The full Senate will move toward a vote on a long-stalled bipartisan plan to expand the child tax credit and renew key business investment deductions.
The vote, which comes after months of uncertainty about the proposal, is expected not to succeed, but it will put Republicans on the record on the matter. Some Republicans in the Senate have fought to bat the legislation down for various reasons despite it sailing through the House with strong bipartisan support.
Senate Majority Leader Chuck Schumer (D-NY) will file cloture on the legislation tonight, and the first procedural vote will occur later this week, according to a Schumer spokesman.
The proposal is the result of lengthy talks between Ways and Means Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Ron Wyden (D-OR). It passed the House in a 357-70 vote, with members of both parties supporting the $78 billion legislation, H.R. 7024 , the Tax Relief for American Families and Workers Act.
The main tax legislation notably expands the child tax credit by changing the calculation of the credit on a per-child basis to make it more generous. It would also increase the maximum refundable amount per child from $1,600 to $1,800 in tax year 2023, $1,900 in 2024, and $2,000 in 2025, a change that will benefit lower-income families.
It also indexes the child tax credit to inflation, a provision long sought by child tax credit advocates.
The bipartisan bill renews a tax deduction for research and development costs for businesses, a measure that business groups have been lobbying for and the GOP has prioritized. Since the break expired, companies have had to amortize R&D expenses, meaning they faced a higher tax burden.
The agreement also temporarily pauses the phaseout of bonus depreciation. That was a provision in the 2017 Trump tax cuts that allowed companies to write off certain capital expenditures immediately instead of having those deductions written off over the “useful life” of the asset.
After easily passing through the Senate, the bill faced major roadblocks in the House. Wyden’s counterpart on the Finance Committee, Sen. Mike Crapo (R-ID), has pushed back on the legislation.
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Some GOP senators have objected to a provision in the legislation that would allow parents to rely on the prior year’s income to calculate the child tax credit for this year and next. Outside conservative groups have argued that the provision would lead some parents to quit the workforce in some years.
After it passed the House, Sen. Thom Tillis (R-NC), an influential member of the Finance Committee, told the Washington Examiner that in its current iteration, he was “going to fight to make sure every single Republican member is opposed to it.”
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