On June 12, the House approved, 224-201, legislation (H.R. 1308) that would provide for $82 billion in new tax cuts through 2010, and make the $1,000 child tax credit available to more low-income families and higher-income married couples. The move could spark a confrontation with the Senate, which passed a smaller $10 billion plan (see The Source, 6/6/03). Additionally, immediately after passing H.R. 1308, the House agreed to a motion by Rep. Charles Rangel (D-NY), instructing House conferees to push for the narrower Senate version of the bill. Eight Democrats and eight Republicans who voted for the House bill also voted for the Rangel motion, which passed 205-201. While House negotiators are not bound by the motion, it puts the House on record in support of the Senate bill.
On June 5, in an effort to correct an omission from the May 30 tax cut bill, the Senate voted, 94-2, to restore eligibility to low-income children and families who had been left out of receiving the expanded child tax credit (see The Source, 6/6/03). H.R. 1308 was originally intended to correct the same omission, but House Republicans included additional tax cuts, including provisions that would make the child tax credit available to more higher-income families.
While both bills would make the child tax credit refundable, the Senate bill would guarantee that lower-income families receive rebate checks this year. The House bill also would increase from $110,000 to $150,000 through 2010 the income threshold for a married couple at which child tax credit eligibility would begin to phase out. The Senate bill would increase the threshold from $110,000 to $115,000 in 2008, and to $150,000 in 2010. The House plan also would extend the $1,000 child tax credit through 2010.
Democrats accused Republicans of using the child tax credit as a smokescreen for other tax cuts and urged the GOP to drop provisions not related to low-income families. “I am one of the few Democrats that joined my colleagues on the other side to vote for the President’s tax cut the last time,” said Rep. David Scott (D-GA). “But this is a different story, and I think we ought to recognize why the American people have us here in the first place at this time. It is not to come back for another tax cut. It is to address an omission, a very serious omission from the first tax cut, and that is to correct that by bringing a clean, crisp bill that pointedly addresses bringing the child tax credit to those working families at the lower-income levels. That is what we are about to do here. I think it is a sham.”
Republicans argued that the lower-income child tax credit is a misnomer, since many low-income families already pay little or no taxes.
“It is not a tax refund; it is not a tax credit. If we are going to do it, let us call it what it is, and it is welfare,” said Rep. Spencer Bachus (R-AL), responding to Democratic charges that the Republican bill excluded the poorest families. “When you get back money you have paid in, when we give the American people money they have paid in, that is a tax refund. That is a tax credit. When we take money away from some American taxpayers and we give it to someone else, that is not a tax credit. That is not a refund. That is welfare. … We are turning our Tax Code into a welfare system. And if we want to do that, let us call it what it is. Let us have a little truth in labeling. We are requiring 86 percent of the American people to pay their tax dollars to someone else, and that is welfare.”
