Manchin aims to restrict child tax credit eligibility in Build Back Better
Millions of American families did not receive a child tax credit (CTC) this month for the first time since July after Congress failed to pass the Build Back Better Act. The spending bill signed by President Joe Biden that would have extended the expanded CTC to 2022 is battling for support from moderate Sen. Joe Manchin, DW.Va.
Build Back Better needs the support of every Democrat in a tightly divided Senate. However, Manchin has previously said he will not support the bill unless lawmakers add a work requirement for CTC beneficiaries. This would mean that many families who received the expanded CTC in 2021 would no longer be eligible for benefits.
Read on to learn more about the future of the CTC in 2022, including ways for parents to cut spending when monthly payments run out. You can also visit Credible to compare quotes on a range of financial products such as debt consolidation loans and high-yield savings accounts for free, without harming your credit score.
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Manchin will not support CTC without work requirements
The American Rescue Plan, which Biden signed into law in March 2021, increased the maximum child tax credit from $2,000 to $3,600 per child ages 5 and under, and $3,000 for children ages 6 to 17.
According to a study by the Center on Budget and Policy Priorities (CBPP), extending Build Back Better’s improved child tax credit would potentially reduce child poverty by about 40%. As the Senate fights to pass the Build Back Better spending bill and the CTC expires, child poverty rates are expected to rise.
Congress struggles to pass Build Back Better without Manchin’s support. He has previously said he will not support the bill without adding a work requirement for CTC beneficiaries.
“I believe the government should be your best partner, but it shouldn’t be your provider,” Manchin told reporters in November. “We have a moral obligation to care for those who have physical or mental disabilities. But everyone else should be able to help and get involved, that’s my attitude.”
Manchin reiterated his stance on a work request earlier in January to Business Insider. But the Democratic Joint Economic Committee said that “imposing new restrictions would cut off vulnerable families, increase child poverty and deepen racial disparities, and hurt the children most in need of assistance.”
Some progressive lawmakers have also opposed requiring families to work to receive the CTC advance payments.
“Kids still need to eat — whether their parents work or not,” Rep. Pramila Jayapal, D-Wash., said on Twitter.
One way parents can prepare for unexpected expenses when CTC payments run out is to build a robust emergency fund that can cover 3 to 6 months of expenses. You can grow your savings faster by setting up a direct deposit from your paycheck into a high-yielding savings account that grows with interest. On Credible you can compare interest rates for high yield savings accounts.
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3 ways parents can cut spending when CTC expires
With Build Back Better stalled in the Senate, many families who received the monthly child tax credit payments in 2021 are having to find alternative ways to get by without this added benefit. Here are some ways parents can save money when CTC payments run out:
- Take advantage of current state benefits
- Find ways to reduce housing benefit payments
- Pay off debts with high interest rates
Read more about each strategy in the following sections.
1. Take advantage of current government benefits
In addition to the child tax credit, there are several federal programs aimed at helping low-income families who need financial assistance:
Contact your local Department of Human Services to see if you qualify for any of these programs and apply for benefits.
2. Find ways to reduce housing benefit payments
Housing costs make up a significant part of a family’s household budget. If you are a homeowner it may be possible to reduce Refinance your monthly mortgage payment at a lower interest rate.
According to Freddie Mac, mortgage rates will hit all-time lows in 2021. Though they’ve risen slightly since then, some homeowners may still be able to refinance at a lower rate. Refinancing your mortgage can help you save money on your monthly home payment or pay off your home loan faster.
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3. Pay off high-interest debt
Revolving credit card debt can take a toll on your personal finances, especially if you’re only making the minimum payments on your credit card balance. other high-interest debt, like payday loans can trap consumers in a cycle of expensive debt that is difficult to repay.
If you’re struggling with unmanageable debt, you might consider seeking help from a nonprofit credit counseling agency. A credit counselor can provide financial education, help you create a budget, or put you on a structured debt management plan (DMP). They may also be able to help you negotiate the amount you owe or help you get a lower interest rate on your current debt.
Qualified consumers with good credit can also qualify to pay off their credit cards with a debt consolidation loan at a lower interest rate. This is a type of personal loan that you pay back in fixed monthly installments over a set period of time, usually a few years.
With personal loan rates currently at record lows, now might be a good time to consider a debt consolidation loan to save money on monthly debt payments. Visit Credible to compare debt consolidation loan interest rates for free without compromising your credit score so you can determine if this option is right for you.
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