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Child tax credit faces hurdles in House

Senate approved bill

From Ted Barrett
CNN Washington Bureau

House Majority Leader Tom DeLay
House Majority Leader Tom DeLay

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Responding to complaints that millions of low-income families lost out on a child tax credit, the Senate acts to correct it. CNN's Kate Snow has more (June 6)
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WASHINGTON (CNN) -- The expansion of a tax break for low-income families faces hurdles in the House, where GOP leaders want to tie the measure to another broader tax-cutting bill -- setting the stage for possibly tough negotiations between the House and Senate.

Thursday evening, the Senate passed 94-2 a bill to give those families an additional $400-per-child tax credit. But congressional aides say it may not be easy to get the bill through the House.

That's because House Republican leaders want to tie that Senate bill -- which carries a $10 billion price tag, fully paid for by an extension of customs fees -- to a much more expensive House proposal that's not likely to win Senate support, House Republican leadership aides said.

The Senate move came after it was revealed that a $350 billion tax-cutting bill signed into law last month by President Bush did not include that tax credit for low-income families. Democrats seized on that omission and claimed Republicans only wanted tax breaks for the wealthy, a charge rejected by the GOP.

In the Senate, Republicans, prodded by Democrats, moved quickly to extend the child tax credit.

But if the House passes a different version, the two measures must be reconciled before being sent to President Bush for his signature.

And House Democrats have made it clear they won't let the issue go away.

"We are determined to make this issue too hot for the Republicans to handle," House Democratic Leader Nancy Pelosi vowed Thursday. "They are just going to have to come through and they are going to have to do it soon."

start quoteWe are determined to make this issue too hot for the Republicans to handle.end quote
-- House Minority Leader Nancy Pelosi

But House GOP leaders are putting some pressure on Democrats by pushing for a new round of broader tax cuts -- not just the tax credit for children.

"I just remind the members of this House that we have now almost a trillion dollars left in the budget to do more tax relief for the American people, and you know what? We're coming back," said House Majority Leader Tom DeLay, R-Texas.

Sen. Kay Bailey Hutchinson, R-Texas, said Republicans did not intend to exclude the lower-income families but were forced to by constraints on the size of the original tax bill.

"I think that because we had that $350 billion cap, something happened in the conference that caused some of the people who were intended to be covered by the child tax credit for refundability were not. I don't think anyone intended for that to be the case and now I think we need to come in and correct that," she said.

Initially, House Republican leaders resisted making a fix to the first tax bill passed last month.

"You understand these people don't pay taxes," one GOP aide said.

start quoteI just remind the members of this House that we have now almost a trillion dollars left in the budget to do more tax relief for the American people, and you know what? We're coming back.end quote
-- House Majority Leader Tom DeLay

Sen. Olympia Snowe, R-Maine, chief sponsor of the Senate measure along with Democrat Blanche Lincoln of Arkansas, took great exception to this sentiment, which was expressed by a number of her Republican colleagues.

"They do pay taxes," she said. "They pay payroll taxes that are an enormous burden."

Both the proposed House bill and the Senate bill increase the child tax credit for families earning between $10,500 and $26,625 a year. Both also allow higher income married couples to claim a larger credit than what was allowed in the previous bill.

The main difference between the two bills is the House bill would make permanent the otherwise temporary changes to the child tax credit the president signed into law last month.

Senators urged their colleagues in the House to pass a similar bill in the next week so that millions of low-income families could also benefit from a rebate check this August.

Only Sens. Don Nickles and James Inhofe, both Oklahoma Republicans, voted against the bill.

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