Some conservatives are opposing the bipartisan child tax credit legislation by saying it doesn’t do enough to prevent illegal immigrants from receiving the benefit, presenting an obstacle to its passage in the House.
While there is broad support for the bill, some cracks have started to form. Rep. Scott Perry (R-PA), an influential member of the conservative Freedom Caucus, went as far as to say Friday that allowing illegal immigrants to receive the child tax credit “should be a red line” for lawmakers.
The legislation in question would broaden the child tax credit but would not change policy related to eligibility by immigrants. It maintains the status quo that Republicans agreed to as part of the 2017 Trump tax cuts, which Perry and other conservative members voted for.
As part of the 2017 legislation, Republicans added a requirement that families receiving the child tax credit must provide the Social Security numbers for their children. Illegal immigrants don’t have Social Security numbers issued by the government, so tying the credit to Social Security numbers was meant to restrict the benefit from illegal immigrants.
Nevertheless, parents are not required to have a Social Security number, although they must have an Individual Taxpayer Identification Number to claim the benefit for their children.
The proposed expansion keeps those existing requirements in place.
“It changes nothing. That’s why the language around it is so strange — that by criticizing this, it’s criticizing the Trump tax cuts,” Joshua McCabe, the director of social policy at the Niskanen Center, told the Washington Examiner.
Some on the Right, however, are saying that the new legislation should go further than existing law in ensuring that benefits do not flow to illegal immigrants. Steven Camarota, the director of research at the immigration-restrictionist Center for Immigration Studies, said illegal immigrants impose major costs on the Treasury through tax credits.
“It doesn’t address the billions of dollars flowing to illegal immigrants through these programs,” he told the Washington Examiner.
Ways and Means Committee Chairman Jason Smith (R-MO) on Friday defended the bipartisan proposal, which passed out of the committee in an overwhelming 40-3 with no Republican opposition, from the immigration barbs.
He said that the reforms in the bipartisan legislation “are pro-family policies that maintain the child tax credit structure of the Trump-era GOP tax reform.”
“It halts any push for monthly checks and provides no special loopholes for illegal immigrants. In fact, the plan still requires a Social Security number for children, which was added in the 2017 GOP tax reform,” Smith said.
Rep. Greg Murphy (R-NC), a member of the powerful tax-writing panel, pushed back on the immigration line of attack from some members of his caucus on Friday.
“I’m not sure really how this fits necessarily in immigration,” Murphy said during an interview with the Washington Examiner, noting that while he is a major proponent of stopping illegal immigration and wants the Trump-era “Remain in Mexico” policy to return, he doesn’t think the bipartisan legislation should be tied to the matter.
“This is really a separate issue. We don’t want to confound the issues here to create a problem,” Murphy said.
While the bill soared out of committee, its passage could be trickier in the broader House and Senate. If it can clear those hurdles, the White House has indicated that President Joe Biden would sign it into law.
The bill would bolster the child tax credit by changing the calculation of the credit on a per-child basis to make it more generous. It would also increase the maximum refundable amount per child to $1,800 in tax year 2023, $1,900 in 2024, and $2,000 in 2025.
Refundability is the ability for households with no tax liability to receive a check from the government. The new proposal raises the current $1,600 cap on the amount of the credit that is refundable. The change would most benefit lower-income families.
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The bill also renews a tax deduction for research and development costs for businesses, something that business groups have been lobbying for and the GOP has prioritized. Since the break expired, companies have had to amortize R&D expenses, meaning they faced a higher tax burden.
The agreement also temporarily pauses the phaseout of bonus depreciation. That was a provision in the 2017 Trump tax cuts that allowed companies to write off certain capital expenditures immediately instead of having those deductions written off over the “useful life” of the asset.
