The Senate just killed a plan to cut taxes for parents and small businesses, calling it ‘cash welfare’

Majority Leader Chuck Schumer, D-N.Y., dared Republicans to vote against the tax cut package before lawmakers headed home for the month. He said they would be voting against tax cuts for many low-income families and businesses.

But most Republicans opposed the measure on a 48-44 procedural vote that required support from 60 lawmakers to succeed. Republicans accused Democrats of engaging in election-year messaging rather than serious legislating.

Both parties are trying to spotlight issues they believe will play well with voters in November. Schumer put the onus on Republicans to block tax cuts that were sought by the business community and that would financially help an estimated 16 million families when fully in effect. He was also looking to counter assertions from Republican presidential nominee Donald Trump’s running mate, Sen. JD Vance of Ohio, that Democrats are “anti-family.”

“The question is, will Senate Republicans join us to give Americans a tax break or will they stand in the way?” Schumer said before the vote.

The roughly $79 billion package passed the House overwhelmingly in January by a 357-70 vote, but has stalled in the Senate. Republicans were calling for the bill to go through the Senate Finance Committee, in a process that would allow lawmakers to offer amendments to address their concerns, but that did not happen.

There were behind-the-scenes negotiations, but lawmakers from both parties accused the other of not being serious.

McConnell rejects ‘cash welfare’

The child tax credit is $2,000 per qualifying child. The bill aims to make the credit more fully available to low-income families by gradually making more of the credit refundable. Senate Republican leader Mitch McConnell of Kentucky said the changes amounted to “cash welfare instead of relief for working taxpayers.”

“I’m not so certain the American people are impressed by message votes,” McConnell said. “And I don’t think they’ll give out points for incomplete work.”

The bill was fashioned through negotiations by Rep. Jason Smith, R-Mo., chairman of the House Ways and Means Committee, and Sen. Ron Wyden, D-Ore., chairman of the Senate Finance Committee. It would restore full, immediate deductions that businesses can take for the purchase of new equipment and machinery, and for domestic research and development expenses.

The changes in the child tax credit would lift as many as 500,000 out of poverty when the proposal was fully in effect, according to the Center on Budget and Policy Priorities, a liberal think tank.

The bill would be paid for by speeding up the cutoff date by which companies could submit retroactive claims for employees they kept on the payrolls during the COVID-19 pandemic. The IRS has said a significant majority of retroactive claims are at a high risk of fraud.

With the bill seemingly lacking the support necessary to overcome procedural hurdles, Schumer had opted for months not to bring it up for a vote. But the election season presented an opportunity for Democrats to spotlight the issue — and Vance. Schumer even referenced “the junior senator from Ohio” when speaking on the Senate floor, leaving no doubt that Vance was part of their thinking in holding the vote.

Vance claimed in a Fox News interview that Vice President Kamala Harris, the leading candidate now to be the Democrats’ White House nominee, was calling for an end to the child tax credit. But the Biden administration led the effort to bolster the child tax credit during the pandemic and tried unsuccessfully to continue the expansion, which temporarily increased the credit to $3,000 a year, added 17-year-olds and boosted the amount to $3,600 for children under age 6.

Schumer called Vance’s claim “plain old nonsense” and said the 2021 expansion was one of the most significant achievements Democrats have had under the Biden-Harris administration.

Both parties vie for ‘pro-family’ label

Vance also suggested in 2021 that political leaders who did not have biological children “don’t really have a direct stake” in the country. He reaffirmed those remarks after clips of them resurfaced, saying this week on the SiriusXM radio program “The Megyn Kelly Show” that the Democratic Party had become “anti-family and anti-child.”

Wyden, meanwhile, said: “There’s always a lot of talk among Republicans about supporting families, competing with China, and cracking down on fraud in government programs, but they just rejected a bill that would accomplish all of that in one package.”

Democratic Sens. Sherrod Brown of Ohio and Bob Casey of Pennsylvania, both in competitive races this fall, spoke on the Senate floor in support of the bill. But Sen. John Cornyn, R-Texas, called Thursday’s action the latest in a series of “show votes” designed to fail but would provide Democrats “with a talking point or two on the campaign trail.”

South Dakota Sen. John Thune, the second-ranking Senate Republican, said there are good things in the legislation, but “if we’re in a position to do this next year, it will be a much stronger bill.”

Thune said it won’t be hard for Republicans to rebuff criticism that they were insufficiently supportive of tax relief for businesses and families.

“There are certain issues that voters instinctively know that Republicans are better on,” Thune said. “They may try to make that argument in a political ad, but I think it’ll be hard to sustain when most voters know that it was the Republicans in 2017 that cut taxes and that next year it will be Republicans who extend those tax cuts if we have the majority.”