Republicans at odds over expanding child tax credit

WASHINGTON -- President Bush will have to step in and break a stalemate between House and Senate Republicans if low-income families are to share this summer in the child tax credit rebates being mailed out to middle-income households, the Senate's chief tax writer said Wednesday.

The Senate acted quickly last week and passed a small bill that broadens the credit for low-income families. House Republican leaders rejected the quick fix in favor of a bill of their own. It would cut taxes $82 billion over a decade by extending the $1,000 child credit through 2010 and making it available immediately to higher income married couples. House GOP leaders hoped to pass their own measure Thursday.

"If the president wants a bill before July the first, I think the answer's yes," Senate Finance Committee Charles Grassley, R-Iowa, said when asked if the president will have to intervene.

The Treasury Department will start sending rebates worth up to $400 per child to middle-income families in less than seven weeks. The money is an advance refund on a bigger child tax credit, increased from $600 to $1,000 in the tax cut that Bush signed last month.

Lawmakers and community groups pressing Congress to allow more low-income families to qualify for the checks even though they pay little or no income taxes said the conflict between the Senate and House Republicans threatens to stall the legislation.

No time for debate

"We don't have time to hold these working families hostage in a protracted debate about another large tax cut," said the Senate's two biggest advocates for the expanded credit, Democrat Blanche Lincoln of Arkansas and Republican Olympia Snowe of Maine.

House Minority Leader Nancy Pelosi, D-Calif., called the House GOP measure "a shameless ploy for their real goal -- delaying the bill and preventing passage of legislation to treat working families fairly."

The White House said Wednesday the House bill includes "some interesting ideas."

"But the president believes that at the end of the day, it's important to get something done. We need to get something done," said spokeswoman Claire Buchan.

Both the House and Senate bills allow more low-income families to get rebate checks by letting them claim a refund worth 15 percent of their income over $10,500. The tax cut enacted last month leaves 6.5 million low-wage workers who make between $10,500 and less than $27,000 without any added benefit.

House Republican leaders have said their most conservative members will not accept the Senate's bill because it does too little to advance the bigger tax cuts on the GOP agenda. They also oppose the $10 billion extension of customs fees the Senate included to offset the cost of expanded tax benefits.

Grassley said it would be difficult for the Senate to accept the House approach because moderates worried about tax cuts deepening record deficits will not vote for it. He said he would lose five of the Senate's 51 Republican votes while it would require 60 votes under budget rules to pass it. The Senate's Republican moderates forced Congress to scale back the president's initial $726 billion tax proposal to less than half.

More than half of the money in the House's bill extends the $1,000 child credit through the end of the decade. It is scheduled to drop back to $700 in 2006.

The House also opted to expand the child credit to higher income married couples.

Married couples who make more than $110,000 start to lose their credit, but the House would allow couples to make up to $150,000 before their benefits are reduced. Those families would also get rebates this summer.

Lawmakers on both sides of the Capitol still expect the differences to be resolved.

"This is all going to get worked out," said Sen. George Voinovich, R-Ohio, a leader in the effort limit the impact of any new tax cuts on the government's balance sheet. "I don't know how, but it will."

------

On the Net

Information on the House bill, H.R. 1308, can be found at: thomas.loc.gov