The Contrarian Review

Senate Passes Bill to Extend Child Credit to Low-Income Families

By DAVID FIRESTONE

WASHINGTON, June 5 - The Senate voted today to give an increased child tax credit to millions of low-income families who did not receive it in the new tax law, moving rapidly to quell an issue that had allowed Democrats to portray Republicans as brutish toward the poor.

The vote was 94 to 2. Both opponents, Don Nickles and James M. Inhofe, are Republicans from Oklahoma.

The bill, which would allow 6.5 million minimum-wage families to begin receiving checks of $400 per child, now goes to the House, where its prospects are uncertain. A senior House Republican official said today that House leaders would insist on aiding the families only as part of a much broader tax bill that could cost the Treasury about $100 billion.

Anticipating objections from the House, the bill approved by the Senate today added several additional provisions, favored by Republicans, to the original provision for minimum-wage families. The most significant would extend the full $400 increase in the child credit to married couples making between $110,000 and $150,000. The provision would allow some couples making up to $200,000 to receive a portion of the tax credit, depending on how many children they had.

Another provision would simplify the definition of a child in the tax code, making it easier for several thousand families to take advantage of child-based provisions, and a third would ensure that families of military personnel who served in the recent war in Iraq would be eligible for the tax credit.

The tax cuts in the bill add up to about $10 billion over 10 years, but because the bill raises Customs user fees by the same amount, the overall effect will be neutral to the Treasury. Getting a neutral bill was crucial to winning the support of many Senate Democrats, but it may anger House members who object to the higher fees.

After the deal was put together this afternoon, the House majority leader, Tom DeLay, Republican of Texas, seemed to soften his position on the issue, saying the House would consider any legislation sent over by the Senate.

But the senior House official, who spoke on condition of anonymity, said the House was unlikely to rubber-stamp the bill approved today. In addition to all of the provisions in the Senate bill, House leaders also want to make the increased child credit, now scheduled to expire after 2004, permanent for taxpayers eligible to receive it, the official said.

House leaders are also opposed to the increased customs fee, the official said, though that provision was crucial to getting support from Democrats and moderate Republicans who did not want to increase the deficit.

Senators from both parties urged the House not to delay their approval with ideological battles, in the hope that the 6.5 million families making between $10,500 and $26,625 would receive their refund checks next month, at the same time as 25 million middle-class families.

``I encourage our colleagues in the House to take this bill seriously, to move forward with it quickly,'' said Senator Blanche L. Lincoln, Democrat of Arkansas, who led the fight for the increased credits. ``This gives us an opportunity to reach out to these hard-working Americans and give them the same opportunity of relief from this tax bill that we're giving everybody else in this country.''

Senator Charles E. Grassley, Republican of Iowa, the chairman of the Finance Committee, said the purpose of the additions to today's bill was to encourage House Republicans to vote for it, and to dissuade Senate Republicans from objecting.

``I have no vote in the House, obviously,'' said Mr. Grassley, who has frequently been at odds with far more ideological tax writers in the House. ``What's going to make them accept it is whether or not they want this group of people, particularly people in the military, who are sacrificing their freedom for our freedom, to get the same benefit everybody else is going to get who has children in their family.''

Today's vote took place as pressure began to mount on Republicans to provide the tax credit to the 6.5 million families, who were deprived of the credit in last-minute negotiations over the new tax law signed by President Bush last week. A group of religious leaders announced plans today to hold a vigil across from the White House next week to demand tax benefits for low-income people, and one leader described the issue in stark moral terms.

``If biblical prophets like Amos and Isaiah had read this week's news about what happened to child tax credits for low-income families, they would surely be out screaming on the White House lawn about the justice of God,'' said Jim Wallis, an evangelical Christian who is the convener of Call to Renewal, a church organization that fights poverty.

Mr. Wallis, who has supported the White House effort to allow religious groups to compete for government grants, has met with administration officials over the last two years on that effort.