As filing day nears, bipartisan tax bill stalled by Senate GOP
Sen. Ron Wyden, D-Ore., seen during a hearing Tuesday on Capitol Hill, helped broker a bipartisan package that would expand the child tax credit.
WASHINGTON — A bipartisan bill to expand the child tax credit and reinstate a set of business tax breaks has stalled in the Senate after winning overwhelming approval in the House, as Republicans balk at legislation they regard as too generous to low-income families.
The delay of the $78 billion tax package has imperiled the measure’s chances and reflects the challenges of passing any major legislation in an election year. Enacting a new tax law would give President Joe Biden and Democrats an achievement to campaign on, something that Republicans may prefer to avoid.
The House approved the measure in January by a vote of 357-72, and its backers had hoped to get it across the finish line around the start of tax-filing season at the end of that month. But with just over a month before the filing deadline, it has not moved in the Senate.
The package, which would be in effect through 2025, would expand the child tax credit and restore a set of tax breaks related to business research costs, capital expenses and interest. It would also include a boost to a tax credit encouraging the development of low-income housing, tax relief for disaster victims, and tax breaks for Taiwanese workers and companies operating in the United States.
The bill would be financed by reining in the employee retention tax credit, a pandemic-era program that has become a magnet for fraud. The package was brokered by the top two congressional tax writers, Rep. Jason Smith, R-Mo., chair of the Ways and Means Committee, and Sen. Ron Wyden, D-Ore., chair of the Finance Committee.
Senate Republicans have expressed a variety of concerns, fixating primarily on a “look-back” provision that would allow parents to use their previous year’s earnings to claim a larger child tax credit. Republicans argue the measure would weaken work incentives because it would allow parents who had little to no income in the current year to still claim a credit of up to $2,000 per child.
The GOP also has portrayed the mechanism for financing the bill as a sham, since the program that would be ended to pay for the tax provisions has cost the government far more than expected.
Senate Republicans have also complained that they were cut out of the deal, since it was reached and presented by Smith and Wyden without an endorsement from Sen. Michael Crapo of Idaho, the top Republican on the Finance Committee, who opposes it. The negotiators tried months ago to get Crapo on board, including by limiting the look-back provision in the child tax credit, but ultimately announced the bill without his backing.
Senate Republicans have said they want the chance to overhaul the bill in the Finance Committee.
Any major changes to the bill would most likely sap support among Democrats, who overwhelmingly back the package as is. And they would punt the bill back to the chaotic House, which has struggled for months to conduct regular legislative business.
TEL AVIV, Israel — The Israeli military said Wednesday it plans to direct a significant portion of the 1.4 million displaced Palestinians living in Gaza’s southernmost town of Rafah toward “humanitarian islands” in the center of the territory before its planned offensive in Rafah.
The fate of the people there has been a major area of concern of Israel’s allies — including the United States — and humanitarian groups, worried an offensive in the region densely crowded with so many displaced people would be a catastrophe. Rafah is also Gaza’s main entry point for desperately needed aid.
Israeli Prime Minister Benjamin Netanyahu has said a Rafah offensive is crucial to achieve Israel’s stated aim of destroying Hamas following the militia’s Oct. 7 attack in which about 1,200 people, mostly civilians, were killed and around 250 taken hostage and brought into Gaza. Israel’s invasion of Gaza has killed more than 31,000, according to Gaza health officials, left much of the enclave in ruins and displaced some 80% of Gaza’s 2.3 million people.
Israel’s chief military spokesman, Rear Adm. Daniel Hagari, said moving those in Rafah to the designated areas, which he said would be done in coordination with international actors, was a key part of the military’s preparations for its anticipated invasion of Rafah, where Israel says Hamas maintains four battalions it wants to destroy.
Rafah has swelled in recent months as Palestinians fled fighting in nearly every sector in Gaza. The town is covered in tents.
“We need to make sure that 1.4 million people or at least a significant amount
A young Palestinian mourns Wednesday upon the arrival of bodies after an Israeli strike in Rafah in southern Gaza. Wider fighting there is expected. of the 1.4 million will move. Where? To humanitarian islands that we will create with the international community,” Hagari told reporters at a briefing.
Hagari said those islands would provide temporary housing, food, water and other necessities to evacuated Palestinians. He did not say when Rafah’s evacuation would occur, nor when the Rafah offensive would begin, saying that Israel wanted the timing to be right operationally and to be coordinated with neighboring Egypt, which has said it does not want an influx of displaced Palestinians crossing its border.
The U.S. has been firm with Israel over its concerns about Rafah, and Secretary of State Antony Blinken said Wednesday that Washington had yet to receive Israel’s plans for civilians there.
“We need to see a plan that will get civilians out of harm’s way if there’s a military operation in Rafah,” he told reporters in Washington after convening a virtual ministerial meeting on Gaza aid with officials from the U.N., the EU, Britain. Cyprus, Qatar and the UAE. “We’ve not yet seen such a plan.”
At the start of the war, Israel directed evacuees to a slice of undeveloped land along Gaza’s Mediterranean coast that it designated as a safe zone. But aid groups said there were no real plans in place to receive large numbers of displaced there. Israeli strikes also targeted the area.
Meanwhile, fighting continued across Gaza. An Israeli strike Wednesday hit a food distribution site in southern Gaza run by UNRWA, the U.N. agency that works with Palestinian refugees, killing one staff member from the agency and wounding 22 others.
The death brings to 165 the number of workers for the agency killed during the past five months of fighting, according to UNRWA.
Gaza’s health authorities said a total of five people were killed in the strike on the yard of an UNRWA warehouse.
Hagari said the army was looking into the report.
Hagari said Wednesday that Israel plans to “flood the area” with aid, with plans to scale up the entry of goods from multiple points in northern Gaza, after half a dozen trucks delivered aid entered from the north Tuesday as part of a pilot program. He did not say how many more trucks were expected to enter and how often.
The U.S. and other countries also have been airdropping food into northern Gaza in recent weeks to help alleviate the crisis.