A tale of two tax policies: What motivates the Senate

There is growing confidence that the Build Back Better bill might still arise Lugosi-like early in 2022 from Mitch McConnell’s (R-Ky.) legislative graveyard — but which provisions would be included in an effort to build back the Build Back Better better remains very uncertain.

One key feature rejected by Sen. Joe Manchin (D-W.Va.) is the extension of the child tax credit, especially for parents who are working at low-paying jobs or unable to work (who might arguably need it most desperately). That bias aligns him up with the most conservative House Republicans of a decade and a half ago who refused Speaker Nancy Pelosi’s (D-Calif.) 2008 effort to make the CTC refundable to low-income and non-working parents as part of the Bush stimulus.

Manchin reportedly cited a constituent’s complaint that her “crackhead” daughter supposedly used money from the CTC to buy drugs. On that basis, maybe we’d better take a look at how every beneficiary of black lung benefits spends his taxpayer-provided funds before giving any more money to that program, which benefits so many in the Mountain State. Oh, wait, the BBB bill actually strengthens the black lung program… without any such accountability.

Fortunately, we do not need to rely on Manchin’s anecdotal evidence about how lower income Americans are benefitting from the CTC passed by Democrats earlier this year. A new report from the Center for Translational Neuroscience at the University of Oregon reports that 55 percent of families receiving the CTC are using the payments to purchase the basic needs of their families — like food, housing, utilities, and telecommunications; 52 percent are paying off bills, including child care so they can go to work. One in five parents uses the CTC for school-related items like books and computers. Manchin claims he can’t explain BBB to those constituents, but the president of the United Mine Workers, who has a significant membership among Manchin’s constituents, seems to have figured it out. He is urging the senator to rethink his muddled opposition to a bill that would, among other things, provide support for industries to relocate to West Virginia and offer jobs to unemployed ex-miners.

Thanks to Manchin’s perfidy, over 300,000 children in West Virginia are going to lose CTC benefits until Congress figures out how to renew them.

Faced with termination of the benefits and the end-of-the-year holidays, the Senate opted for recessing.

One cannot help but compare this decision to the way Congress responded to the impending expiration of tax benefits in 2010. George Bush and congressional Republicans had passed those tax cuts early in his administration, but thanks to some parliamentary legerdemain, they were designed to expire on Dec. 31, 2010, to avoid violating the budget law. If they were allowed to expire, taxes would rise for almost everyone, a devastating blow in the midst of the Great Recession. Democrats in Congress and President Obama wanted to extend the Bush cuts only for the middle class, since the provisions benefitting the most affluent were costly and had no anti-recessionary benefit. Republicans refused, insisting the cuts must be extended for everyone or no one. The blackmail worked, and all of the cuts were extended for two years — when the negotiations again went down to the wire: On Dec. 31, 2012, the so-called “fiscal cliff,” Republicans (who then controlled the House) again threatened to allow all of the cuts to expire rather than extend them only for the hard-hit middle class. This time, the upper income cuts were terminated, but only after Obama capitulated to a Republican demand to eviscerate the estate tax that also benefits the wealthiest Americans. Pelosi’s simultaneous plea to also expand the Child Tax Credit was rejected.

Manchin voted for both of those bills, which showered hundreds of billions of dollars in tax benefits to the richest Americans. Few of those beneficiaries live in his state, where the poverty rate is 17.5 percent and the median income is just $49,000. In 2010, Manchin complained about the “stark choice we face … between doing nothing … or extending all the tax cuts,” but he voted to give the rich folks two more years of undeserved tax breaks. Two years later, Manchin decried “the flawed product of a broken process” but described the massive giveaway to the ultra-rich as “the best we can do at this late hour.” The unconscionable estate tax boondoggle, which he vowed he would fight to reverse beginning the next day, has remained in place for a decade; in fact, indexed for inflation, it has become an even more generous windfall for the ultra-wealthy.

The sheer unfairness of it all is hard to accept.

When confronting the expiration of tax benefits benefitting the wealthiest, Congress found the stamina and resolve to remain in session until midnight on New Year’s Eve to ensure the cuts for the affluent were extended, with Manchin’s support.

But when the legislation is targeted to the poorest families and children in the country — benefits that put food on the table, a roof over their heads and significantly reduce child poverty — Congress threw in the towel and left town two weeks early.

It’s sort of like giving those kids a lump of West Virginia coal in their stocking.

John A. Lawrence, Ph.D., former chief of staff to Speaker Nancy Pelosi, is the author of “The Class of ’74: Congress After Watergate and the Roots of Partisanship” and the forthcoming “Arc of Power: Politics and Policy in the Pelosi Era 2005-2010.” Follow him on Twittter @JohnALawrenceDC. He blogs as DOMEocracy.