The House of Representatives has approved a major bipartisan tax deal, marking a temporary expansion of the child tax credit and the revival of several business tax breaks. The $78 billion tax bill received overwhelming support from both Democrats and Republicans, with 188 Democrats and 169 Republicans voting in favor. Despite earlier concerns raised by key factions on both sides, the bill passed in a 357-70 vote.
The Tax Relief for American Families and Workers Act, as it is known, not only aims to revive conservative pro-growth tax reform but also ends a wasteful COVID-era program, saving taxpayers billions of dollars. Speaker Mike Johnson, R-La., expressed his endorsement of the bill, stating that it is a crucial bipartisan legislation.
Following its approval in the House, the bill now moves to the Senate for further consideration. Sen. Mike Crapo, R-Idaho, the top Republican on the Senate Finance Committee, has previously referred to the bill as a “starting point” in tax talks. The House GOP leaders chose to put up the bill under suspension of the rules, bypassing a procedural hurdle called a rule vote. This raised the threshold for passage to two-thirds of the chamber, rather than a simple majority.
However, rule votes have been weaponized during the 118th Congress by GOP factions as a form of protest against how Republican leaders handle matters, even unrelated to the legislation being voted on. This strategy has caused some division within the party.
The tax deal includes a phased-in annual increase of the child tax credit’s maximum refundable amount, starting from $1,600 and reaching $2,000 by 2025. It also enhances child tax credit benefits for families with multiple children. Although the child tax credit was expanded during the COVID-19 pandemic, Democrats’ efforts to make those changes permanent failed in the last Congress. Work requirements for the child tax credit will remain in place, despite calls from the left to remove them. The bill also aims to boost American businesses’ ability to expense research and development costs conducted within the U.S., in order to incentivize new U.S. manufacturing.
Republican lawmakers, such as Rep. Randy Feenstra, R-Iowa, have highlighted the positive impacts of the bill on families and businesses. Feenstra believes the legislation will help build affordable homes in rural communities, expand the child tax credit, lower taxes for hardworking individuals, and support farms, businesses, and manufacturers in competing with China.
The Senate will now review the bill and continue the tax talks. House Ways and Means Chairman Jason Smith and Senate Finance Committee Chairman Ron Wyden played key roles in negotiating the tax bill. The outcome of the Senate’s decision will determine the future of this bipartisan legislation.
Elizabeth Elkind is a reporter for Digital, specializing in Congress and the intersection of Artificial Intelligence and politics. Her previous bylines can be found at the Daily Mail and CBS News. For the latest updates on the 2024 campaign trail, exclusive interviews, and more political content, subscribe to the newsletter and follow Elizabeth Elkind on Twitter at @liz_elkind.
