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What That Means for Monthly Child Tax Credit Payments

What That Means for Monthly Child Tax Credit Payments
Written by Publishing Team

This latest development is bad news for parents.

Many Americans have struggled tremendously in the context of the pandemic. And while the economy is, fortunately, in a better shape now than it was earlier this year, a lot of uncertainty still prevails.

Currently, cases of COVID-19 are rising nationally, and the emergence of the new omicron variant could lead to widespread restrictions hampering our economic recovery and hurting many people individually. Consider the fact that inflation has been rampant, and it’s easy to see why so many families are tired and struggling to make ends meet.

For months, families with children have been getting a lifeline in the form of monthly child tax credit payments. The credit, which was boosted for tax year 2021, is now capped at $3,600 for children under 6 and $3,000 for those ages 6 to 17.

President Biden is seeking to extend the boosted child tax credit through 2022 as part of his plan to build back better. So far, this spending bill has been approved in a House vote. But now it needs Senate approval to move forward. Unfortunately, the lack of support from a key lawmaker could destroy the bill’s chances of moving forward.

Senator Manchin is no

West Virginia Senator Joe Manchin has stated that he will not vote for the Rebuilding Better Act. That’s a problem, because Manchin is a Democratic senator, and his support is essential to moving the bill forward in a divided Senate.

To be clear, this news is not entirely out of the right field. Manchin has long expressed concern about the bill, but previously, Democratic lawmakers were confident they could get the West Virginia senator into the House. But based on Manchin’s recent statements, he seems unwilling to budge.

Bad news for cash-strapped Americans

If Biden’s spending bill isn’t approved — and soon — families who have been receiving monthly child tax credit payments won’t see one arrive in their bank accounts in January. This may force many families to default on their bills and land in serious debt.

So far, these monthly payments have helped lift millions of children out of poverty and have allowed many families to boost their finances. But if these payments are not sustained, much of the progress that has been made so far on the poverty front can be reversed.

Meanwhile, failure to pass the Rebuild Better Act may affect the US economy in general. Indeed, investment banking giant Goldman Sachs changed its economic forecast for the worse in the wake of Manchin’s apparent opposition to the bill. Failure to pass the spending scale could curb economic growth, Goldman says, and lead to major setbacks at a time when the United States cannot afford it.

Obviously, that doesn’t automatically mean the Build Back Better plan died in the water. But at this point, those who have received child tax credit payments are at least likely to see the income stream stop. This alone can have dire consequences.

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