November 07, 2022

ICYMI: Smith, Brady Demand Answers on Failed Rollout of Democrats' Dismantled Child Tax Credit Policy

House Budget Committee Republican Leader Jason Smith (MO-08) and House Ways & Means Committee Republican Leader Kevin Brady (TX-08) sent a letter last week to Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig demanding an accounting of the botched rollout of the Democrats’ partisan dismantling of the Child Tax Credit (CTC) in the American Rescue Plan Act, including attempts to stand up an online portal that failed to meet the needs of taxpayers.
“In May 2021 the Biden Administration rolled out in haste an online portal created by the Internal Revenue Service (IRS) and financed by American taxpayers to assist taxpayers in accessing their Advance CTC payments. That effort ignored the serious concerns raised by Ways and Means Committee Republicans about the risk of improper and missed payments, glitches in the payment system, and the predictable frustration taxpayers would face when having to reconcile their advanced payments during filing season. True to form, the portal was unreliable…American taxpayers continue to deal with the consequences of this hastily implemented policy. For example, we have reports from taxpayers who received payments in some months but not in others…We similarly heard reports from families who received payments for which they were not eligible, asking what they should do to correct this error…This means that 5.6 million taxpayers had negative results from this program and, as a result, faced additional challenges during the tax filing season.

- Excerpt from Letter Sent by House Budget Committee Republican Leader Smith and House Ways & Means Committee Republican Leader Brady

In their American Rescue Plan Act, Democrats undermined a successful, bipartisan Child Tax Credit policy by putting their government dependence agenda ahead of kids. Democrats dropped work requirements for the credit – fueling a worker shortage. Changing the program from an annual to a monthly credit also created a logistical nightmare for families trying to access the new system.

In the letter, Smith and Brady ask how many tax returns were affected by the problems that plagued the Child Tax Credit after Democrats transformed it in the American Rescue Plan Act – missing payments from some people and incorrect payments sent to others. The Ranking Members also demanded that the Treasury Department preserve any documents related to the rollout of the Democrats’ dismantled Child Tax Credit, any attempts by the Treasury Department to fix errors, and the circumstances surrounding the online portal created by a third-party entity, Code for America.

Democrats' Partisan Child Tax Credit is the Wrong Plan
According to the Joint Committee on Taxation, a permanent extension of Democrats’ CTC would:
Democrats' Policies Kept Americans Out of Work  Removing work requirements from the Child Tax Credit kept Americans from going to work:
  • In all of 2021, when the Democrats’ Child Tax Credit policy was in place, just 1.6 million Americans joined the workforce.
  • In the two months after the Democrats’ Child Tax Credit expired at the beginning of 2022: 1.7 million Americans joined the workforce.
Democrats' CTC Riddled with Problems Democrats’ partisan Child Tax Credit has been a nightmare for families:
  • IRS failed to send out 8.3 million payments to 4.1 million eligible taxpayers.
  • $1.1 billion in checks were sent to ineligible taxpayers.
  • Some taxpayers received CTC payments in some months, but not in others.
  • Parents who missed payments are struggling to reconcile the difference between actual payments and payments they are entitled to receive on their tax returns.