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House Votes To Boost Well-Off Kids, Cut Out Poor Kids

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WASHINGTON -- The House of Representatives voted Friday to change a tax credit in a way that would add $115 billion to the deficit and hurt poorer parents while aiding the well-to-do.

By a vote of 237-173, mostly along party lines, the House decided to make permanent the child tax credit and expand it to families earning up to $205,000 a year. The credit, which is worth up to $1,000 for each child in a family, would also be indexed to rise with inflation, as would the eligibility thresholds.

But the new measure fails to extend the part of the credit that was passed in 2009 to help impoverished families and that currently allows parents with annual earnings as low as $3,000 to claim some of the break. That element expires in 2017. Without it, a family would have to earn at least $15,000 to qualify for the credit.

According to an analysis by the Center on Budget and Policy Priorities, that means a mom working full time at a minimum wage job would receive no help from the credit -- because she would be earning only $14,500. Indeed, that mom would lose $1,725 under the new bill, while a family of four earning $150,000 would gain $2,200, according to the center's analysis.

About 12 million people, including 6 million children, would be pushed further into poverty if the measure became law.

Democrats contrasted Friday's vote with the speech delivered Thursday by Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, who vowed to make a new GOP push to reduce poverty.

"Yesterday on the topic of poverty, Congressman Ryan spoke," said Rep. Sander Levin (D-Mich.). "Today, he and his House Republican colleagues will vote. Actions speak louder than words. And at every turn over the last three years, the actions House Republicans have taken have cut programs for low- and middle-income families."

The bill would also end the so-called marriage penalty for the child tax credit, ensuring that a married couple would receive as much of a break as two single parents.

Republicans argued that Democrats were raising a phony issue in pointing to the failure to extend the lower-income part of the credit. They said there was plenty of time to consider that later.

"I'm amazed by the other side doing time travel four years into the future when a lot of hardworking families are struggling every day right now to deal with this economy," said Rep. Lynn Jenkins (R-Kan.), the sponsor of the bill. "And that needs to be the focus of this debate."

Still, one of her colleagues, Rep. Kevin Brady (R-Texas), suggested that he didn't think much of tax breaks for poor people by lumping the lower-income section of the child tax credit together with the stimulus act in which it was first passed.

"It is expensive raising kids. It just is all across America. I don't know what you make or where you live. This is about making it a little easier to raise your children," Brady said, adding, "Here's what it doesn't do. It doesn't include the same failed stimulus programs the White House brought down upon America."

The bill also includes a provision that would bar anyone from receiving the tax break if they do not provide a Social Security number. Many immigrants, including the undocumented, pay their taxes using a tax identification number instead, and all of them would be barred under the bill.

Many Democrats objected to that provision because somewhere around 80 percent of the children of undocumented immigrants are believed to be U.S. citizens. Levin said some 5 million children, about 4 million of whom are citizens, would be cut off from the credit's aid.

Democrats described the name of the measure, the Child Tax Credit Improvement Act of 2014, as Orwellian.

"This bill does deserve a name. I think the best one would be 'Pushing More People Into Poverty Act,' since its net effect is to push 12 million people, including 6 million children, right into poverty or deeper into it," said Rep. Lloyd Doggett (D-Texas). "That includes 400,000 veterans and armed forces families who would lose all or part of their child tax credit."

The measure would add $115 billion to the deficit over 10 years because the House did not find any way to offset the lost revenue.

So far during this session of Congress, the House has passed permanent tax cuts that would add some $721 billion to the deficit over the next decade. President Barack Obama has threatened to veto most of them, as he did the measure passed Friday. The Senate is unlikely to take up the House bill, preferring to seek a shorter-term extension of the credit.

Michael McAuliff covers Congress and politics for The Huffington Post. Talk to him on Facebook.

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