) told The Hill in May it would “take a while” for the bill to gain any momentum as far as Republicans were concerned.

“I think it will take a while for it to get back on track. In the Senate right now, there aren’t the votes to move it,” he said.

But analysts say the political optics of the bill’s failure were more important for Democrats in Thursday’s vote than policy design, particularly in light of Vance’s recent comments that construed Democratic leaders as “a bunch of childless cat ladies who are miserable at their own lives.”

“The Democrats will then make commercials saying, ‘See? Republicans not only have a vice-presidential candidate who talks about cat ladies, but given the opportunity to actually help families with children, they didn’t do it,’” Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, told The Hill.

“That’s the game here. This is just a little bit of Congressional theater, a bit of Senate theater,” Gleckman added.

Garrett Watson, senior analyst at the Tax Foundation, said if the tax bill had passed, it would have represented a bigger win for Democrats than Republicans.

“That is the shared perception, generally speaking,” he told The Hill. “If the Democrats get their CTC expansion, as was in this bill, that’s going to be the camel’s nose under the tent to have more leverage going into next year,” he said.

Sen. Raphael Warnock (D-Ga.) hammered the point about Republicans voting down a tax cut on the Senate floor Thursday.

“The next time that I hear them talking about the need to cut taxes, I’m going to ask my colleagues how did you vote today? How did you vote when you had an opportunity to provide tax relief for ordinary people? Maybe the issue is not so much tax cuts — as for whom?” he said.

Aris Folley contributed.

Updated at 4:09 p.m. EDT