Progressives are spelling out for the Democratic Party the disastrous implications that are likely to come with the government's possible failure to extend the enhanced child tax credit right as the White House plans to require tens of millions of people to restart their federal student loan payments—warning that the 2022 midterms could be "brutal" if the party imposes new financial burdens on working families.
With right-wing Sen. Joe Manchin (D-W.Va.) telling the White House Wednesday he wants to "zero out" the child tax credit (CTC) in the $1.75 trillion Build Back Better reconciliation package, millions of families with children may have received their final monthly payment of up to $300 per child this week.
The most recent payment hit bank accounts on Wednesday as the White House announced it would shelve negotiations over the social spending package in light of Manchin's objections.
In order to ensure families can receive another monthly check by January 15, the legislation would have to be approved by December 28, according to CNBC.
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Without the CTC, nearly 10 million children are at risk of falling into poverty, according to the Center on Budget and Policy Priorities, while another 27 million children will lose income that has been credited with helping families across the country afford rising grocery bills, utilities, school expenses, and other necessities.
According to Sen. Ron Wyden (D-Ore.), the Democrats are "looking at all procedural options available for a stand-alone short term extension of the CTC," which would require the votes of at least 10 Republican senators to pass with the legislative filibuster in place.
Without congressional action, wrote Eric Levitz at New York Wednesday, "shortly after Christmas—and in the midst of rising prices—just about every U.S. household with minor children will see its monthly income abruptly fall. It seems likely that this would be politically disadvantageous for the ruling party. It is certain that allowing the enhanced CTC to expire would increase child poverty."
According to an analysis by the Urban Institute, the continuation of the CTC—which is only included in the current version of the Build Back Better Act for one year—would slash child poverty by 40%.
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"Millions of people are depending on us," tweeted Rep. Pramila Jayapal (D-Wash.).
If the White House goes through with its current plans, weeks after receiving their final CTC payment tens of millions of Americans—including many who are raising children—will also be required for the first time in nearly two years to begin paying off their student loans again.
Congress imposed a moratorium on the payments in March 2020 and the pause has been extended several times by both the Trump and Biden administrations.
White House Press Secretary Jen Psaki made clear in a press briefing last week that the administration currently has no plans to extend more relief to student loan borrowers, whose monthly payments are nearly $400 on average.
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Psaki told reporters that the White House is "focused on starting repayment" as planned. As Common Dreams reported in October, the Education Department has been examining ways to avert "a surge in delinquencies" through a "return to repayment" program.
"If I were trying to prevent handing power back to the GOP for at least a decade I would simply not do this," journalist Kate Aronoff tweeted last week.
Sen. Elizabeth Warren (D-Mass.), who has been joined by Rep. Ayanna Pressley (D-Mass.) and Sen. Chuck Schumer (D-N.Y.) in urging the White House to cancel significant amounts of student debt—as the Higher Education Act permits—said Thursday that restarting monthly loan payments will be a "hard blow" to households across the country.
"The pause on federal student loan payments, interest, and collections has improved borrowers' economic security, allowing them to invest in their families, save for emergencies, and pay down other debt," wrote Warren, Pressley, and Schumer in a letter to the administration last week. "Restarting payments without canceling student debt will undermine these families' economic progress."
High school teacher and former UFC fighter Cory Gibson shared on social media how the Democrats' failure to prioritize working families in the coming weeks will affect his family, saying they would face a "$1,400 swing" in income over the course of a month and a half.
Some progressives preemptively denounced centrist Democrats and pundits who may blame the left for congressional losses in 2022 rather than connecting negative electoral outcomes to the party's failure to help working families.
"These are policy choices," said the Debt Collective, which advocates for student debt cancellation. "We don't have to choose this. All of this is 100% unnecessary and avoidable."
While many progressives have denounced Manchin for his part in objecting to the extension of the CTC, Levitz pointed out that the party leadership chose to cut the extension down to one year rather than making it permanent to satisfy Manchin's spending demands:
For months, the senator has suggested that he will not support new spending far in excess of $1.75 trillion, that he would like every cent of that spending to be offset with new taxes, and that cutting the bill's costs by phasing out programs Democrats intend to eventually make permanent is a gimmick that would not satisfy his demand on the spending cap. As Manchin told Politico back in September, "Once you start doing something, it becomes ingrained in it. We want to do it and do it right and finance it."
[...]
Even as Democratic leaders heeded Manchin's demands on the bill's top-line price and tax provisions, they ignored his consistent, emphatic opposition to budget gimmicks. Instead of paring down Biden's social agenda to two or three programs and then funding full permanent versions of those policies, House Democrats chose to retain nearly all of Biden's proposals and then cram them under a $1.75 trillion spending cap through a variety of means tests, phase-ins, and phaseouts."
"Right now, Democrats have a rare opportunity to permanently expand the American welfare state," Levitz continued. "Merely supplying permanent funding for the enhanced CTC would lift millions of U.S. children out of poverty a year, in perpetuity. Establishing universal prekindergarten or closing the Medicaid gap would be a similarly laudable achievement. By attempting to enact nearly all of Biden's social policies in miniature, however, Democrats risk permanently establishing none."
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