FUNDING THE FAMILY

Fight or Flight? G.O.P. Split Over Tax Credits (DAVID FIRESTONE, 6/08/03, NY Times)

Representative Jan Schakowsky, an Illinois Democrat, said: "It seems as if we have hit a nerve here. We are supposedly talking about a bill that would make it easier to get checks, and the Republicans are clearly embarrassed that there are a whole lot of people, in fact 12 million children, whose families are not going to get checks."

That embarrassment, however, does not appear to have seeped into the chambers of House Republican leaders, where officials say they have no intention of rubber-stamping the Senate bill. House leaders say they will provide refunds of the $400-per-child increased credit to families making $10,500 to $26,625 only as part of a much broader tax-cut bill. They want to make the child credit permanent for 25 million wealthier families, as well, and to drop the Senate provision that would pay for the cut by raising customs fees.

As a result, the House bill could cost up to $100 billion over the next 10 years, while the Senate bill is projected to have no cost to the Treasury. The rival bills ensure many weeks of wrangling between the two chambers, which would probably prevent the 6.5 million families from getting refund checks at the same time as middle-income families.

The difference in approaches between House and Senate Republicans illustrates what Representative Rob Portman, Republican of Ohio, says is a split in the party's thinking on the subject. One group of Republicans, he said, thinks the party cannot win the contest over the political perception of the tax credit issue, and should just approve it and move on.

A second group, he said, feels strongly that Democrats have been misrepresenting the issue to the public, and wants at least to have a debate over the tax credits before the bill is passed. This group, he said, includes him and other House conservatives who are not comfortable with giving increased government checks to people who do not owe federal income tax.

"Probably, as in most things in Congress, the political pressure will win out," said Mr. Portman, chairman of the House Republican leadership group. "But I still don't think we've explained this enough. This is not a tax issue - it's a government transfer payment to people who do not pay income taxes."

People who would benefit from the Senate bill do not pay federal income taxes, though most pay Social Security and Medicare taxes. For many, the $400-per-child check they would receive under the bill would come on top of the existing $600 child credit and the earned income tax credit, which can be several thousand dollars a year depending on income and the number of children.

Although cash refunds to low-income working people who do not pay taxes were first approved under a Republican administration in 1975, and were increased again under the Bush administration in 2001, many Republicans now argue that further payments would be too much.

Were they not the stupid party, the GOP could infuriate the Left by embracing this credit and selling it as a corrective to declining fertility rates. After a couple weeks of Tom DeLay saying that it is necessary to aid people who actually reproduce in order to offset a variety of social pathologies--from abortion to homosexuality--the Democrats would come to hate their own credit. Posted by Orrin Judd at June 8, 2003 6:45 AM