Expanding the child tax credit was a Democratic dream come true -- but it could be on the chopping block

Ever since Democrats won two seats in Georgia in January giving the party a Senate majority, Democratic Sens. Cory Booker of New Jersey, Michael Bennet of Colorado and Sherrod Brown of Ohio had been lobbying the Biden transition team and then administration to expand the child tax credit and make it fully refundable to ensure the lowest income Americans would receive the benefit.

"From the time those guys won in Georgia, this was our main raison d'etre," Booker told CNN in an interview.

Now they are focused, along with Democratic Sen. Raphael Warnock of Georgia, on making sure that enhanced child tax credit and the new monthly payment distribution method are extended until 2025 and its full refundability is made permanent by including those items in their party's massive economic package currently being negotiated and crafted by congressional Democrats and the White House.

It's one of a number of priorities Democrats' are seeking to include in their economic package but their wish list -- that includes free pre-k for all 3- and 4-year-olds, paid family leave, two years of free community college, expansion of Medicare benefits, provisions targeting climate change and more -- is running into the reality that all Democrats are not on board with the current price tag.

Democrats had originally settled on a top line of $3.5 trillion but some Senate moderates including Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona have indicated they will not support a number that high. Democrats need all 50 senators on board to pass the legislation. As Democrats' work to find a topline number that is acceptable to all members, the jockeying has begun to see what may stay and what may go.

It's a reality President Joe Biden acknowledged during a recent White House meeting with a group of senators that included Booker.

"He was clear that maybe ... if there's 15 great things in this, we may have to settle for 10," Booker said. "He was very real about the compromises that may have to be made."

Created by the Democrats' $1.9 trillion coronavirus relief package in March, the enhanced credit provides families with up to $3,600 a year for each child up to age 6 and $3,000 for each one ages 6 to 17. Parents are receiving half the credit in monthly installments of up to $300 for each younger child and $250 for each older one, between July and December. They'll get the other half when they file their taxes in the spring.

The full beefed-up credit is available for heads of households earning up to $112,500 a year and joint filers making up to $150,000, after which it begins to phase out. For many families, the credit then plateaus at $2,000 per child and starts to phase out for single parents earning more than $200,000 or for married couples with incomes above $400,000.

More low-income parents are eligible for the child tax credit because the relief package made it fully refundable. It had been only partially refundable -- leaving more than 26 million children unable to get the full credit because their families' incomes were too low, according to Treasury Department estimates.

The changes are expected to lift millions of kids out of poverty and cut the child poverty rate by more than 40% in 2021, experts say.

The expansion is estimated to cost about $110 billion for the year. The House Ways and Means measure would cost about $556 billion, according to the Committee for a Responsible Federal Budget.

'There's nothing bigger than this'

Extending the child tax credit changes is on the list of priorities Democrats are considering cutting from their economic package, as they work to get to a spending number all Senate Democrats will support, according to two congressional Democratic sources familiar with the discussions.

Booker said he's frustrated he's having to plead his case to members of his own party.

"There's nothing bigger than this. I'm a guy that fights for a whole lot of issues. And I do believe in paid family leave...I want all of it. But if you just want to look at the impact of a child's life, this is the biggest thing that we're doing," he said.

"To me, it's a moral obscenity. Do we love our children or not? And love is not sentimentality. Love is saying we're going to be there for you," Booker added.

It's a sentiment shared by Warnock who also expressed frustration there's even a possibility extending the child tax credit enhancements would not be included in the final package.

"I think it's par for the course in Washington, because children don't have lobbyists," he said.

"I'm going to fight for it," Warnock, told CNN. "This is a tax cut for working families. It will help 97% of families with children. I know firsthand the big difference it will make."

Booker said his top priority is making the child tax credit permanently fully refundable, which attacks poverty by allowing the poorest Americans to qualify for the full amount even if they have no income. He also wants to extend the enhanced payments and continue the new practice of issuing the credit in monthly installments sent directly to families through 2025.

Citing Biden's support for the issue, Booker placed the odds of the child tax credit provisions being included in Democrats' final bill at "better than 50%, I think it's more likely than not."

Biden initially proposed extending the enhanced child tax credit monthly payments through 2025 and making permanent its full refundability in his $1.8 trillion American Families Plan and the House Ways and Means Committee included those provisions in its piece of the House legislation. Booker, Warnock, Brown and Bennet have all spoken publicly about their support for those provisions in the Senate version of the bill.

Negotiations within the party

But not all Senate Democrats are on the same page when it comes to if and how they will keep the child tax credit provisions in the final economic package. Manchin, a moderate Democrat from West Virginia, has said a work requirement may need to be added in order to receive the expanded tax credit payments, an idea that proponents of the credit strongly disagree with, arguing data shows the credit can actually increase single mothers' workforce participation.

"I talk to him," Booker said of Manchin. "I don't know where he is right now. There's a lot coming at Joe and a lot of issues from the environmental issues to other things, so I don't know."

Manchin told CNN's Dana Bash on State of the Union on September 12 he supports child tax credit but did float the idea of means testing and capping the income levels that determine who receives the benefits at a lower number than where the cap currently sits.

"There's no work requirements whatsoever. There's no education requirements whatsoever for better skill sets. Don't you think, if we're going to help the children, that the people should make some effort?" Manchin said.

"Let's make sure that we're getting it to the right people," Manchin explained. "I can tell you, people that are working and working poor making every effort they can to get ahead in life, that's in that $50,000 and below. I've got people that are making combined $200( thousand) and $300 (thousand) and more, up to $400 (thousand), saying they're getting checks."

Like Manchin, others in the caucus have also raised concerns about who will be receiving the payments.

Sen. Angus King, an independent from Maine who caucuses with the Democrats, told CNN while he thinks the child tax credit is "very important," he has "some reservations about what the income levels are and who it goes to."

The Republicans tax cut law of 2017 raised the income eligibility thresholds for the credit to $200,000 for single parents and $400,000 for married couples filing jointly, before phasing out. These changes are set to expire by the end of 2025. Prior to this, the phaseout thresholds were $75,000 for single filers and $110,000 for couples.

Booker he's willing to negotiate on the phase out number.

"I can understand that people that people may be wanting to govern it down a little bit. I'm open to that," he said.

Sen. Jon Tester, a moderate Democrat from Montana, said he thinks they "should try to negotiate to see if we can keep it in."

But Tester also made clear that at the end of the day Democrats "need enough votes to get the damn thing passed."

"If it's important enough leave it in, if it's not take it out," Tester said.

For those advocating for its inclusion in the bill, there is nothing more important.

"It's one of the best investments you can make in America right now. So to say this is about giving things away, no. This is a nation that says we're going to invest in ourselves, in our infrastructure, in education, but we want to invest in our children," Booker said.

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