The Bush administration called on House Republicans yesterday to pass a bill to extend the child tax credit to 7 million families that don’t earn enough to pay income taxes.
“His advice to the House Republicans is to pass it, to send it to him so he can sign it,” said White House Press Secretary Ari Fleischer. “He understands they’re going to take a look at some other tax matters. That’s their prerogative. But he wants to make certain that this does not get slowed down, bogged down. He wants to sign it.”
Last week the Senate passed legislation that expands the $350 billion tax cut passed last week so that 7 million families, covering 12 million children, will be able to receive a $1,000-per-child tax credit, up from $600 now.
The credit would benefit 25 million families that have a tax liability but not the 7 million families that don’t pay income taxes.
“The president believes it’s a good idea to provide this assistance to them,” Mr. Fleischer said. “He thinks it’s good policy.”
Even as it was calling for swift action, though, part of the administration said a new bill could delay the effort to have checks go out beginning in July.
Adding 7 million taxpayers to the 25 million scheduled to receive the child tax credit could delay the batch of checks for a month, the Treasury Department said in a statement yesterday.
That contradicts the expectation of several lawmakers, including Sen. Charles E. Grassley, Iowa Republican and chairman of the Senate Finance Committee. He said last week that checks could still go out to all recipients beginning in July if the president signs the bill by the week of June 23.
But Treasury said that if Congress wants the 25 million checks to go out in July, the 7 million new checks would have to wait until mid-September.
House aides said yesterday they took Mr. Fleischer’s remarks to mean they have to pass something soon, not that they have to pass exactly what the Senate passed.
“We need to move with haste. We need to move quickly,” one aide said. “We did not take it to mean we need to pass the Senate bill.”
House Republican leaders will meet today to decide what to do, but aides said they want to expand the Senate bill to make the child tax credit permanent. Current law requires that the cuts be sunsetted.
The Senate bill also continues certain customs fees to cover the $10 billion price tag of its contents. But House Republicans have rejected offsetting revenue increases attached to tax cuts, arguing that the budget allows for as much as $1 trillion more in tax cuts during the next decade.
Democrats have seized upon the tax-credit issue as evidence the $350 billion tax-cut package signed into law last month, with its centerpiece cut of the capital-gains and dividend taxes, favored the wealthy.
House Minority Leader Nancy Pelosi, California Democrat, and Senate Minority Leader Tom Daschle, South Dakota Democrat, challenged the president yesterday to force House action.
“Your immediate intervention with House Republicans is required to ensure that the working and military families of 12 million children are made eligible for the child tax credit,” they said in a letter to the president.
The House is loath to accept the Senate’s version, though, with conservatives calling the bill a spending program rather than a tax cut, because none of the recipients earns enough to have an income-tax liability.
“In Alabama, if my colleagues talk to my constituents and say to them that they are going to pay back $2,000 to people who did not pay taxes, with their tax dollars because they have children, they are going to call that welfare. And that is exactly what it is,” said Rep. Spencer Bachus, Alabama Republican.