A Longshot Bipartisan Deal In Congress Could Unexpectedly Help Children

WASHINGTON — A longshot bipartisan tax deal under negotiation on Capitol Hill could deliver extra cash to parents in exchange for business subsidies.

The top tax lawmakers in the House and Senate — Rep. Jason Smith (R-Mo.) and Sen. Ron Wyden (D-Ore.) — have been working on a deal expanding the child tax credit alongside business tax breaks.

The deal isn’t final, and even if Wyden and Smith reach an understanding, it’s not clear that the rest of Congress would go along.

Still, an agreement would be a long-sought bipartisan breakthrough that could serve as a template for a future deal delivering on priorities for both parties.

“I’m trying to get the biggest tax cut possible for these working families and there are a host of ways in which you can do it,” Wyden told HuffPost on Tuesday, declining to offer any specifics about the policy.

Republicans expanded the child tax credit as part of their 2017 tax cut law, doubling the credit’s value to $2,000, expanding eligibility to high-earning households. The law required parents to earn at least $2,500 annually to receive even a portion of the credit.

The GOP tax law also boosted a business writeoff for capital expenses, but only temporarily, and now Republicans hope to revive it while also restoring a deduction for research and development that they watered down to help pay for the 2017 law.

Democrats, meanwhile, built on the expanded child tax credit in their 2021 American Rescue Plan, increasing its maximum value to $3,600 and getting rid of its earnings requirement, so that even parents who earned no money could receive refunds, and for the full amount rather than just a portion of the credit. The bill also directed the IRS to distribute the refunds as monthly