WASHINGTON – House Republican leaders, pressured by the Senate and the White House to include low-income families in new higher child tax credits (search), upped the ante by making high-income couples also eligible for them and providing new tax breaks for the armed forces.
The move leaves a gulf between the House and Senate that will be bridged quickly only if President Bush steps in, the Senate's top tax writer said Wednesday.
"If the president wants a bill before July the first, I think the answer's yes," said Senate Finance Committee Chairman Charles Grassley, R-Iowa, when asked if Bush's intervention would be necessary.
Quick passage would ensure that low-income families get a rebate worth up to $400 per child in September, after the government sends more than 25 million checks worth $13 billion to middle-income families in July and August. Extending the child credit to more low-income families would cost $3.5 billion.
The president's spokesman, Ari Fleischer, repeated Wednesday that Bush wants a quick resolution to the dustup over child tax credits. "What the president wants at the end of the day is to make sure that the Congress delivers, that action be taken, that child credits promised are child credits delivered," he said.
House Majority Leader Tom DeLay (search) said the House would vote Thursday on its bill, which would cost the Treasury $82 billion over the next 10 years. Passage there would send the politically charged measure back to the Senate, where lawmakers voted overwhelmingly last week for a smaller, $10 billion bill offering the tax break to low-income families for only three years.
"What we are interested in is real, solid tax relief for those that are paying taxes," the Texas Republican said Tuesday.
The White House earlier this week called for the House to act quickly on the Senate measure and avoid a prolonged effort so that families would get rebate checks of up to $400 per child before the end of summer.
"Ain't going to happen," DeLay said earlier Tuesday, referring to pleas from the White House, Democrats and some moderate Republicans that the House pass the Senate bill unchanged.
Both bills call for expanding the $1,000 child tax credit to more low-income families by allowing them to claim a refund worth up to 15 percent of their income over $10,500. That would allow 6.5 million families left out of the tax cut that President Bush signed on May 28 to join 25 million middle-income households getting the advance refunds.
Ways and Means Committee Chairman Bill Thomas, the House's top tax writer, said the House bill gives all families better benefits by extending the $1,000 child tax credit until 2010. Left unchanged, it will drop back to $700 in 2006.
Thomas, R-Calif., also took a jab at Sen. Blanche Lincoln, the Arkansas Democrat who pushed hardest for the bill in the Senate and who faces re-election next year. "If these people need help between now and the next election, they need it for the rest of the decade," Thomas said.
The House bill also increases the amount married couples can make before they start to lose the benefit from $110,000 to $150,000, beginning retroactively on Jan. 1.
And it wraps in a package of tax breaks for military personnel that bogged down earlier this year.
The White House said the president would sign the Senate's bill and urged the House not to let the legislation slow down. A spokesman for DeLay said the House leadership followed the president's orders by quickly scheduling debate on a bill expanding the child credit, even though it did not immediately take up the Senate's legislation.
"This is the decision of the House leadership," Thomas said.
The Senate's bill combined the child credit for low-income workers with a provision allowing married couples who make up to $150,000 to claim the full credit in 2010. Its $10 billion cost would be paid for by extending customs fees.
House Republican leaders will present the tax plan to rank-and-file members Wednesday. House Majority Whip Roy Blunt, R-Mo., said he expected both conservative and moderate lawmakers to support the tax cut.
One moderate, Rep. Michael Castle, R-Del., said he would like to support more tax cuts, but not at the expense of a bigger deficit. "It's a question of what we can afford," he said.
The uproar over the child tax credit started after Bush signed the $330 billion tax cut. That law will deliver advance refunds of up to $400 per child this summer to middle-income families. Families that earn between $10,500 and less than $27,000 were cut out of the payments because their tax level was too low to qualify.