WASHINGTON – House Republican leaders unhappy with the Senate's endorsement of a bigger child tax credit for low-income families now find themselves under White House pressure to pass the bill quickly.
White House spokesman Ari Fleischer said Monday that President Bush wants to see the House pass a bill expanding the child tax credit (search) for low-income workers without letting it get "bogged down or slowed down."
Bush's signature last month on a$350 billion tax cut (search) and state aid package led Democrats to demand an expansion of the child tax credit to 6.5 million low-income families who otherwise would not see any added benefit.
The tax cut increased the child tax credit to $1,000 but left unchanged the eligibility rules that prevent families that earn more than $10,500 but less than $27,000 from claiming an additional refund. Under the existing rules, those families pay too little tax to claim the refund.
The Senate voted last week to make the credit available to those families by allowing them to claim a refund worth 15 percent of their income over $10,500.
As the package now stands, middle-income families will get a check later this summer worth up to $400 per child as an advance refund on the increased child tax credit.
Fleischer said Bush believes expanding the credit to low-income families will help nudge low-wage families into the middle class. Like the earned income tax credit, which offsets the payroll tax burden on low-income workers, the expanded child credit could help low-wage workers continue working and stay off welfare.
"It's really an assistance program to help low-income workers," Fleischer said.
Fleischer said that does not mean the president disagrees with House Republican leaders who say tax cuts should be tailored to those who pay income taxes. House GOP leaders have indicated they might join the Senate's bill with other tax items, such as eliminating tax laws that will cut the $1,000 child tax credit to $700 in 2006.
"To me, it's a little difficult to give tax relief to people who don't pay income taxes. It's a spending program," House Majority Leader Tom DeLay said last week.
Democrats argue that the low-income workers pay other federal taxes, and say that expanding tax benefits for those more likely to immediately spend the money will do more to stimulate the economy than the Republicans' tax cut. The two top Democrats in Congress wrote Bush on Monday, urging him to pressure the House to pass the bill.
"Putting money into the hands of working and military families will help increase demand in our economy, creating jobs and stimulating investment," wrote Senate Minority Leader Tom Daschle, D-S.D., and House Minority Leader Nancy Pelosi, D-Calif.
Senate Finance Committee Chairman Charles Grassley, R-Iowa, had said the Internal Revenue Service (search) could mail checks to low-income families at the same time as middle-income families if the House passed the legislation by June 23.
The Treasury Department (search) announced Monday that it could not mail both sets of checks without delaying the refunds already scheduled to be mailed in late July and August. If Congress expands the child credit to poor families, they will get their checks in September.