
As the ink dries on the Inflation Reduction Act — the landmark federal law that tackles climate change, drug pricing, health insurance, and tax enforcement — advocates for the expanded child tax credit have been quietly mourning their loss.
The expansion, passed as part of President Joe Biden’s pandemic relief program, delivered hundreds of dollars into parents’ bank accounts every month in 2021, ultimately helping 65 million children and keeping 3.7 million of them out of poverty. A year ago, the expanded CTC was heralded as one of the most significant policy achievements of the Biden era, so important to the broader Build Back Better negotiations that House Speaker Nancy Pelosi described its upcoming expiration as “really important leverage” for getting the rest of their agenda through.
It wasn’t enough. By January 2022, it was clear that any attempt to pass Biden’s agenda would likely exclude the child tax credit due to irreconcilable differences between West Virginia Sen. Joe Manchin and his Democratic colleagues over whether tax credit recipients should be required to work. When the Inflation Reduction Act passed last month, it didn’t include the CTC.
Now advocates for the CTC say they’re looking ahead to next steps. The first opportunity for new legislation could come at the end of the year, when Congress negotiates extensions on expiring business tax breaks. Advocates are also looking at new administrative solutions at the IRS, and thinking more seriously about state-level reform, amid state budget surpluses and new research detailing just how much families benefited from the now-expired expanded federal credit.