Mitch McConnell draws a red line at $600 billion for infrastructure and jobs – and says Trump tax cuts are off-limits

McConnell
Senate Minority Leader Mitch McConnell (R-KY).

  • McConnell said the GOP won’t cut a deal with Biden above $600 billion on a jobs package.
  • He said there would be “zero” Republican support for Biden’s $4 trillion pair of spending packages.
  • Biden has proposed two packages with trillions of spending on physical and social infrastructure.
  • See more stories on Insider’s business page.

Senate Minority Leader Mitch McConnell drew a $600 billion red line for an infrastructure and jobs plan on Monday, an amount less than a fifth of the $4 trillion in economic spending plans that President Joe Biden has unveiled.

“We’re open to doing a roughly $600 billion package, which deals with what all of us agree is infrastructure and to talk about how to pay for that in any way other than reopening the 2017 tax reform bill,” he said at a press conference at Louisville, Kentucky.

The Senate’s top Republican flatly rejected going above the $600 billion price tag, saying “if it’s going to be about infrastructure, let’s make it about infrastructure.”

“I don’t think there will be any Republican support – none, zero – for the $4.1 trillion grab-bag, which has infrastructure in it but a whole lot of other stuff,” McConnell said. He also ruled out adjusting President Donald Trump’s tax law, a measure Biden wants to roll back to pay for his plans.

“We’re not going to revisit the 2017 tax bill,” he said. “We’re happy to look for traditional infrastructure pay-fors, which means the users participate.”

McConnell’s comments underscore the wide bridge between Republicans and Democrats on their economic priorities. Their ability to cut a deal will depend whether they can agree on methods to finance a package as well as its overall scope. Democrats are calling for aggressive spending while Republicans insist on narrowing a package’s focus.

Biden has rolled out $4 trillion in a pair of economic plans to shore up physical infrastructure such as roads and bridges, as well as manufacturing and broadband. His latest $1.8 trillion plan unveiled Wednesday would establish paid family and medical leave, universal Pre-K, tuition-free community college, and monthly cash payments for parents.

Biden has proposed lifting the corporate tax rate to 28% from 21% to cover part of the spending, a step that has strong backing among many Democrats.

A group of Senate Republicans led by Sen. Shelley Moore Capito of West Virginia unveiled a $568 billion infrastructure plan late last month. Much of that spending would directed towards areas Republicans strongly favor, such as roads and bridges, ports, waterways, and expanded broadband.

Capito and Biden spoke on Thursday in what she described as a “constructive and substantive call” on Twitter.

“We’re working with the White House, and I think it’s been very open-door, we’ve been very encouraged to keep moving forward, and that’s what we’re going to do,” she told Fox News on Sunday. Capito floated user-fees and repurposing unspent stimulus aid provided to state and local governments as a means of paying for the plan.

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Biden is betting big with plans to remake America. Here are 6 takeaways from Biden’s speech.

  • President Joe Biden delivered his first speech to a joint session of Congress on Wednesday night.
  • Biden called for an ambitious pandemic economic recovery plan focused on jobs, infrastructure, and childcare.
  • He also called for changes to immigration and foreign policy and asked the Senate to pass civil rights legislation.
  • See more stories on Insider’s business page.

President Joe Biden delivered his first speech to a joint session of Congress on Wednesday night, on the eve of his 100th day in office.

In his address before a pared-down audience due to the pandemic, Biden called for an ambitious pandemic economic recovery plan focused on jobs, infrastructure, childcare, and education. The proposals are some of the most progressive in decades – and ones unlikely to garner Republican support, as evidenced by GOP reactions in the chamber and on Twitter.

He also called for changes to immigration and foreign policy and asked the Senate to pass signature civil rights legislation – including police reform and voting rights legislation.

Here are the biggest takeaways from the speech.

Biden is betting big with his spending plans

Biden detailed an ambitious $4 trillion spending program focused on overhauling the American economy and recasting the role of government to better secure the welfare of families.

He’s fresh off the passage of a $1.9 trillion stimulus law in March, a measure broadly popular with American voters in part due to the $1,400 direct payments. He touted the federal checks and said the law contributed to a fall in hunger.

Biden quickly pivoted to his latest pair of economic plans, one to upgrade physical infrastructure and the other meant to level the playing field for middle and low-income families. The latest is a $1.8 trillion economic plan aimed at setting up sweeping new federal programs in education, childcare, and healthcare.

“These are the investments we make together, as one country, and that only government can make,” Biden said. “Time and again, they propel us into the future.”

Republicans are very unlikely to support the newest “American Families Plan” proposal. “There are individual components that conservatives might be more supportive, but the full $2 trillion package financed by big new taxes is absolutely a non-starter for Republicans,” Brian Riedl, a budget expert at the right-leaning Manhattan Institute, said.

The president also called on Congress to move on healthcare reform and raising the minimum wage

Biden urged Congress to raise the federal minimum wage, which hasn’t budged since 2009. “No one should work 40 hours a week and still live below the poverty line,” he said.

Democrats are united on raising the minimum wage but sharply disagree on the amount. Some like Sen. Bernie Sanders are pushing $15 an hour minimum wage, but others like Sen. Joe Manchin support a lower amount.

Biden also called lawmakers to step in and lower prescription drug costs, an initiative reportedly scrapped from his economic package.

“Let’s do what we’ve always talked about,” the president said. “Let’s give Medicare the power to save hundreds of billions of dollars by negotiating lower prices for prescription drugs. ”

Instead, he’s proposed extending health insurance subsidies for the Affordable Care Act as part of his spending programs.

He also threw his support behind the PRO Act, a bill designed to make it easier for workers to unionize. It has stalled in the Senate, unable to cross the 60-vote threshold known as the filibuster.

Biden talks immigration – but not the border

Biden also again called on Congress to pass comprehensive immigration reform, stressing the need to provide a pathway to legal status for millions of undocumented people in the United States – stressing that this was a bipartisan goal.

“Let’s end our exhausting war over immigration,” he said. “For more than 30 years, politicians have talked about immigration reform and done nothing about it. It’s time to fix it.”

The day he took office, Biden unveiled a proposal that would grant permanent residency to many migrant farm workers and citizenship for those who came to the US as children. On Wednesday, Biden said Congress should work to make those specific provisions law right away, acknowledging the difficulty of passing more robust reform in a 50-50 Senate.

“Congress needs to pass legislation this year to finally secure protection for the Dreamers – the young people who have only known America as their home,” he said. He also called for legislation to grant “permanent protections for immigrants on temporary protected status” and a process for granting citizenship to “farmworkers who put food on our tables.”

Biden did not, however, speak to the current status of US borders, which remain shuttered to all but unaccompanied minors – a recent influx of whom overwhelmed authorities, who have since scrambled to convert hotels and convention centers into holding facilities. The Biden administration continues to expel other asylum-seekers fleeing poverty and violence in the Americas, citing the pandemic and the need to rebuild a processing system decimated by the last White House.

Biden laid out a foreign policy plan that differs from the Trump doctrine

During his address, Biden’s focus on foreign policy centered mainly around strengthening the US’ relationship with allies and forging working but stern relations with Russia and China.

Biden said that in approaching foreign policy, his administration would operate on the belief that, “America is the most unique idea in history.”

In a contrast to Trump, Biden directly charged Russia for interference in the 2016 elections as well as the recent SolarWinds cyberattacks which breached government and private business systems.

The President added that in conversations with his Russian counterpart, he has “made clear,” to Vladimir Putin that the US will not seek escalation, but Russia’s, “actions will have consequences.” Biden added that the US and Russian should cooperate when interests are aligned.

Biden added that he had held hours-long conversations with Chinese President Xi Jinping and put forth a similar balance. The President also singled out Iran and North Korea’s nuclear programs, describing them as threats, but committed to working with allies and both nations through “diplomacy and stern deterrence.”

He also spoke about his promise to end the “forever war in Afghanistan,” acknowledging and justifying the US’ long footprint in the country. Saying that the US fulfilled their promise to bring Osama Bin Laden to the “gates of hell,” and that soldiers are serving in “the same war zone as their parents,” he said it’s time to bring troops home.

Biden addressed gun control policy and urged congressional action against gun violence in the US

During his address to Congress, the president called gun violence an “epidemic in America,” mentioning how the flag at the White House flew half-staff to mourn the lives lost at the Atlanta-area shootings and mass shooting in Colorado.

“In the week between those mass shootings, more than 250 other Americans were shot dead. 250 shot dead,” Biden said.

He touted his executive actions on guns following those tragedies but called for the Senate to act.

Biden called upon Senate Republicans to join Democratic members of Congress to “close loopholes and require background checks to purchase a gun” – such as the “boyfriend” loophole, which refers to a gap in gun legislation that allows partners convicted of domestic violence to purchase a firearm if their partner was not a spouse, didn’t have children with them, or live with them at any point.”

I will do everything in my power to protect the American people from this epidemic of gun violence,” he said. “But it’s time for Congress to act as well.”

The president called on the Senate to pass two pieces of civil rights legislation

Biden recalled meeting Gianna Floyd, the daughter of George Floyd, during her father’s funeral last year, saying how she was right in saying her father “changed the world” in light of the guilty verdict of ex-Minneapolis police officer Derek Chauvin in Floyd’s killing.

While he recognized that “most men and women in uniform wear their badge and serve their communities honorably,” the president urged Americans to come together to “rebuild trust between law enforcement and the people they serve” and “root out systemic racism in our criminal justice system.”

He urged lawmakers to pass the police reform bill named after Floyd by the first anniversary of Floyd’s death on May 25.

The president also cajoled the Senate to pass the John R. Lewis Voting Rights Act, which has already passed in the House.

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Biden will unveil $1.8 trillion spending plan to extend cash payments for parents, set up universal pre-K and free community college

Joe Biden
President Joe Biden speaks during an event with the CEOs of Johnson & Johnson and Merck at the South Court Auditorium of the Eisenhower Executive Office Building March 10, 2021 in Washington, DC.

  • Biden is unveiling $1.8 trillion in new economic programs for families on Wednesday.
  • The plan extend cash payments for parents and set up universal Pre-K – paid for with tax hikes on the wealthy.
  • Biden’s spending plans would rank among the largest in US history.
  • See more stories on Insider’s business page.

President Joe Biden will unveil a $1.8 trillion economic aid plan during his address to a joint session of Congress on Wednesday, seeking to devote massive new federal spending on families through new initiatives in childcare, education, and healthcare.

The proposal is designed as the second part of a massive infrastructure package to overhaul the American economy, following the release of a $2.3 trillion plan last month concentrated on repairing roads and bridges, domestic manufacturing, and in-home elder care. It’s offset with tax increases on rich Americans.

Taken together, they would rank among the largest spending programs in the nation’s history, totaling nearly $4 trillion. A senior administration official called them “once-in-a-generation investments in our nation’s future.”

“The American Families Plan invests in our children and our families, helping families cover the expenses that so many struggle with now, lowering health insurance premiums, cutting child poverty and producing a larger, more productive and healthier workforce in the years ahead,” the official told reporters on a Tuesday phone call.

The plan is patterned with an emphasis on recasting the role of government to slash inequality and shore up the middle class in an eight-year spending program consisting of:

  • $225 billion in childcare funding.
  • $225 billion for paid family and medical leave.
  • $200 billion for free universal Pre-K.
  • $200 billion to permanently extend Obamacare insurance subsidies.
  • $109 billion for two years of free community college.
  • $45 billion in nutrition-related spending.

The plan also attempts to make permanent some elements of Biden’s $1.9 trillion stimulus law – mainly, the expanded tax credits for families as well as subsidies to purchase health insurance in marketplaces under the Affordable Care Act.

The lowest-earning families will be able to tap into the child tax credit through monthly payments, but the bigger benefit level expires in 2025. At that point, it would fall to $1,000 without additional action in Congress.

The White House seeks to work with lawmakers to overhaul unemployment insurance and tie benefits to economic conditions, though the plan does not offer specifics. Sens. Ron Wyden and Michael Bennet recently unveiled a bill to permanently boost jobless benefits.

Administration officials are also envisioning 12 weeks of a national paid family and medical program with two-thirds wage replacement for most workers, a measure endorsed on Tuesday by Rep. Richard Neal, a powerful House Democrat.

But the Biden measure would be set up over a decade. Advocates are likely to pressure the president to accelerate the timeline since the US lacks a national leave program in stark contrast to other developed nations. The pandemic forced two million women out of the labor force as it devastated the economy, shuttering schools and pushing many of them to pick up the majority of childcare duties at home.

“This is a tremendous recognition of the centrality that paid leave plays in people’s lives and the gaps we have,” Vicki Shabo, a paid-leave expert at the think-tank New America, told Insider. “The country has invested almost nothing in paid leave up to this point.”

The Biden administration says it wants to fully pay for the programs with a series of tax hikes on the wealthiest Americans. Chief among them is strengthening the IRS’s ability to crack down on tax avoidance and ramp up the agency’s staffing levels. The White House projects raising $700 billion over ten years from the agency.

That step would be combined with raising the top marginal income tax rate to 39.6% from 37% and hitting investors earning above $1 million with a new tax on capital gains among others. The White House wants to avoid growing the national debt, which rose sharply as Congress signed off on $5 trillion in emergency COVID-19 relief spending in the last year.

Biden’s latest plan is unlikely to garner significant, if any, support from Republicans. The GOP quickly lined up against the first infrastructure plan from the White House, assailing it as a costly package that went far beyond only roads and bridges. However, the president’s spending plans are garnering strong majority support in public polling.

The American Family Plan’s path ahead in Congress remains unclear, and some Democrats say the infrastructure push could be split into two. That move may attract Republican votes on provisions popular in both parties, such as expanding broadband access.

At least some or the entire $4 trillion plan could be muscled through Congress under reconciliation, a procedural tactic allowing some budgetary bills to clear the Senate with a simple majority vote.

A group of Senate Republicans recently unveiled a $568 billion infrastructure plan largely directed at fixing roads and bridges last week. On Tuesday, Sen. Bill Cassidy of Louisiana announced he would soon unveil another bipartisan proposal that matched half of Biden’s spending.

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Democrats are pushing Biden at the last minute to put a permanently expanded child tax credit in his latest economic plan

Rosa Delauro
Rep. Rosa DeLauro (D-CT).

  • Democrats are doubling down on efforts for Biden to keep the expanded child tax credit.
  • “Kids don’t grow up in five years,” one House Democrat said.
  • Making CTC changes permanent could stumble in the Senate if Democrats decide to bypass the GOP.
  • See more stories on Insider’s business page.

As President Joe Biden’s $1.9 trillion emergency stimulus law was about to clear the House in late February, some Democrats started setting the stage for their next battle: Making the beefed-up child tax credit permanent.

Sen. Sherrod Brown told reporters that Democrats would press the Biden administration on the issue as soon as the stimulus law was signed, speaking as part of a group of other Democratic lawmakers.

He later tweeted an image of the group on Twitter. It included Sens. Michael Bennet and Cory Booker and Reps. Rosa DeLauro, Suzan DelBene, and Ritchie Torres. DeLauro recently dubbed the group “the CTC Six.”

The stimulus strengthened the child tax credit, increasing it to $3,600 per child under age 6 and $3,000 for kids between 6 and 17. Previously, the amount stood at $2,000, and families with little or no tax obligations could not tap into it.

Those Democrats are now ratcheting up the pressure on Biden as he gears up to unveil a massive new economic plan focused on families on Wednesday, particularly education and childcare. They are already warning against a temporary expansion until 2025, a five-year extension the White House is reportedly eyeing.

“Kids don’t grow up in five years. Parents need predictability to plan for their future over the long term,” DelBene told reporters on a Tuesday press call. “I asked the president in March if he supports permanently expanding the credit, and he said yes.”

The right-leaning Tax Foundation projects it would cost $1.6 trillion over a decade.

“Some have been concerned about the cost. I say the cost of inaction is too great,” DelBene said. “The president will propose his plan. Congress is going to write the bill.”

Democrats may move parts or the entirety of Biden’s $4 trillion infrastructure plan through reconciliation, a maneuver to guard legislation from the 60-vote threshold in the Senate and pave the way for a simple-majority vote. But it must comply with strict budgetary rules, such as barring any deficit increases after a decade.

“The issue really is budgetary score and permanence,” Zach Moller, a budget expert from the center-left group Third Way, told Insider.

Moller said making the child tax credit expansion permanent requires a finding a way to pay for it. “All of these things are competing for offsets. You can increase the deficit inside a 10-year window, outside that 10-year window or whatever budget window you want for the bill, you cannot increase the deficit.”

Meanwhile, other lawmakers said Republicans would fight to prevent an extension, or tie it to another conservative policy priority.

“We know that when this expires in five years … if we don’t do a permanent fix, we know in five years they will come after that and they will want huge corporate tax cuts, which they always do,” Brown told reporters.

Republicans largely oppose the child tax credit expansion, assailing it as a costly liberal priority. But some conservatives, Mitt Romney and Josh Hawley, have put out proposals over the last few months that include monthly cash benefits to families. Hawley’s plan was focused on married couples and it had a steep income requirement to qualify.

Still, many conservatives argue a program for monthly cash payments with no strings attached would foster dependency on the federal government.

“I still think its a bad idea to create a policy where large swaths of the population come to anticipate and look forward to the federal government sending them a check in the mail every month,” Scott Winship, director of poverty studies at the right-leaning American Enterprise Institute, said in an interview.

Democrats are gearing up to continue making their case to the Biden administration, focused on its benefits to families. Many believe that argument will be easier to make once the IRS begins distributing the checks in July.

“Just because it doesn’t make it in the plan, it doesn’t mean that door is completely closed,” a House Democratic aide told Insider.

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Sen. Josh Hawley wants to send $1,000 monthly checks to families with kids under 13, but provide less to single parents

Josh Hawley
Sen. Josh Hawley (R-MO).

  • Hawley rolled out a plan for a new “Parent Tax Credit” on Monday.
  • It would distribute $1,000 cash payments to married couples, and slash that in half for singles.
  • Experts said the plan contained design flaws that could hurt low-income workers during recessions.
  • See more stories on Insider’s business page.

Sen. Josh Hawley introduced a plan for a “Parent Tax Credit” on Monday aimed at offsetting the high cost of raising a child. It reflects a push among some conservatives to increase federal spending on families.

The proposal would establish a new, fully refundable tax credit of $6,000 for singles and $12,000 for couples, meaning families with minuscule or no tax obligations would qualify for a payment.

“Millions of working people want to start a family and would like to care for their children at home, but current policies do not respect these preferences,” Hawley said in a press release. “American families should be supported, no matter how they choose to care for their kids.”

To get the money, households must report earnings of $7,540 for the prior year, an amount equal to 20 hours of work each week at the $7.25 federal minimum wage. The earnings floor is the same regardless of whether a person is married or not, and families do not receive more cash if they have more than one child. Families would sign up for the plan through the IRS.

A spokesperson for Sen. Hawley told Insider the program would be in addition to the existing child tax credit. The proposal did not include a cost estimate.

The current CTC provides up to $2,000 per child, though it leaves out families with small tax bills. Democrats beefed it up for a year in President Joe Biden’s stimulus law to $3,600 per child aged 5 and under, and $3,000 for each kid between 6 and 17. Democrats want keep it permanently.

Other Republicans have put forward child allowance measures as well. Sen. Mitt Romney of Utah introduced a plan in February to distribute even larger cash payments to parents, paid for with the elimination of some safety net programs.

Patrick Brown, a policy fellow at the conservative-leaning Institute of Family Studies, told Insider that Hawley’s plan appeared to be an attempt at a middle ground between competing GOP childcare plans.

“They’re trying to find a way to say, ‘We want to require work but not screw too many low-income single parents, ” Brown said, though adding “the structure of the CTC still makes more sense to me.”

Seth Hanlon, a tax expert at the liberal-tilting Center for American Progress, told Insider he believed the plan had major design flaws, starting with its earnings threshold.

“That would seem strange if you get nothing if you’re $1 short of that,” Hanlon said. If the Hawley plan was in effect during the pandemic, he said, millions of parents who lost jobs and thus saw their annual incomes fall below $7,540 would have gotten their government aid yanked.

“The number of families benefitting in 2020/2021 would be much lower than other years, which highlights the backwardness,” Hanlon said. He also pointed out parents under the plan need Social Security numbers to qualify, a move that would exclude undocumented families from receiving aid.

Other Republicans, including Sens. Marco Rubio of Florida and Mike Lee of Utah, slammed the Romney plan as “welfare” after it was unveiled, torching its universal assistance to families as a step that discouraged work.

Brown said he thought the Hawley plan wouldn’t go far among Republicans. “But it does indicate there’s openness to actually not just talking the talk about being a pro-worker party, but actually being willing to invest in that,” he said.

Biden is set to introduce the second part of his infrastructure plan this week with an extension of the monthly child tax credit payments to 2025, The Washington Post reported. The IRS recently said it was on course to start monthly payments of the child tax credit in July.

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IRS chief says the agency on track to start monthly payments of the child tax credit July 1

Charles Rettig
Charles Rettig.

  • IRS chief Charles Rettig said the agency was on track to start monthly child tax credit payments on July 1.
  • The measure forms a key part of Biden’s recent stimulus law.
  • Democrats want to make the monthly direct payments permanent for parents.
  • See more stories on Insider’s business page.

IRS chief Charles Rettig told lawmakers on Tuesday that the agency was on course to start monthly payments of the child tax credit within a few months.

Asked whether the organization was ready to issue monthly checks on July 1, Rettig responded: “We are.”

He also added the agency was gearing up to roll out a new portal to allow parents to sign up and get the cash in advance. Currently, people receive it in a lump sum after filing their taxes every year.

“We will launch by July 1 with the absolute best product we are able to put together,” Rettig said at a Senate Finance Committee hearing. “We are trying to get it as user-friendly as possible, but we will launch by July 1.”

However, Rettig said the agency was ready to delay the portal’s rollout if any technical issues emerged that could lead to fraud. “If we are not prepared, we will not launch. We’re not going to risk our systems,” he said.

Rettig also said the IRS was grappling with 1,500 calls per second, and it’s still trying to bring onboard more employees to shrink their backlog of tax returns.

The one-year child tax credit measure was authorized as part of President Joe Biden’s stimulus law in mid-March. It will provide a $3,600-per-child benefit to parents with children age 5 and under through “periodic payments.” It will be $3,000 for each child between 6 and 17.

Democrats want to enable the distribution of monthly checks as well, and to make it permanent.

But many GOP lawmakers oppose it. Some are starting to raise concerns over possible waste and fraud, such as Rep. Kevin Brady of Texas, the ranking Republican on the House Ways and Means Committee, and Rep. Mike Kelly, another senior Republican.

“The new CTC and other provisions in ARP fail to learn from lessons of the past, are not targeted to pandemic relief, and risk the loss of billions of taxpayer dollars in fraudulent and improper payments,” the pair wrote in a letter sent Tuesday to the Biden administration.

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4 measures in the Biden stimulus law that provide extra cash for Americans

Joe Biden
President Joe Biden.

  • The $1.9 trillion Biden stimulus law was enacted last week.
  • Some elements could strengthen the nation’s social safety net in the wake of the pandemic.
  • Provisions include larger tax credits and enhanced unemployment insurance.
  • See more stories on Insider’s business page.

President Joe Biden signed a $1.9 trillion stimulus law last week, among the largest government rescue measures in American history.

Many of its provisions are directed at keeping individuals and families afloat as vaccinations become more widely available. Still, some aspects of the law may end up dramatically remaking the social safety net.

“This package sets a new and powerful precedent, especially for helping children and their families when they have limited or no income,” Indivar Dutta-Gupta, co-executive director of the Georgetown Center on Poverty and Inequality, said in a recent interview with Insider.

(1) $1,400 stimulus checks

The relief law includes a $1,400 direct payment for most taxpayers. Those will be distributed over the next few weeks, and some are already going out the door.

Individuals earning up to $75,000 and couples making up to $150,000 qualify for full checks. A married couple, then, can get $2,800. People can also collect an extra $1,400 per adult dependent, a change from the first two federal payouts.

People earning above those thresholds still qualify for a smaller direct payment. But eligibility is capped at individuals earning more than $80,000 and joint filers bringing in more than $160,000, meaning people and households making above those amounts are paid nothing.

(2) $300 federal unemployment benefits through Labor Day

The law provides $300 in weekly federal unemployment benefits until September 6. The measure renewed the government supplement to state unemployment checks for an extra six months.

It extends the length of various programs, such as the Pandemic Unemployment Assistance program for gig workers and the Pandemic Emergency Unemployment Compensation for long-term unemployed people. Both will expire in September without additional action in Congress.

(3) Expanded tax credits

The law also beefs up the child tax credit for millions of families. For the next year, it provides $3,600 per child aged 5 and under, and $3,000 for each kid aged 6 to 17.

Payments were designated as “periodic” to clear Senate procedural hurdles, but Democrats want to implement advance monthly checks to families of up to $300, although it’s unclear if the IRS can accommodate that request. Advance checks could start going out on July 1, the legislation indicates.

Other tax credits are augmented as well, such as the Earned Income Tax Credit. The law nearly triples the maximum amount a childless worker can receive, from $540 to $1500. The income cap for adults is also lifted from $16,000 to $21,000, a step widening its reach.

(4) Bigger SNAP benefits

The measure also aims to address hunger and food insecurity through the Supplemental Nutritional Assistance Program. It renews a 15% boost to SNAP benefits through September.

Put another way, the increase is equal to $27 more in SNAP benefits per person each month, or just over $100 monthly for a family of four, according to the Center on Budget and Policy Priorities.

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The $1.9 trillion stimulus bill would literally pay parents for having kids, and it could dramatically change America’s social safety net forever

family child tax credit mothers
The child tax credit, part of the stimulus bill, would give parents up to $3,600 per child.

Later this week, President Joe Biden is set to sign a $1.9 trillion stimulus bill into law that would inject a massive amount of federal cash into nearly every part of the economy. Much of that direct aid would temporarily benefit people as the nation’s economy slowly begins recovering from the pandemic.

But the legislation also plants the seeds for what could be a major transformation of the nation’s social safety net for the lowest-income Americans. The bill contains a one-year provision to dramatically expand the child tax credit, which would allow for parents to receive up to $3,600 per child.

Democrats aim to distribute this credit through monthly checks. Parents with children ages 5 and under could get a $300 payment per child, while those with kids between 6 and 16 could get $250 each month.

Some Democrats in the House and the Senate have said they will press to make it a permanent benefit program later this year. Biden told House Democrats last week he supported making the temporary beefed-up child tax credit permanent, though it’s unclear if that applies to monthly checks.

Democrats seem to be wagering that giving this credit to families for one year will be so popular that the case for making it permanent will be obvious.

There is some support on the right for this idea, too: Sen. Mitt Romney of Utah proposed a larger cash benefit for families last month.

Researchers at Columbia University projected the measure would form a key component in cutting the child poverty rate nearly in half, a statistic that Biden and other White House officials have cited repeatedly in recent days. The bill would also halve the poverty rate for Black and Hispanic children, according to the Columbia study.

If it does so, the policy may revolutionize the government’s relationship with families by offering a universal benefit to many with the potential to lift them out of poverty. That has been a key priority of Democrats for decades.

The relief package is “one of the most consequential and most progressive pieces of legislation in American history,” White House press secretary Jen Psaki said Monday.

‘Social Security for Children’

Democrats and progressives already see similarities between this child tax credit expansion and historic additions to the social safety net from the 1930s and ’60s during the presidencies of Franklin Roosevelt and Lyndon Johnson, respectively.

Rep. Rosa DeLauro of New York, the chair of the House Appropriations Committee, compared the initiative to “Social Security for children” in an interview with The New York Times – essentially another program directed at providing a basic income to a specific segment of Americans.

Chuck Marr, the director of federal tax policy at the liberal-leaning Center on Budget and Progressive Priorities, drew a comparison between the proposed program and Johnson’s push to curb poverty through his “Great Society” program. Johnson’s goal was, as he put it in his first State of the Union address, “not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.”

Marr told Insider if the child tax credit became permanent, “it becomes a landmark achievement.”

Current law prevents many of the poorest families from tapping into the child tax credit that the federal government offers. The maximum amount for families with small tax bills is $1,400, and nearly one-third of children live in families with earnings too low to qualify. The stimulus would make this tax credit fully refundable instead, meaning households could receive cash even if they had no tax obligations – but only for the duration of 2021.

If the child tax credit became a permanent fixture in the US economy, America would move closer to many Western European countries, including Germany and Sweden, which have a universal child benefit. Canada and Australia also have generous tax-free child benefit programs that phase out for top earners.

A permanent child tax credit along the lines of the stimulus would be on par with Luxembourg’s family allowance, which offers a standardized monthly amount of $313 per child (this increases slightly at ages 6 and 12). It would be higher than Denmark’s $732 quarterly allowance for children ages 0 to 2 and $151 monthly allowance for those ages 15 to 17.

The other countries that offer such programs typically have lower child poverty. Denmark, which spends 20.9% of its GDP on social programs, has a child poverty rate of 2.9%, according to the Economic Policy Institute.

As of 2019, the US child poverty rate was 14.4%.

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Democrats may be about to change the relationship of families to the government forever

family child tax credit mothers
The child tax credit, part of the stimulus bill, would give parents up to $3,600 per child.

Later this week, President Joe Biden is set to sign a $1.9 trillion stimulus bill into law that will inject a massive amount of federal cash into nearly every part of the economy. Much of that direct aid will temporarily benefit individuals as the nation’s economy slowly begins recovering from the pandemic.

But the legislation also plants the seeds for what could be a major transformation of the nation’s social safety net for the lowest-income Americans. The bill contains a one-year provision to dramatically expand the child tax credit, allowing for parents to receive up to $3,600 per child.

Democrats aim to distribute this credit through monthly checks. Parents with children aged 5 and under could get a $300 payment per child, while those with kids between 6 and 16 could get $250 each month.

Some Democrats in the House and the Senate have said they will press to make it a permanent benefit program later this year. Biden told House Democrats last week he supports making the temporary beefed-up child tax credit permanent, although it’s unclear if that applies to monthly checks.

Democrats seem to be wagering that giving this credit to families for one year will be so popular that the case for making it permanent will be obvious.

There is some support on the right for this idea, too: Sen. Mitt Romney of Utah proposed a larger cash benefit for families last month.

Researchers at Columbia University project the Biden measure would form a key component in cutting the child poverty rate nearly in half, a statistic that Biden and other White House officials have cited repeatedly in recent days. The bill would also halve the poverty rate for Black and Hispanic children, per the Columbia study.

If it does so, the policy may revolutionize the government’s relationship with families by offering a universal benefit to many with the potential to lift them out of poverty. That has been a key priority of Democrats for decades.

The relief package is “one of the most consequential and most progressive pieces of legislation in American history,” White House Press Secretary Jen Psaki said Monday.

‘Social Security for Children’

Democrats and progressives already see similarities between this child tax credit expansion and historic additions to the social safety net from the 1930s and 1960s, in the presidencies of Franklin Roosevelt and Lyndon Johnson, respectively.

Rep. Rosa DeLauro of New York, the chair of the House Appropriations Committee, compared the initiative to “Social Security for children” in an interview with The New York Times – essentially another program aimed at providing a basic income to a specific segment of Americans.

Chuck Marr, director of federal tax policy at the liberal-leaning Center on Budget and Progressive Priorities, drew a comparison between the proposed program and Johnson’s push to curb poverty through his “Great Society” program. Johnson’s aim was, as he put it in his first state of the union address, “not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.”

Marr told Insider that if the child tax credit becomes permanent, “it becomes a landmark achievement.”

Current law prevents many of the poorest families from tapping into the child tax credit that the federal government offers. The maximum amount for families with small tax bills is $1,400, and nearly a third of children live in families with earnings too low to qualify. The stimulus makes this tax credit fully refundable instead, meaning households could receive cash even if they have no tax obligations – but only does so for the duration of 2021.

If the child tax credit becomes a permanent fixture in the US economy, America would move closer to many Western European countries, including Germany and Sweden, which have a universal child benefit. Canada and Australia also have generous tax-free child benefit programs that phase out for top earners.

A permanent child tax credit along the lines of the stimulus would be on par with Luxembourg’s family allowance, which offers a standardized monthly amount of $313 per child (this increases slightly at ages 6 and 12). It would be higher than Denmark’s $732 quarterly allowance for children ages 0 to 2 and $151 monthly allowance for those ages 15 to 17.

The other countries that offer such programs typically have lower child poverty. Denmark, which spends 20.9% of its GDP on social programs, has a child poverty rate of 2.9%, per the The Economic Policy Institute.

As of 2019, the US child poverty rate was 14.4%.

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The White House says a ‘large number’ of Americans will receive $1,400 stimulus checks by the end of March

white house press secretary jen psaki
Jen Psaki, the White House press secretary.

  • The White House says many Americans can expect to get a $1,400 stimulus check this month.
  • Individuals earning below $75,000 annually can receive the full amount.
  • Under the last stimulus bill, the IRS distributed 147 million checks in two months.
  • Visit the Business section of Insider for more stories.

The White House said on Monday that many Americans could expect to get a $1,400 stimulus check within a few weeks.

The White House press secretary, Jen Psaki, said the Biden administration was aiming to distribute a significant number of checks this month.

“We expect a large number of Americans to receive relief by the end of the month,” she said, later adding that Treasury Secretary Janet Yellen was “focused like a laser” on getting checks out the door this month.

House Democrats are on course to approve a $1.9 trillion relief bill as soon as Tuesday. It contains direct payments in addition to other provisions such as $350 billion in aid to states, $300 weekly federal unemployment benefits, and a large expansion of the child tax credit.

Individuals earning up to $75,000 can receive the $1,400 check. Couples making up to $150,000 also qualify for the full amount.

Households above both those income thresholds could get a smaller amount, but eligibility is capped at individuals earning above $80,000 and couples making more than $160,000. Biden authorized lowering the eligibility thresholds last week after a push from moderate Senate Democrats.

Still, the vast majority of Americans would be eligible to get a direct payment. The left-leaning Institute on Taxation and Economic Policy estimated that the legislation would benefit 86% of adults and 85% of children.

It would be the third wave of one-time checks that the federal government has authorized during the pandemic. Congress early last year approved $1,200 stimulus checks, most of which the IRS sent within a month.

Lawmakers approved sending $600 relief checks as part of a pandemic aid package in December. The IRS sent 147 million payments to eligible taxpayers it had on file in less than two months.

People who did not receive a check in either round can file to get one in their 2020 tax return.

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