To pay for a $33 billion expansion in the child tax credit along with $33 billion in business deductions and other provisions, the bill cancels the employee retention tax credit (ERC), a pandemic-era tax break that supports businesses for not firing workers.
But Republicans say shifting spending from one tax credit to another doesn’t actually balance the cost of the bill in the long run.
“It’s kind of a phony pay-for,” said Sen. John Cornyn (R-Texas), “because the original tax credit done during the pandemic wasn’t paid for. So saying now we can use the un-paid-for tax credit to pay for this seems like smoke and mirrors.”
“I certainly would support the Finance Committee doing a hearing and markup, but I would not be willing to just rubber stamp it,” Cornyn added.
Republicans also want the expanded CTC to be linked to more
stringent work requirements, while Democrats argue that the tax bill is weighted too much toward businesses.
“It’s
a compromise, and some on our side think that the mixture of the tax benefit to the companies versus to the [child tax credit] isn’t to their liking,” Sen. Tim Kaine (D-Va.) said Thursday.
Kaine still described himself as “strongly inclined to support” the bill, but some of his progressive colleagues are not sold yet.
The Hill’s Tobias Burns and Aris Folley have more here.
