Beyond Covid relief: Biden invokes LBJ as Democrats aim to expand welfare state

Top of the list is the permanent child tax credit, an advocate that proponents believe could generate bipartisan support, and that’s what analysts say would cut child poverty in half. However, some lawmakers and outside experts believe the Democrats will also struggle to maintain the Earned Income Tax Credit extension and a second child and dependent care program, while further increases in food aid and unemployment benefits are likely are.

“Get something out of it [tax] Code is often harder than putting something in code, ”said Richard Neal, D-Mass., Chairman of House Ways and Means. said. “What we’ve done is unlikely to go away.”

The approach suggests that Biden’s $ 1.9 trillion plan – historical in size and scope – is only the first step towards a potentially significant welfare state expansion and shift towards expanding the role the government could represent in helping the poorest Americans.

This, in turn, could represent a major breakthrough for progressive leaders who have been pushing for more generous benefits for years.

“We focused on these issues for a very long time, but the moment hit us,” said MP Rosa DeLauro (D-Conn.), Who first passed legislation this week 18 years ago to make child tax credits permanent . “We are poised to move forward in a number of areas that have not been able to achieve this traction, this universal support in the past.”

Biden said Friday that the bill “changes the paradigm” by moving away from trickle-down economics theory and instead putting the working people first – the first time this has happened, he said, since Lyndon Johnson was President in the 1960s.

“It’s time we built an economy that grows from the bottom up,” he said, “and from the center out.”

Cementing these priorities will not be easy, however, as Republicans slam Biden’s relief bill as an inflated progressive wish list and sound the alarm about rising deficit spending. The Committee for a Responsible Federal Budget, which works to reduce the deficit, It is estimated that the cost of the $ 1.9 trillion plan could more than double As soon as various programs are permanent or are extended beyond their current expiration dates.

Beyond cost, other GOP lawmakers have concerns about expanding programs that have been passed as temporary measures under the guise of coronavirus relief when they have little to do with the pandemic.

“We need to see it through that lens,” said a policy advisor to Rep. Jason Smith (R-Mo), who has a history of sponsoring child tax credits. “Is it Covid relief or is it just another democratic priority?”

Texas Rep. Kevin Brady, top Republican on the Ways and Means Committee, said it was clear that Democrats “are eager to create ever bigger entitlement programs” – tax credit for children, but also family vacations and an ongoing role for the federal government in unemployment benefits. However, he cautioned that sending checks to families would do little to address the systemic problems that caused their plight in the first place.

“Your tactic of just spending more – what was effectively lost in the war on poverty – instead of addressing the underlying symptoms that caused that poverty, in my opinion, is going to fail,” he said.

Brady said that temporarily adding such generous benefits to the bailout plan does not automatically mean they will stay here. In the past, however, it has been difficult, if not impossible, for politicians to reverse tax cuts or tax credit increases once they have come into effect. And Republicans have had more trouble making arguments against the deficit since they passed sweeping tax cuts in 2017 under then-President Donald Trump, a plan that also cost more than $ 2 trillion, said Brian Riedl, a former long-time Republican economic aid worker .

“The prospect of a cliff flooding the middle class is far too unpopular for politicians to think about,” said Riedl, who now works as an economic policy and tax expert at the right-wing Manhattan Institute.

“The right way to think about this bill,” he said, “is also to make a down payment on a wish list of progressive goals that will go well beyond the pandemic and recession.”

The child tax credit that has been expanded under the new law from USD 2,000 to a maximum of USD 3,600 per child for one year is the first temporary change that could soon be permanent, also because Biden himself has expressed his support for it.

On a call to House Democrats advocating permanent extension, the president also said his recommendation to do so was to “listen to Rosa” according to three people who overheard or were informed about the call.

Supporters of the Child Tax Credit, which the relief plan also made available to millions of low and no income families, say there is a dynamic behind making it permanent in both the House and Senate. They are considering whether Biden’s second stimulus package – another multi-billion dollar plan that Democrats want to release by the end of May – could be a means for taking this step.

If no progress is made there, the Democrats could push for separate legislation – the DeLauro reintroduced last month with representatives Suzan DelBene from Washington and Ritchie Torres from New York – or work it into a tax package that was passed before the end of the year.

“It’s fair to say that the child tax credit was the most consistent, but least controversial, provision of the American bailout plan,” said Torres. “So there is reason to be hopeful.”

The expansion is also an idea that has had support on both sides of the aisle in the past – Utah Republican Senator Mitt Romney made his own proposal on it last month. And it’s an area where Democrats see a real opportunity to make lasting change, as it would be difficult not to extend the benefit as families grow and depend on regular payments straight to their bank accounts.

Democrats and supporters also argue that the plan will pay off given how much the US is already spending each year fighting child poverty. And they focus on getting quick access to programs that they have been advocating for years.

“Guidelines like these were good ideas before the pandemic, [and] Even more important during the pandemic, ”said DelBene. “And it’s incredibly important that we continue these efforts over the long term because of the potential impact.”

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