Bringing the Child Tax Credit Back to Life Is Too Costly

At the end of 2021, not quite a year into Joe Biden’s presidency, something unusual happened: Congress actually allowed a massive government program to expire. That program was the expanded child tax credit, which had been enacted as a temporary program under the American Rescue Plan (ARP), a roughly $2 trillion spending package passed exclusively with Democratic votes in March 2021.

A year after the expansion expired, however, Democrats began looking for ways to bring it back. The cost of doing that would be very high.

The ARP raised the maximum child tax credit from $2,000 to $3,600 per child for families making up to $150,000 a year. The one-year program made the credit fully refundable, meaning that people would qualify for it even if they owed no income taxes. That change expanded the benefit to millions of households that previously had earned too little to qualify.

The ARP also turned what had been an annual lump sum around tax season into a monthly payment that in many cases was directly deposited into parents’ bank accounts. In effect, the law set up a program of monthly checks, sent directly to the bank accounts of most families.

Although the program was initially designed as a one-year expansion, supporters hoped it would become permanent. As The New York Times reported in January 2022, the benefit “was never intended to be temporary,” and “many progressives hoped that the payments, once started, would