Washington —

Leaders of congressional tax committees announced a deal on Tuesday that would expand the child tax credit and extend some business tax credits, but its path to passage is not guaranteed. 

Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, and House Ways and Means Committee Chairman Jason Smith, a Missouri Republican, unveiled the agreement as a "common sense, bipartisan, bicameral tax framework that promotes the financial security of working families, boosts growth and American competitiveness, and strengthens communities and Main Street businesses."

"American families will benefit from this bipartisan agreement that provides greater tax relief, strengthens Main Street businesses, boosts our competitiveness with China, and creates jobs," Smith said in a statement.

The agreement would bolster the child tax credit, aiming to give relief to lower-income families. An enhanced version of the child tax credit was distributed in monthly increments during the pandemic and greatly reduced child poverty. Those monthly payments ended at the end of 2021, and Democrats have pushed to resurrect the assistance ever since.

Fifteen million children from low-income families are set to benefit from a new plan, according to Senator Wyden. In light of the challenging political climate, the passing of this pro-family policy is seen as a significant achievement. The goal is to have the legislation approved in time for families and businesses to reap the benefits during the upcoming tax season.

Currently, the maximum child tax credit is $1,600 per child. However, the proposed legislation aims to increase this amount to $1,800 in 2023, $1,900 in 2024, and $2,000 in 2025. Additionally, the limit will be adjusted in future years to account for inflation.

While the bill offers promising benefits, there are potential obstacles to its passage. With limited time to prevent a government shutdown and ongoing high-stress government funding negotiations, lawmakers may not prioritize this issue in the immediate future.

Furthermore, some Republicans may be hesitant to support the expansion of the child tax credit, as it could be seen as a significant victory for the Biden administration ahead of the presidential campaign. However, the bill also includes revived tax cuts for businesses, which may incentivize Republican support and expedite its passage.