Child Tax Credit Leaves Many Female Parents Behind

(WOMENSENEWS)–The U.S. Treasury sent the last wave of child tax credit checks on August 8 to millions of middle- and upper-income American families, giving them extra money as they take family vacations or shop for back-to-school supplies. Unfortunately, for more than 7 million low-wage families–those with incomes between $10,500 and $26,625, who could use the help even more–the check was not in the mail.

Why? Because a bill to provide them with an increase in the child tax credit–passed by theSenate right after the $350 billion tax-cut package enacted in May–is stalled in Congress. The failure to pass this legislation hits women and children disproportionately hard.

The $350 billion tax cut package that Congress enacted in May accelerated many of the tax cuts that were enacted in 2001 but not scheduled to take effect until 2004 or later, including cuts in tax rates for families in the highest tax brackets and an increase in the child tax credit for families with children from $600 to $1,000 per child. This summer, many families received an advance payment of the child tax credit increase in the form of a check of up to $400 per child.

However, many low-income families will not benefit from this increase this year because Congress did not accelerate the provision to make more of the child tax credit refundable for 7 million low-wage families who pay little or no income tax but pay significant federal payroll and state sales taxes.

Heavy Impact on Women, Tax Breaks for Millionaires

A recent National Women’s Law Center analysis of the families left behind shows a disproportionate impact on women, including single mothers, stay-at-home moms and women of color. We found that two-thirds of the parents who are left behind are women and almost 4 million are single mothers. Over a million married couples with a stay-at-home mother are left behind. We also found that proportionately more women of color are left behind; 1 in 4 African American and Latina mothers, compared to 1 in 7 white mothers, did not receive a check.

The Senate version of the $350 billion tax package passed in May would have increased the refundable child tax credit for these families. However, this provision was intentionally and callously dropped at the last minute during conference negotiations, to make room for even bigger tax breaks for millionaires.

The total cost of increasing the child tax credit for these 7 million families is $3.5 billion: just 1 percent of the $350 billion total cost of the tax and budget bill. If the tax breaks for millionaires had been limited to an average of $88,000–instead of the $93,500 the average millionaire will receive this year from this massive giveaway–low-wage families would have been able to get the increased child tax credit they are being denied.

When the media focused attention on the exclusion of these low-wage families from the increased child tax credit, the Senate moved quickly and overwhelmingly passed bi-partisan legislation to fix this injustice. Although the price of the fix was to extend the child tax credit to more high-income families who had not previously been eligible for its benefits–pushing the cost of the bill to $10 billion–the bill was fully paid for; it would not add to the mountain of federal debt that the Administration’s tax cuts are piling on future generations. Moreover the Senate’s plan would take effect almost immediately so that newly eligible families would get their checks for the increased child tax credit this year. For those low-wage families who would benefit from increasing the refundable child tax credit, this would mean an extra $276 on average.

House Leaders up the Ante

What was the response of House Republican leaders like Tom DeLay? Majority Leader DeLay told The New York Times that the Senate legislation “ain’t gonna happen.” Congresswoman Sue Myrick, chair of the conservative Republican Study Committee said, “If we’re going to [pass child tax credits for low-wage families], we should get something in exchange.”

Instead of passing the Senate bill, the House Republican leadership crafted a package that included a $20 billion extension of the child tax credit to more high-income families and almost $60 billion in other tax cuts–an $82 billion solution to a $3.5 billion problem. Moreover, unlike the Senate’s approach, none of the House tax cuts was paid for–further exploding record deficits and jeopardizing funding for vital services for women and their families.

While House Republican leaders have been holding child tax credits for low-wage families hostage to another round of reckless tax cuts, President Bush has done little to move Congress. For a President who has pledged to “leave no child behind,” his failure to champion the child tax credit leads to only one conclusion. His priorities are millionaires and wealthy economic elites–not women and their families struggling to make ends meet.

Nancy Duff Campbell is co-president of the National Women’s Law Center in Washington, D.C.