Jan. 29 Federal Update: Child Tax Credit Expansion Advances in the House

The bipartisan Tax Relief for American Families and Workers Act, co-led by House Committee on Ways and Means Chair Jason Smith (R-Mo.) and Senate Finance Committee Chair Ron Wyden (D-Ore.), received overwhelming support (40-3) in a Republican-led committee vote, advancing it to a full House vote.

The plan includes temporary expansions of the child tax credit and revived tax breaks for businesses. The bill proposes increasing the child tax credit incrementally from the current $1,600 to $1,800 in 2023, $1,900 in 2024, and $2,000 in 2025, as well as boosting tax credits for low-income housing construction. The proposal, if enacted, could lift 400,000 children out of poverty in the first year and reduce poverty for an additional 3 million. By 2025, it is expected to move around half a million children out of poverty and reduce poverty for about 5 million other children.

To fund the deal, a COVID-19 tax break for businesses that retained employees during the pandemic would be terminated, saving an estimated $79 billion. Despite strong support for the legislation in committee, during the markup concerns were raised the child tax credit expansion still may not adequately meet the needs of low-income families. There is also resistance from some House members who demand full restoration of state and local tax deductions. The House is set to return on Jan. 29. The bill has yet to make it out of committee in the Senate. Nevertheless, there is optimism that Congress may pass the tax measure before the April 15 tax-filing deadline, providing families with the expanded credit for the 2023 tax year.

Federal Budget Deadline Extended

On Jan. 19, President Joe Biden signed a stopgap spending measure to keep federal departments and agencies open into March, averting a partial shutdown that was set to begin on Jan. 20.

With negotiations on budget allocations dragging on for weeks, however, lawmakers are already growing concerned about the impending funding deadlines in March. Sen. Patty Murray (D-Wash.) and Rep. Kay Granger (R-TX), the Appropriations Committee chairs, have yet to reach an agreement on top-level defense and nondefense spending figures for the 12 appropriations bills. Senate Appropriations Vice Chair Susan Collins (R-Me.) expressed worry about the ability to fund the government by the March 1 and March 8 deadlines. While Murray blamed the House for the delay, Sen. Shelley Moore Capito (R-W.Va.) criticized Senate Majority Leader Chuck Schumer (D-N.Y.) for not bringing more appropriations bills up for vote.

Simultaneously, negotiators are on the brink of finalizing a border and immigration deal tied to aid for Ukraine, Israel, and Taiwan. Senate GOP leaders, including Minority Leader Mitch McConnell (R-Ky.), aim to pass a comprehensive bill despite presidential candidate Donald Trump’s public opposition to the deal. The latest discussions involve a new authority to suspend asylum in some ports of entry when daily migrant crossings exceed a certain threshold, as well as expedited decisions on asylum cases and limited use of parole. Senate Majority Leader Chuck Schumer (D-N.Y.) and negotiators are working around the clock to finalize the deal. While challenges in crafting legislative language persist, Sen. Chris Murphy (D-Conn.) noted there is a 90-plus percent agreement on the text. If the bill passes, it will be the first major immigration bill to pass since the 1990s.

Historic Enrollment Numbers for ACA Marketplace

The Biden-Harris Administration announced 21.3 million people selected health insurance plans through the Affordable Care Act (ACA) Health Insurance Marketplace during the 2024 open enrollment period. This figure includes over five million new enrollees and 16 million coverage renewals. The enrollment period is ongoing in four states and Washington, D.C. until Jan. 31.

The Inflation Reduction Act (IRA) and the American Rescue Plan contributed to the affordability of Marketplace coverage. Due to the IRA, four out of five HealthCare.gov customers found 2024 plan coverage for $10 per month or less after subsidies.

The administration also allocated almost $100 million in Navigator Awards to organizations, supporting the hiring of staff trained to assist consumers in finding affordable and comprehensive health coverage. This initiative expanded access to affordable coverage for middle- and lower-income families, illustrated by a 4.2 million increase in enrollment from the previous year for individuals with a household income less than 250% of the federal poverty level. Marketplace coverage played a critical role for those transitioning from Medicaid or the Children’s Health Insurance Program (CHIP), with 2.4 million plan selections made by individuals who were previously enrolled in Medicaid or CHIP coverage.

HHS Releases New Guidelines for Foster Youth to Independence Program

The U.S. Department of Health and Human Services (HHS), in collaboration with the Administration for Children and Families (ACF) and the U.S. Department of Housing and Urban Development (HUD), has issued new guidelines to assist Runaway and Homeless Youth (RHY) grant recipients in implementing the Foster Youth to Independence (FYI) program. This program provides rental assistance and support services for young adults aged 18 to 24 who are transitioning out of foster care, facing homelessness, or at risk of homelessness. The guidance emphasizes the significance of housing stability for achieving self-sufficiency, especially during the critical transition to adulthood.

To access the FYI program, public child welfare agencies must refer eligible young adults to a local public housing authority. The guidance encourages RHY grant recipients to strengthen partnerships with child welfare agencies, and thereby gain information about the FYI program, facilitating connections with eligible young adults who may not be utilizing available resources. This collaboration is seen as crucial in addressing the unique needs of young people at risk of or experiencing homelessness.

Approximately 20,000 youth exit foster care each year, typically between ages 18 and 21. These individuals often encounter challenges in securing housing, leading to rates of homelessness higher than the general population. The guidance aims to equip communities with essential knowledge and tools to prevent and end youth homelessness.

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