Should expanded child tax credit be made permanent? NC’s Senate candidates weigh in.

Payments from an expanded child tax credit hit Americans’ bank accounts Thursday, and Democrats, who passed the increase without support from Republicans earlier this year, are hoping to make it a campaign issue in 2022.

North Carolina has an open Senate seat in 2022 with the retirement of Republican Richard Burr.

Democrats, who currently control the White House, U.S. Senate and U.S. House, are also pushing to extend the increase for multiple years.

The News & Observer and Charlotte Observer reached out to the top candidates in the Republican and Democratic primaries for U.S. Senate about the expanded child tax credit and their position on making it permanent.

What is the expanded child tax credit?

The $1.9 trillion American Rescue Plan, touted as a COVID relief packages, passed Congress in March without the support of any Republicans in the House or Senate. Republican Rep. Ted Budd, who has the endorsement of former President Donald Trump, is the only candidate for Senate that voted on the legislation.

The law expanded the credit from $2,000 to $3,000 (for children 6-17) and $3,600 (for children under 6). It also advanced half of the credit in the form of monthly payments to parents. Those payments will be made from July to December this year on or around the 15th of each month.

The IRS estimates that more than 37 million families with 60 million children will benefit from the expanded credit. It could cut child poverty in half, according to a study from the Center on Poverty & Social Policy at Columbia University. In North Carolina, 1.1 million families, which includes 1.8 million children, will receive a check in July, according to the White House.

The full credit extends to couples making up to $150,000 and partial credit to couples making up to $400,000. Lower-income Americans, who might not have qualified for the credit previously because they didn’t make enough, receive the full credit.

The child tax credit was started in 1997 at $400 per child under 18 and increased to $500 the next year, according to the Tax Policy Center. It has undergone several changes throughout the years, rising to $1,000 in 2012 and $2,000 under President Donald Trump effective in 2018.

The Biden expansion is just a one-year increase.

The Trump expansion is scheduled to end in 2025, which would revert the credit back to $1,000. A budget proposed by Senate Democrats includes an extension of the expanded child tax credit at the Biden administration rates of $3,600 and $3,000.

Senate Democratic candidates respond

Democrat State Sen. Jeff Jackson said he often talks about the expanded child tax credit at his campaign events.

“It’s one of the most important legislative victories for working families — and children — living in poverty in my lifetime,” Jackson said in response to emailed questions. “Yes, I’d like to make it permanent.”

Former North Carolina Supreme Court Justice Cheri Beasley said she implemented a paid family leave policy for court employees as one of her first actions because “our economic policies need to support working families — and that is exactly what the Child Tax Credit does.”

“North Carolina needs a senator who will support this sort of tax cut that provides swift support for families who need it most and will help lift children out of poverty,” she said.

Democrat Erica Smith, who has pushed for universal basic income payments of $1,000 monthly to every American adult, said she would have voted for the American Rescue Plan and would back “other similarly bold” approaches to helping working families.

“An expanded child tax credit is good policy and good politics,” Smith said. “We need to be aggressive and relentless in our pursuit of ending poverty and lifting up the poor, the working poor, the working class, and the barely middle class. Making permanent the expanded child tax credit will do just that.”

Republican candidates’ position

The top Republicans in the race did not endorse making the expanded credit permanent.

Budd attacked the American Rescue Plan during debate over the legislation, calling it a “partisan wishlist for Democrats.”

“He opposed the Biden expansion because the Biden plan would turn a traditional tax credit into a monthly, un-targeted welfare program without firm income requirements,” said Jonathan Felts, a senior adviser to the Budd campaign.

Felts said Budd supported a targeted tax credit expansion in the 2017 Tax Cuts and Jobs Act. That law increased the tax credit from $1,000 to $2,000, but low-income families did not get the full increase and about 1 million undocumented children were cut off, according to the left-leaning Center on Budget and Policy Priorities.

“Depending on specific details, Ted might support a targeted expansion similar to what was championed by the Trump administration, but Ted is not supportive of making the Biden expansion permanent in its current form,” Felts said.

Former N.C. Gov. Pat McCrory’s campaign said he’d be “a champion for fiscal responsibility.” The campaign pointed to his experience in balancing the state budget — a state constitutional requirement — and cutting taxes.

“Issues like Child Tax Credits need to be addressed in a federal budget, where spending decisions should be made. And those spending decisions need to take into account that we are racking up trillions of dollars of debt that our grandchildren will have to repay,” McCrory’s campaign said in response to questions.

Former U.S. Rep. Mark Walker, who as chairman of the Republican Study Committee released proposed federal budgets, supports restructuring tax benefits from the earned income tax credit and the child tax credit into a new anti-poverty credit for low-income families that rewards them for work, his campaign said.

“Though well-intentioned, the child allowance created by President Biden further separates work incentives from welfare and will increase disincentives for Americans to go back to work as we try to boost our economy. If the child allowance was made permanent it would represent the second largest welfare expansion in American history,” Walker’s campaign said in an email response.

National Democrats intend to make the child tax credit an issue, pointing to it as a middle-class tax cut that no Republican supported. The Democratic National Committee, along with the party’s Senate and House committees, released a digital ad Thursday morning to tout their support for the credit.

For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at link.chtbl.com/underthedomenc or wherever you get your podcasts.

This story was originally published July 16, 2021 at 4:24 PM with the headline "Should expanded child tax credit be made permanent? NC’s Senate candidates weigh in.."

Brian Murphy

The News & Observer

Brian Murphy is the editor of NC Insider, a state government news service. He previously covered North Carolina’s congressional delegation and state issues from Washington, D.C. for The News & Observer, The Charlotte Observer and The Herald-Sun. He grew up in Cary and graduated from UNC-Chapel Hill. He previously worked for news organizations in Georgia, Idaho and Virginia. Reach him at bmurphy@ncinsider.com.