Earn

Joe Manchin reiterates that he won't support enhanced child tax credit without a work requirement

Share
Senator Joe Manchin outside his office in Washington, D.C., U.S., on Tuesday, Jan. 4, 2022.
Bloomberg | Bloomberg | Getty Images

As Democrats work to pass some form of President Joe Biden's Build Back Better legislation, Senator Joe Manchin, D-W.V., said Tuesday that he will not support an extension of the enhanced child tax credit (CTC), a key component of the bill, without the addition of a work requirement for parents.

Manchin told Business Insider that his position on the requirement has not changed for some time. Democrats need all 50 senators on board to pass their legislation via the reconciliation process, and the West Virginia senator has been a holdout in getting the social spending bill to Biden's desk.

Other Democrats, including Biden, oppose the requirement because it would leave out the neediest children.

In particular, it would potentially exclude grandparents who care for their grandchildren while living on a fixed income, as well as some parents who are students or who are disabled and cannot work.

In addition to a "firm work requirement," Manchin has also called for a household income cap of around $60,000 to receive the credit. Specifics on what exactly the work requirement would entail haven't been made public.

The requirement would mean that the poorest Americans would not receive the payments, though they are, ostensibly, who the enhanced credit was aimed to help, Jacob Goldin, an assistant professor at Stanford Law School who specializes in tax policy, previously told CNBC Make It.

In 2021, the credit was made fully refundable to help reduce child poverty in the U.S. That means even if parents had no income they could qualify for the enhanced payments. That component of the law alone accounted for more than 80% of the reduction in child poverty resulting from the enhanced CTC, according to the Center on Budget and Policy Priorities (CBPP).

Now, the CTC for 2022 has fallen back to $2,000 per dependent under 17, compared to between $3,000 to $3,600 for dependents under 18.

Democrats had aimed to pass Build Back Better by the end of 2021, but were stymied by Manchin's opposition. Investments in clean energy and other climate initiatives, money for affordable housing, paid leave, a Medicare expansion, a one-year extension of the CTC and more were all included in the bill.

Some parents still hope that the enhanced CTC will return this year. Manchin also said Tuesday that he has not had a conversation with the White House about Build Back Better since he announced he would not support it late last year.

Without the extension of the enhanced CTC, an estimated 9.9 million children could potentially fall back into poverty, according to an analysis from the Center on Budget and Policy Priorities (CBPP).

Sign up now: Get smarter about your money and career with our weekly newsletter

Don't miss:

VIDEO8:2708:27
How a 31-year-old U.S. Navy dentist making $157,000 a year spends her money