NC Budget and Tax Center

Conservatives push for cuts to Child Tax Credit for immigrant families in exchange for an unemployment insurance extension

More than 1 million jobless workers were deserted by lawmakers who failed to extend the federal unemployment benefits program that expired in late December. This came three weeks after the Congressional Budget Office concluded that extending emergency unemployment compensation through the end of 2014 would positively impact economic growth and job creation in the short term. Despite this report, conservative members of the US Senate blocked efforts yesterday to extend unemployment insurance at a time when long-term unemployment is at record high-levels.

To no surprise, conservatives are insisting that the extension of benefits be paid for by cuts in other programs, including those that offer support to low-income and jobless families. In exchange for their vote, some conservative Senators want to bar immigrant families from claiming the Child Tax Credit—a measure known as the Ayotte Amendment. This tactic is misguided and counterproductive.

For starters, as mentioned above, the non-partisan Congressional Budget Office recently concluded that extending unemployment benefits would help the economy by shoring up workers’ purchasing power as they seek work during the slow economic recovery:

Combining the positive effects on the economy from higher aggregate demand with the negative effects from job searches that would be (on average) less intense, CBO estimates that extending the current EUC program and other related expiring provisions until the end of 2014 would increase inflation-adjusted GDP by 0.2 percent and increase full-time-equivalent employment by 0.2 million in the fourth quarter of 2014.

Further, the Ayotte Amendment would require taxpayers to have a Social Security number to file for the Child Tax Credit, which helps working families offset the cost of raising children (worth up to $1,000 per child).  Now, taxpayers can qualify by using an Individual Taxpayer Identification Number (ITIN)—a number assigned by the IRS for tax-filing purposes. An estimated 4 million US-citizen children live in a family that would be harmed by this policy change—meaning millions of vulnerable children could be pushed toward more extreme poverty as a result.

If lawmakers’ ultimate goal is a stronger economy, offsetting the budget impact of extending unemployment benefits by denying the child tax credit to immigrant parents of American children would be ineffective. Immigrants and their children are vital in terms of their contributions to our economy and communities. Pitting unemployed workers against immigrant families may win some conservative leaders political points for meanness but, as this case exposes, it is lousy policy.

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