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Grassley to introduce child tax-credit legislation

Focus on low-income families

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WASHINGTON (CNN) -- With Democrats complaining that low-income families were shortchanged in the latest round of tax cuts, Sen. Charles Grassley, R-Iowa, plans to introduce legislation this week to extend and expand the increase in the child tax credit.

"Some of us in Congress wanted more family tax relief in this package than what we ultimately passed," Grassley, the chairman of the Senate Finance Committee, said in a statement. Tough negotiations with the House, he said, meant that some provisions were stripped out.

Grassley's bill is intended to address complaints that several million low-income households gained little or nothing from the tax cut bill just signed into law. That bill boosted the child tax credit for most families from $600 to $1,000 through 2005, when the credit is scheduled to revert to the lower number.

But a provision that would have extended the child tax credit to families making between $10,500 and $26,626 was excluded from the final bill signed by President Bush.

Democrats have hammered away at Republicans and the White House, saying the bill signed into law favors the wealthy.

Grassley's proposal would make the higher child credit permanent and speed up the benefits of the larger child tax credit to families with incomes ranging from $10,500 to $26,600, the statement from the Senate Finance Committee said. He called on Democrats to support his legislation.

According to the Grassley statement, the cost of extending the child tax credit to low-income families starting this year would be about $3.5 billion over 10 years.

Congressional numbers crunchers said the cost of making the entire provision permanent would be $93 billion through 2010.

Grassley's proposal also seeks to simplify the definition of a child for tax purposes. He said there are different eligibility tests for child-related benefits, leaving taxpayers confused.

Grassley said coming up with a uniform definition of a child would mean that more families could take advantage of child-related tax benefits.

Grassley, sources said, plans to introduce his bill on the Senate floor Tuesday, and committee sources predicted it would be well received on both sides of the aisle and both sides of the Capitol.

Separately, Sens. Blanche Lincoln, D-Arkansas, and Olympia Snowe, R-Maine, introduced a similar, but smaller bill Monday. It would restore the child tax credit for families in the $10,500 to $26,625 income bracket. Their bill does not include the other provisions in the Grassley measure.

"The low- and middle-income working families who were cut out of this tax bill at the last minute are the same people who need the most help in this sluggish economy," Lincoln said in a statement.

-- CNN's Louise Schiavone contributed to this report.

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