A permanent extension of the Democrats’ 2021 Child Tax Credit policy would cost taxpayers $1.4 trillion over the next decade, reduce economic growth, business investment, and labor force participation while resulting in higher inflation, according to a recent analysis by the Joint Committee on Taxation (JCT) released today by Ways and Means Republican Leader Rep. Kevin Brady (R-TX) and Ways and Means member and Republican Leader of the House Committee on Budget Rep. Jason Smith (R-MO). Recent reporting indicates Washington Democrats are planning to use the upcoming “Lame Duck” session of Congress to try once again to make permanent their 2021 Child Tax Credit policy that proved to be a key impediment to restoring America’s workforce in the wake of the pandemic.
Rep. Brady said:
“Unlike Republicans’ Child Tax Credit, which rewarded work and was doubled under the Tax Cuts and Jobs Act, Democrats’ partisan program fueled 40-year high inflation and made it harder for businesses to rehire their workers. Unfortunately, Democrats in Washington are pushing the very same failed policies that have created a cruel economy for working families. We know that if made permanent, Democrats’ partisan Child Tax Credit would result in between 300,000 to 1.5 million Americans exiting the workforce. The best thing we can do to help families is helping people return to work and making the Tax Cuts and Jobs Act reforms permanent.”
Rep. Smith said:
“Once again, Washington Democrats are ignoring the fallout from their partisan agenda and doubling down on failed policies. In their American Rescue Plan Act, Democrats spent $400 billion on policies that reduced private-sector employment. This included dismantling a long-standing, bipartisan Child Tax Credit policy by removing its work requirements and turning the credit into a monthly stipend. As a consequence, many Americans remained on the sidelines of the economy even as ‘Help Wanted’ signs were lining storefronts along Main Streets across the country. In 2021, under the Democrats’ alternative Child Tax Credit, just 1.6 million workers rejoined the labor force the entire year. By comparison, in 2022, when the Democrat policy expired and work requirements restored, 1.7 million Americans returned to the labor force in just the first two months. The evidence is clear: Democrat economic policies of the past two years have not only led to the highest spike in consumer prices in 40 years but have also contributed to the labor shortage that continues to plague America’s economy.”
A permanent extension of Democrats’ 2021 Child Tax Credit would worsen Biden’s cruel economy for Main Street and working families.
Based off analysis from the nonpartisan Joint Committee on Taxation (JCT), a permanent extension of Democrats’ partisan Child Tax Credit would:
- Cost taxpayers $1.4 trillion.
- Shrink the economy by $50 billion.
- Result in slashed wages, with a $19 billion loss of private-sector investment.
- Sideline 300,000 workers, pushing more Americans onto government dependence.
- Fuel Biden-Flation, with an increase in spending combined with a reduction in output and work.
Americans are suffering under Biden’s cruel economy.
- Inflation has increased 13.9 percent since President Biden took office.
- Real wages have decreased 4.4 percent since President Biden took office.
- Gas prices have risen 111 percent at their peak since President Biden took office.
- Average mortgage payment is 48 percent higher than one year ago.
- To combat the President’s inflation crisis, the Federal Reserve is raising interest rates, most recently by 75 basis points – the sixth rate increase since March. In total, the federal funds rate has risen by 3.75 percent, the fastest rate hike in 40 years and larger than the last 15 years combined.