Oregon Sen. Ron Wyden is the co-author of a new bipartisan proposal, announced Tuesday, Jan. 16, to lift many children out of poverty, and to rescore popular but expired business tax breaks.

The deal, if it came about, would be a rare example of both parties, and the House and Senate, coming together on significant policy legislation after partisan squabbling has hobbled Congress throughout 2023.

“I don’t want to say a legislative miracle, but it almost is,” Sen. Sherrod Brown, D-Ohio, told The New York Times. “Six months ago, there was no chance of the child tax credit.”

Wyden is Oregon’s senior senator and chairs the Senate Finance Committee. He has been working on a child tax credit proposal since one that passed during the pandemic and subsequently ended. “Fifteen million kids from low-income families will be better off as a result of this plan,” he said in a joint public statement with the other co-author, Rep. Jason Smith, R-Missouri, who chairs the House joint Ways & Means budget-writing committee. “My goal remains to get this passed in time for families and businesses to benefit in this upcoming tax filing season, and I’m going to put out all the stops to get that done.”

According to the Senate Finance Committee, the bill — called The Tax Relief for American Families and Workers Act of 2024 — would bolster the child tax credit back up to pandemic-era levels, with the goal of helping bring families out of poverty. The bill would also create tax breaks for certain businesses, provide money for disaster relief, address low-income housing and address “fraud and waste by ending the Employee Retention Tax Credit program,” according to a release from the Senate Finance Committee.

“Given today’s miserable political climate,” Wyden said, “it’s a big deal to have this opportunity to pass pro-family policy that helps so many kids get ahead.”

The child tax credit

The bipartisan plan would:

• Expand access to the existing child tax credit, with phased increases to the refundable portion of the child tax credit for 2023, 2024 and 2025.

• Eliminate an existing penalty for larger families, which would make the credit apply fairly to families with multiple children.

• Offer flexibility for taxpayers to use either their current- or prior-year income to calculate the child tax credit in 2024 or 2025, which ever works better for them.

ªAdjust the tax credit to keep up with inflation starting in 2024.

The provisions resemble the child tax enacted during the pandemic. That measure cut child poverty rates nearly in half in 2021 and cost an estimated $105 billion. It lapsed in 2022.

Other elements

To get bipartisan support for the measure, the co-writers added Republican-favored incentives to help businesses. They include research-and-development expensing for businesses of all sizes; interest deductibility for businesses to meet payroll; 100% expensing for investments in machines, equipment and vehicles; and the removal of a “double taxation that exists for businesses and workers with a footprint in both the United States and Taiwan.”

“By incentivizing R&D, this plan is also going to promote innovation and help sharpen our economic competitiveness with China and the rest of the world,” Wyden said.

The measure addresses how small businesses react to natural disasters, with investments that can be immediately written off after a disaster; a lessening of red tape; and disaster relief for families.

The measure also addresses the supply of low-income housing — a crisis in every county in Oregon, but also nationwide. Housing was the No. 1 priority of Oregon Gov. Tina Kotek and legislative leaders in the 2023 session, and looks to be again when the 2024 Legislature gavels in on Feb. 5.

The measure proposes enhancing the current Low-Income Housing Tax Credit, a public-private partnership, with increased state allocations and a reduction of tax-exempt bond financing requirements.

“At a time when so many people in Oregon and all across America are getting clobbered by rising rents and home prices, the improvements this plan makes to the Low-Income Housing Tax Credit will build more than 200,000 new affordable housing units,” Wyden predicted.

Rep. Smith of Missouri said the measure includes, “…over $600 billion in proven, pro-growth, pro-America tax policies with key provisions that support over 21 million jobs.”

According to The New York Times, opposition to the measure already is rising: Some House Democrats argue that the measure does too little to expand the child tax credit, and some House Republicans say it does too much. Top tax-writers Rep. Richard Neal, D-Massachusetts, and Sen. Michael Crapo, R-Idaho, have not yet endorsed the package, according to The Times.