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Dems, GOP spar over tax cut provisionLow-income families won't receive $400 child credit
WASHINGTON (CNN) -- Democrats and Republicans are sparring over a provision in the new tax cut bill that will keep some low-income families from receiving a $400-per-child check this summer. Under the $350 billion tax cut measure, signed by President Bush Wednesday after grinding through several weeks of contentious debate on Capitol Hill, the child tax credit rises from $600 to $1,000, and the money will be sent to individual taxpayers starting in July. (Full story) While the credit is phased out for higher-income families, families with incomes between $10,500 and $26,625 a year also aren't eligible -- which has some Democrats crying foul. "It's unjust and doesn't make good economic sense," said Senate Minority Leader Tom Daschle, who called on Bush to join Senate Democrats in extending eligibility to families in this income bracket. "I hope the president will agree to reduce the tax breaks for the very wealthy in order to restore this tax relief for hardworking taxpayers who need it most," Daschle said in a statement. A provision extending the child tax credit to families making between $10,500 and $26,625, sponsored by Sen. Blanche Lincoln, D-Arkansas, was added to the tax cut bill after it came out of the Senate Finance Committee. However, it was removed when a conference committee reconciled differences between House and Senate versions of the bill. The provision was dropped to keep the final price tag of the tax cut package below $350 billion. White House spokesman Ari Fleischer said if Lincoln's provision had been included in the final bill, "the president would have signed it." "The conferees did make that decision," he said. "There are many decisions that were made that represented compromises in order to get something done." However, Fleischer said the White House was aware that Lincoln's proposal had been removed before the final vote. But Fleischer pointed to other tax cut provisions that reduce taxes on low-income Americans, noting that 3 million additional families will now pay no income tax at all. "What you always have to keep in mind in the administration of the child credit is, does the tax relief go to people who pay income taxes ... or does it go above and beyond the forgiving of all income taxes and you actually get a check back from the government for more than you ever owed in income taxes?" he said. The Center on Budget and Policy Priorities, a liberal group, estimated that eliminating Lincoln's proposal will affect 12 million children. 'We weren't happy, but it's nothing new'The tax credit was also not extended to families making less than $10,500 because they already don't pay federal income taxes. Lincoln spokesman Andrew Goesl said the tax bill was so complex that it was difficult to determine who would or would not qualify for the increased child tax credit at the time of the final vote. In the end, Lincoln voted against the tax cut package. But Senate Finance Committee Chairman Chuck Grassley, R-Iowa, took issue with the suggestion that the proposal was scuttled in last-minute maneuvering, noting that neither President Bush's original proposal, nor the version of the bill passed by the House, contained the provision. Several aides to Democratic members of the finance committee also said they knew the provision had been removed before the final vote on the tax bill. "We weren't happy, but it's nothing new," one of the aides said. Grassley also noted that most families in this income bracket also do not pay federal income taxes and benefit from other tax breaks geared to low-income families. A Senate Republican leadership aide said low-income families can qualify for the Earned Income Tax Credit, which pays up to $4,200 a year. "This is simply the standard Democrat class warfare argument that's almost as old as Bob Hope," the aide said. Hope turned 100 years old Thursday. CNN Correspondents Kate Snow and Suzanne Malveaux and Producer Trish Turner contributed to this report.
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