GOP Under Pressure to Deliver on Big Child Tax Credit Promises

Republicans made big promises on the campaign trail to boost the child tax credit. Now they’re under pressure to deliver.

The party wary of new social programs has been warmer to credits because they resemble tax cuts. And backers of boosting the child tax credit argue part of why the GOP won control of Washington in November was because it promised working- and middle-class families could keep more of their money.

“When you look at this and you realize that we are the party of parents, we’re the party of families, we’re the party of hard-working Americans,” said Sen. Katie Britt (R-Ala.), who is lead sponsor of a bill that would increase a separate tax credit for child care. “We have to make good on that.”

Vice President JD Vance made headlines during the 2024 campaign when he floated boosting the annual child tax credit to $5,000 per child, and GOP lawmakers in Congress have introduced several proposals to revamp it.

The 2017 GOP tax law doubled the credit to $2,000, and like much of that law, it reverts back at the end of this year without action.

Support for the credit comes from an unlikely coalition that includes liberal-leaning social safety net proponents alongside Republican-leaning family advocacy groups.

“We know an endless stream of priorities pull at your time and attention in a moment like this, but we argue that none is as pivotal for the long-term well-being of our nation as building a tax code that helps American families flourish,” over 30 anti-abortion groups said in a March 19 letter to GOP House and Senate leaders and tax-writing committee chairs.

But Republicans will face challenges in expanding the credit, given cost concerns. Renewing the 2017 tax law for a decade, before President Donald Trump’s new priorities, could cost an estimated $4.6 trillion.

Extending the tax law’s credit boost for a decade would cost close to $750 billion, according to the Congressional Budget Office.

The Conflicts

The child tax credit dates to the 1990s and has been made more generous over the years.

Most recently, Democrats in 2021 temporarily boosted it to $3,600 for children under 6 and $3,000 for older children. They also made it fully refundable, meaning low-income households were able to receive the full credit amount. The bigger credit was partly responsible for nearly halving child poverty that year, a US Census analysis found.

A bipartisan tax proposal last year would have adjusted the credit for inflation and expanded the refundable portion. The legislation died in the Senate, partly because Republicans led by now Senate Finance Chair Mike Crapo (R-Idaho) called the child credit provision too generous.

Republicans have pushed for limits. They lack consensus on the amount of the credit and whether low-income families with more than one child should be eligible for more credits sooner, among other items.

And some Republicans have been lukewarm to growing the amount of the credit, including for those with low incomes.

Expansion is a pricey proposition on a long list of GOP priorities, Crapo said during a Tuesday AARP Idaho telephone town hall, but noted has the greatest support from lawmakers.

“Right now there is a big battle over how much tax relief we can provide within the rules which we are operating,” he said.

Currently, $1,700 of the $2,000 credit per child is refundable and taxpayers must earn at least $2,500 to get the credit, according to the Congressional Research Service. Republicans want to keep some kind of income requirement for eligibility.

Crapo said on a recent podcast his conference is looking at ways to increase the credit for those in the lower and middle income brackets who rely on refundability or don’t earn enough to get the full credit.

“We’re looking at trying to increase the entire tax credit,” he said.

Proposals

On the House side, Rep. Blake Moore (R-Utah) proposed legislation this year that would boost the credit to $4,200 per young child, $3,000 for each school-aged child, and $2,800 for pregnant mothers.

“Flexibility is what we need more of in our tax code to empower individual decision-making,” Moore said.

Moore’s bill would require at least one parent to have a valid Social Security number to claim the credit—an idea that has been floated by other Republicans seeking to reduce the current credit’s cost. Currently, only the child must have one.

The bill comes with a big price tag. An American Enterprise Institute analysis found Moore’s proposed child tax credit expansion would increase the deficit by $1.9 trillion over 10 years using traditional scoring methods, though the legislation proposes other tax changes to offset the cost.

It’s unclear, however, whether Congress would be willing to pass all of Moore’s proposed offsets, such as making permanent the $10,000 cap on the state and local tax deduction.

Joshua McCabe, director of social policy at the Niskanen Center, a think tank that advocates for both free markets and government providing social insurance, said the Moore bill should attract lawmakers seeking to help families with rising prices and those with young or unborn children.

“This is the policy that a lot of social conservatives and pro-life folks are rallying around,” he said.