In a dramatic turn of events on Capitol Hill, a bill aimed at expanding the child tax credit and reinstating certain business tax breaks failed to advance in the Senate. The legislation, which had previously passed the House with overwhelming support, faced staunch opposition from Senate Republicans, who argued they could negotiate a better deal next year.
The Political Chessboard
Majority Leader Chuck Schumer, D-N.Y., challenged Republicans to vote against the tax cut package, emphasizing the potential benefits for low-income families and local businesses. Despite his efforts, the bill fell short of the 60 votes needed to advance, with a final tally of 48 in favor and 44 opposed. Notably, three Republicans—Sens. Josh Hawley of Missouri, Markwayne Mullin of Oklahoma, and Rick Scott of Florida—broke ranks to support the measure. However, Sens. Joe Manchin of West Virginia and Bernie Sanders of Vermont, both independents who caucus with Democrats, voted against it.
Both parties are keenly aware of the upcoming November elections and are using this legislative battle to highlight issues they believe will resonate with voters. Schumer accused Republicans of blocking tax cuts that would benefit an estimated 16 million families and countered claims from Republican presidential nominee Donald Trump’s running mate, Sen. JD Vance of Ohio, that Democrats are “anti-family.”
Business Tax Breaks and Child Tax Credit
The bill, crafted through negotiations between Rep. Jason Smith, R-Mo., and Sen. Ron Wyden, D-Ore., sought to restore full deductions for businesses purchasing new equipment and conducting domestic research and development. These tax breaks had lapsed as part of cost-containment measures under the 2017 tax bill approved during the Trump administration.
The child tax credit, currently set at $2,000 per qualifying child, was another focal point of the legislation. The bill aimed to make this credit more accessible to low-income families by gradually increasing its refundability. According to the Center on Budget and Policy Priorities, these changes could lift as many as 500,000 children out of poverty.
Behind-the-Scenes Negotiations
Despite behind-the-scenes negotiations, senators from both parties accused each other of not being serious about reaching a compromise. Senate Republican leader Mitch McConnell criticized the proposed changes to the child tax credit as “cash welfare instead of relief for working taxpayers.” He also dismissed the vote as a “message vote” that would not impress the American people.
Senate Democrats saw an opportunity to spotlight the issue during election season, with Schumer even referencing “the junior senator from Ohio” when speaking on the Senate floor. Vance had claimed in a Fox News interview that Vice President Kamala Harris was calling for an end to the child tax credit, a claim Schumer labeled as “plain old nonsense.”
As the legislative battle continues, both parties are gearing up for what promises to be a contentious election season. With Republicans eyeing a stronger position next year, the fate of these tax cuts remains uncertain.
