BOOKER, BROWN, BENNET, WYDEN, WARNOCK PRESS SENATE DEMOCRATS TO MAKE CRITICAL CONTROL CUTS FOR EMPLOYEES AND FAMILIES IN THE NEXT RECOVERY BILL
Senators successfully enacted EITC and CTC regulations to put money in the pockets of working families and lift millions of children out of poverty into America's rescue plan. Democrats are now urging President Biden to make extensions in the next Restoration Act permanent
WASHINGTON, D.C – The US Senators Cory Booker (D-NJ), Sherrod Brown (D-OH), Michael Bennet (D-CO), Ron Wyden (D-OR) and Rev. Raphael Warnock (D-GA) led the 41st today Senate Democrats urge to build on the success of the US bailout by making critical tax credits permanent for working families. The American bailout was a historic investment in the economic well-being of children, families, and workers. Extending the EITC and Child Tax Credit (CTC) for one year will help reward work, support families, and lift millions of children out of poverty. The Senators now want to build on that success by calling on President Biden to make these critical tax credit extensions permanent in the next recovery plan he sends to Congress.
"Two weeks ago, as part of the US rescue plan, President Biden signed historic but temporary additions to the child tax credit and the earned income tax credit." said Senator Booker. “These expansions are among the most transformative economic policies Washington has taken in decades. Not only will you be providing much-needed aid to millions of families and workers across the country, but you will also take a bold step in dealing with the poverty crisis. In New Jersey alone, these expanded tax credits will lift 89,000 children and their families above the poverty line and put more money in the pockets of 354,000 New Jersey workers struggling to get through. Making this expansion permanent is critical to our long-term economic recovery and rebuilding our economy in a way that expands access to opportunity for all. "
“Even before the pandemic, hard work didn't pay off for millions of workers. Ohioans wanted us to make it big and make a real difference in their lives. That's what these tax credits do. EITC and CTC are two of the best tools to put money in the pockets of working families and lift millions of children out of poverty. " said Senator Brown. "And we're not going to stop there. Now we need to make these enhancements permanent to reward work, reduce poverty, and improve the lives of millions of Americans."
“The expansion of the child tax credit and the earned income tax credit in the American Rescue Plan is the most significant investment in America's families and workers for generations. The one-year extensions will cut child poverty almost in half and increase the incomes of workers without children. It would be a shame to let these changes phase out after just a year. " said Senator Bennet. "By making these expansions permanent, we can sustainably support America's children and workers and build an economy that works for everyone, not just the people at the top."
“Making our historic earned income and child tax credits permanent would be one of the most effective steps we could take to build a brighter future for working families. If you're a working mom struggling to pay rent and buy groceries, a few hundred dollars a month makes all the difference in the world for your family and we won't stop until we get that done. " said Senator Wyden.
“With the passage of the US rescue plan, Washington lawmakers demonstrated that we have the ability and strength to tackle the scourge of child poverty in Georgia and across our country. While the one-year expansion of both the Child Tax Credit and the Earned Income Tax Credit is an important first step in getting more money into the pockets of families and individuals who need it most, Congress can and should protect child poverty eliminate every time " said Senator Rev. Warnock. "We need to expand these two tax refund programs permanently, and I will continue to work as hard as possible with my Senate colleagues to make that happen."
The following Senators joined Booker, Brown, Bennet, Wyden and Warnock in their letter: Sens. Markey, Blumenthal. Baldwin, Cardin, Whitehouse, Durbin, Van Hollen, Reed, Warren, Menendez, Padilla, Duckworth, Lujan, Gillibrand, Murray, Casey, Hirono, Stabenow, Merkley, Smith, Sanders, Klobuchar, Heinrich, Murphy, Peters, Leahy, Cantwell , Kaine, Schatz, Feinstein, Hickenlooper, Coons, Warner, Cortez Masto, Ossoff and Rosen.
A copy of the Senators' letter to President Biden appears HERE and below:
Dear President Biden,
Thank you for your strong leadership as our country begins to recover from the COVID-19 pandemic. The American rescue plan you proposed and passed by Congress has put us on the path to defeating the virus and better rebuilding it. We shouldn't let this momentum fade. Hence, any further recovery plans you suggest should have some very specific programs that are permanent.
A key component of the US bailout plan is the one-year expansion of the EITC and Child Tax Credit (CTC). For decades, these tax credits have rewarded work, supported families, and lifted millions out of poverty. But for too long, persistent loopholes in the EITC have resulted in nearly six million adult workers being taxed in or further into poverty for qualifying for little or no loan. Due to loopholes in the CTC, 27 million children – a third of all children – were not eligible for the full loan amount, and some were given no loan at all.
Fortunately, the additions to these loans in the American Rescue Plan are temporarily correcting these persistent shortcomings. The expansion of the so-called "childless adult" EITC is projected to boost the incomes of 17 million low-wage employed adults, many of whom are on the front lines of the COVID-19 crisis as delivery drivers, housekeeping workers and grocery workers. The expansion of the CTC is estimated to cut child poverty in half. The American bailout plan is indeed a historic investment in the economic well-being of children, families, and struggling workers – and the EITC and CTC expansions are fueling that investment.
We cannot allow these critical extensions to expire after a year. This would lead to a significant rise in child poverty now that we have taken historic steps to end it. This would mean that millions of struggling adult workers would be taxed again in poverty. That is wrong and unacceptable. Reducing child poverty, increasing the economic security of low-wage workers, and narrowing the racial income inequality through these two important tax credits must be central to the stimulus plan that Congress is considering under your leadership later this year.
Recovery will only be complete if our tax law provides a lasting path to economic prosperity for working adults and families. Your upcoming recovery plan is the opportunity to make the extension of these credits permanent. To this end, we ask that your recovery plan include the following permanent measures that build on the temporary improvements made in the American rescue plan:
- Expand the so-called EITC "childless adult". The US rescue plan has practically tripled the maximum amount for eligible workers who do not raise children in the home.
- Lower the EITC Eligibility Age from 25 to 19 years and remove the maximum age. The minimum age for eligibility has unnecessarily excluded young adult workers from benefiting from the loan. Since employees work longer in life, the maximum age should also be permanently abolished.
- Make the CTC fully refundable. A fully refundable CTC ensures that all low and middle income families receive the full value of the loan, including the most deprived families who need it most.
- Increase the CTC from $ 2,000 to $ 3,000 (and $ 3,600 for children ages 0-5). A larger CTC will provide the more financial support families need to make ends meet. The larger infant tax credit provides additional support for children in their most critical years of development. Coupled with full refundability, these improvements have cut child poverty nearly in half, including reducing poverty among black children by 52 percent, Hispanic children by more than 45 percent, and children in tribes by more than 60 percent.
- Distribute the CTC monthly. The American Rescue Plan provides for the CTC to be distributed regularly from July 2021. Your recovery plan should formalize an optional monthly distribution system and provide the IRS with the resources it needs to successfully manage such an arrangement.
- Put in place tight security to prevent low-income families from getting repayment. Approximately 3 million children – many of whom have low incomes – change the adult they live with over the course of a given year. These low-income families should be protected from unexpected taxation by tight security (a "safe haven") in order to limit repayment. The IRS should provide a straightforward, accessible platform for applicants to notify the IRS of changes in marital status or income.
- Return to the previous CTC Eligibility Act. The 2017 Tax Act required children to be issued a social security number in order to qualify for the CTC. Your recovery plan should revert to pre-2017 tax guidelines so that children with social security numbers or individual tax identification numbers (ITINs) can qualify.
- Continue with the Earned Income lookback option. The American bailout plan allows applicants to replace their 2019 income in lieu of 2021 income to avoid losing the value of their EITC. This lookback option is an important tool in helping workers reduce income volatility and its harmful effects. Using previous year's income to calculate EITC benefits is the kind of optionality our tax code already offers corporate taxpayers. It should also be permanently available for low-wage workers.
The American bailout laid a strong foundation by making these improvements on a one-year basis and giving workers and families a significant income boost. These improvements are a necessary part of a recovery plan to ensure that children, families, and workers in difficulty receive the economic security they need. They also ensure fairer and more equitable tax legislation. If we are to truly rebuild better in the future, these changes must be made permanent to ensure a sustainable and equitable recovery for American workers and families.
With best regards,
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