Congressional Republicans finished rewriting their massive plan to overhaul the tax code on Friday, adding in a significant expansion of the Child Tax Credit aimed at boosting benefits for low-income families.
The change was added to meet demands from Sen. Marco Rubio (R-Fla.), who set off frenzied, last-minute negotiations when he threatened on Thursday to vote against the bill unless the credit was expanded.
Rep. Kristi L. Noem (R-S.D.), one of the Republicans tasked with ironing out a final bill, said the credit had been expanded, particularly for low-income and working-class families.
“I believe that we’re in a good spot and should be able to earn his support” she said of Rubio.
But a Rubio spokeswoman said the senator was reviewing the final measure to see if the expansion was enough for him to vote for the bill.
“We have not seen bill text, and until we see if the [amount of the expanded credit] is significantly higher, then our position remains the same,” she wrote in an email.
Republican negotiators have proposed to expand the Child Tax Credit from $1,000 per child to up to $2,000 per child, but in earlier versions of the plan, that full expansion would not be available to every family. Many lower-income families would only qualify for a $1,100 child tax credit.
Noem said Friday the plan’s credit for such families had been increased to $1,400, though it couldn’t be immediately learned how the expansion would work.
House Ways and Means Committee Chairman Kevin Brady (R-Texas) said negotiations were complete, but he would not say if Rubio had been placated.
“We ought to have every senator’s support on this tax reform bill,” Brady said.
Rubio, in a series of Twitter posts earlier Friday, said the credit needed to be “meaningfully higher” for families that earn between $20,000 and $50,000 a year.
Rubio voted for an earlier version of the tax bill that Republicans passed through the Senate by a 51 to 49 margin.
If Rubio were to oppose the final plan, it could imperil the legislation’s chances of becoming law.
Republicans hold 52 Senate seats and need support from 50 of their members to pass the bill, as Vice President Pence could be called on to break a tie.
Democrats unanimously oppose the plan, giving individual GOP members significant leverage if they threaten to vote against it.
Sen. Bob Corker (R-Tenn.) voted against the Senate version of the tax plan over its additions to the debt, and while he has said he’ll review the final plan, he is not expected to support it. Sen. Mike Lee (R-Utah) has joined Rubio in pushing for the expanded credit and said Thursday through a spokesman that he has not yet made a final decision on the final plan.
Further complicating matters, Sen. John McCain (R-Ariz.) is in the hospital recovering from cancer treatment. Sen. John Cornyn (R-Tex.) assured reporters on Thursday that McCain would return to vote on the tax package next week.
Sen. Thad Cochran (R-Miss.), another member who has recently been hospitalized, is in Washington and expects to vote for the final plan next week, a spokesman said.
A number of Republicans have opposed Rubio’s push to expand the child tax credit for people with lower incomes, saying many of those families do not pay federal income taxes and would end up receiving checks from the government.
But Rubio has held strong views on this issue for years, believing more must be done to help working families through the tax code.
His demands Thursday sent shock waves through Washington.
“People are really infuriated by it,” said Steve Moore, who was a top economic adviser to President Trump during the campaign. Moore said it remained unclear what Republicans would do if Rubio remains intractable.
Trump on Friday expressed optimism the bill would pass, telling reporters that the Child Tax Credit is “increasing on a daily basis.”
“The Democrats have done nothing on the child tax credit . . . we’re putting in a tremendous child tax credit,” Trump said.
Democrats have proposed numerous expansions of the Child Tax Credit and other programs aimed at low-income families, but many of them made a calculated decision two weeks ago to oppose Rubio’s first effort to expand the credit in the bill.
The Child Tax Credit is just one component of a sweeping tax overhaul that Republicans have moved through Congress swiftly since November. The package would slash corporate tax rates, temporarily lower taxes paid by many households, and eliminate a number of tax breaks.
As Republicans sought to secure votes in the final weeks, they’ve made a number of changes to their plan meant to expand benefits to businesses and wealthier Americans. But Democrats — and some Republicans — have complained there should have been more done to help the middle class and the working poor.
The total package is expected to cut roughly $1.5 trillion in taxes over 10 years. Expanding the Child Tax Credit to accommodate Rubio’s demands could force Republicans to scale back other tax reductions, as Senate rules limit the total amount the plan can add to the national debt.
Republicans’ final plan does not include a proposal to move up the bill’s expiration date for many of its tax cuts for individuals, according to Republicans involved in the talks. In the Senate version of the bill, many of the cuts were set to end in 2025, and it appears they’ll keep that timeline in the final plan, though Republicans earlier this week had considered moving up that expiration date to 2024.
Republicans have said they expected the tax breaks to be extended by a future Congress.
The new timeline would have given them more revenue to fund other changes they’ve made to the plan, but it would have further cut benefits for middle-class households in a tax overhaul whose benefits already skew toward corporations and the wealthy.
It could not immediately be learned how Republicans aim to offset the changes included in their final plan.
After Republicans said they’d completed final changes, House members began signing what is known as a “conference report.”
The House and Senate plan to vote on the final bill next week. If Congress approves it, Trump could then sign it into law.
— Reporter Heather Long contributed to this report.
