There are ways to address Manchin's BBB complaints

Can Biden compromise on the credit in a way that satisfies Manchin’s stated concerns but still reduces child poverty? Yes, and it’s simple.

I neglected to mention a key element of Build Back Better’s treatment of the child tax credit. While the House bill extends Biden’s higher per child amounts for just one year, it makes the benefit’s full refundability permanent. As the Jain Family Institute has calculated, the expanded child tax credit lifts 4 million children out of poverty, but if we fall back to the Trump amount of $2,000 per child while keeping Biden’s full refundability, we still lift 2 million children out of poverty. And we do it at far less cost: instead of $100 billion a year, just $17 billion.

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Spending $17 billion instead of $100 billion addresses another one of Manchin’s big concerns: inflation. Government spending not offset by taxes can contribute to inflation. While Biden stresses that Build Back Better doesn’t increase the deficit, that’s only true when calculating the 10-year cost (and when you incorporate the White House’s estimated revenue from aggressive tax collection). For 2022, the CBO estimates $155 billion in deficit spending, which will rub you the wrong way if, like Manchin, you are worried about high inflation continuing next year.

About $100 billion of that $155 billion in Build Back Better’s 2022 deficit spending comes from the expanded child tax credit. But if we don’t extend Biden’s higher amounts, and only extend full refundability, we cut the amount of Build Back Better’s 2022 deficit spending by more than half.

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