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Tax Credit Move Is Stymied

DeLay says he will block any effort to introduce a bill that would restore a child-care benefit for millions of working families.

June 04, 2003|From Newsday

WASHINGTON — House Majority Leader Tom DeLay on Tuesday delivered a setback to a legislative effort gaining strength in the Senate to restore a child-care tax credit for millions of working families that was eliminated from the newly enacted tax cut law.

DeLay said he would not permit legislation making the working poor eligible for the expanded child-care tax credit to come to the House as a separate bill. The tax cut law increased the child-care tax credit to $1,000 from $600 per child.

"They had their chance," DeLay said, referring to legislators who worked on the law. "There's a lot of other things that are more important than that. To me it's a little difficult to give tax relief to people who don't pay income taxes."

Families cut from the benefit do not earn enough to owe sufficient taxes to use a credit to offset their taxes. To address this, the Senate had called for an expansion of the portion of the child-care tax credit that is refundable as a cash payment to those earning from $10,500 to $26,625.

For The Record
Los Angeles Times Friday June 06, 2003 Home Edition Main News Part A Page 2 National Desk 1 inches; 54 words Type of Material: Correction
Tax credit -- A Newsday article in Wednesday's Section A incorrectly said that House Majority Leader Tom DeLay opposed legislation to restore a child-care tax credit for the working poor. The tax credit that DeLay opposes is for children, not child care. The headline on the story also incorrectly referred to a child-care benefit.

DeLay suggested that supporters could leverage such a change if it were made part of a larger tax cut proposal. Republicans said such a larger bill could remove the cap on the eligibility for the child-care tax credit and make it permanent.

His position presented a hurdle for legislation being pressed by Sens. Olympia J. Snowe (R-Maine) and Blanche Lambert Lincoln (D-Ark.) to help those left out of the tax cut law that President Bush signed last week.

DeLay's statement came as Sens. George Voinovich (R-Ohio) and John McCain (R-Ariz.) announced they backed the bill.

"I would certainly vote for it," McCain said. "I don't understand how you left enlisted men and women out of this tax package. I don't get it."

Lincoln tried but failed Tuesday to get the Senate to vote on the bill. Sen. Pete V. Domenici (R-N.M.) blocked the effort by pushing a broader, far more expensive version that Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) has proposed. Later, Republicans removed both proposals from the Senate energy bill to which they were attached.

Grassley's bill would expand the benefit for the working poor, but also would make the child-care tax credit permanent and would not offset its estimated $61.5-billion cost.

Key Senate Republicans back Grassley's broader approach and plan to try to work out over the next couple of days a way to bring his bill to the floor, but that plan is not expected to sit well with Snowe and Lincoln, who have the support of a growing number of Democrats and Republicans.

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