The cost of the proposal — $33 billion for the CTC expansion plus another $33 billion for business breaks — are offset almost exactly by a $77 billion revenue bump achieved by canceling the employee retention tax credit (ERC).
Amendments to further boost the CTC by making it fully refundable and sending it out in monthly payments were proposed by Democrats but shot down by the committee.
Still, key Democrats, including ranking member Rep. Richard Neal (Mass.) and Rep. Bill Pascrell (N.J.), voted in favor of the plan. Only Reps. Lloyd Doggett (D-Texas), Linda Sánchez (D-Calif.) and Blake Moore (R-Utah) voted against it.
While the bill is revenue-neutral and provides $33 billion in deductions for research costs and other business expenses, Republicans have boasted much larger benefits will accrue to companies as a result of the deal.
“This legislation locks in over $600 billion in proven pro-growth, pro-America tax policies with key provisions that support over 21 million jobs,” Ways and Means Chair Jason Smith (R-Mo.) said in a statement released along with the announcement of the deal earlier this week.
The deal faces an uncertain future in the GOP-controlled House, where Speaker Mike Johnson (R-La.) has yet to weigh in on the measure.
Johnson is also facing pressure from conservative hardliners over government funding and border security ahead of a potential shutdown on March 1, which could complicate the bill’s path out of the House.
The Hill’s Tobias Burns has the details here.
