Lapse of bigger child tax credit will hurt rural families more, especially in WV, but Manchin may not get much blowback

Rural families will be disproportionately hurt when the expanded child tax credit expires at the end of the year, but the holdout vote on the bill may not face much political blowback from his constituents.

The wildly popular program, enacted in March as part of the American Rescue Plan, marked the first time the federal government tried to reduce poverty through widely available direct payments. It was particularly effective because it made the credit accessible for the first time to those too poor to file federal taxes. "Before the credit was expanded, an estimated 56 percent of all rural children didn’t receive the entire tax credit because their families didn’t earn enough money to qualify," Tim Marema reports for The Daily Yonder. "In metropolitan areas, about 48% of children lost some or all of the credit. The American Rescue Plan eliminated the income threshold and expanded the credit from $2,000 per child to $3,000, with an additional $600 for children under 6," Marema reports. "The changes raised an estimated 4.1 million children out of poverty, according to the Center for Budget and Policy Priorities. All but 15% of the poverty reduction was because of elimination of the income requirements to receive the tax credit."

The Build Back Better Act had a one-year renewal of the tax credit, but Congress adjourned for the year without voting on it, and the credit expires Dec. 31. Even if Congress does pass the law in the new year, tax credit payments would likely be disrupted, Marema reports.

At the heart of the struggle over the program is Sen. Joe Manchin (D-W.Va.). Since all Senate Republicans oppose the bill, Democrats need all 50 votes (and a tie-breaker from Vice President Kamala Harris) to pass it. But Manchin said he couldn't support the bill. In private talks with President Biden, Manchin laid out a version of the bill he would vote for that included universal pre-kindergarten for 10 years, expanded Obamacare and had hundreds of billions of dollars to fight climate change, Jeff Stein and Tyler Pager report for The Washington Post. Notably absent was an extension of the child tax credit.

Manchin has cited worries about the cost of the bill, but private comments point to general concerns that low-income people would abuse benefits received through the package. "Specifically, Manchin said parents would use child-tax-credit money to buy drugs and workers would abuse the paid-family-leave program in the legislation to get out of work and go on hunting trips," Grace Panetta and Joseph Zeballos-Roig report for Business Insider.

"Recent Census data shows that more than 90% of families that have received payments from the expanded Child Tax Credit have spent the money on basic necessities like food, shelter, clothing, and utilities," Marema reports.

Manchin recently said in a Fox News Sunday interview that he can't vote for the bill if he "can't go home and explain it to the people of West Virginia." However, Marema notes: "Manchin’s constituents in West Virginia are especially vulnerable to the elimination of the expanded tax credit. The state has one of the highest child poverty rates in the U.S. About 48% of children 17 and under live at 200% of the poverty rate, considered an indicator of serious financial challenge. West Virginia's rate of children living at or below 200% of poverty is the fifth highest in the U.S. In West Virginia, expiration of the Child Tax Credit expansion will eliminate or reduce the credit for approximately 72,000 low-income rural children and nearly 100,000 low-income children who live in metropolitan areas."

Even so, West Virginians may not punish Manchin for not supporting the package. Though West Virginians are some of the nation's most-dependent on direct government payments, they see themselves as "flinty and self-reliant" and that "partisan tribalism, cultural issues and an attachment to the vanishing coal industry drive voter sentiment there, creating what is a paradoxical hostility to government," Washington Post columnist Karen Tumulty writes.

But, Manchin "is also well aware that government has a vital role when it comes to bettering the lives and futures of his constituents. Which means things might not be over yet for some version of the Build Back Better bill," Tumulty writes.