WASHINGTON — Senior lawmakers in Congress announced a bipartisan deal Tuesday to expand the child tax credit and provide a series of tax breaks for businesses.
The agreement between House Ways & Means Chair Jason Smith, R-Mo., and Senate Finance Chair Ron Wyden, D-Ore., caps months of negotiating and pursuing common ground in the divided Congress.
"American families will benefit from this bipartisan agreement that provides greater tax relief, strengthens Main Street businesses, boosts our competitiveness with China, and creates jobs," Smith said in a statement. "We even provide disaster relief and cut red tape for small businesses, while ending a COVID-era program that's costing taxpayers billions in fraud."
The deal, details of which were reported earlier by NBC News, would enhance refundable child tax credits in an attempt to provide relief to financially struggling and multi-child families. It would also lift the tax credit's $1,600 refundable cap and adjust it for inflation.
"Fifteen million kids from low-income families will be better off as a result of this plan, and given today's miserable political climate, it's a big deal to have this opportunity to pass pro-family policy that helps so many kids get ahead," Wyden said in a statement.
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Democrats had demanded a larger child tax credit after an earlier version they passed for less than one year expired, causing child poverty to fall and then rise again after it lapsed. The new agreement would provide smaller benefits than the monthly payments under the American Rescue Plan.
And Republicans were motivated to revive some expired portions of the 2017 Trump tax cuts for businesses. The deal includes expensing for research and experimental costs, restoration of an earlier interest deduction, an expansion of small-business expensing and an extension of bonus depreciation, according to a section-by-section summary released by the Ways & Means Committee.
Wyden has said he hopes to pass the deal by the beginning of tax filing season, which is Jan. 29. That's not assured as Congress is juggling other priorities, most notably averting a government shutdown at the end of this week and completing its funding process by March. If it passes, it would be a rare success story of active legislating by a divided Congress that has otherwise been unproductive.
"My goal remains to get this passed in time for families and businesses to benefit in this upcoming tax filing season, and I'm going to pull out all the stops to get that done," Wyden said Tuesday.