U.S. Democrats will introduce legislation Monday that will give between $3,000 and $3,600 a child to millions of American families as part of a broader congressional financial boost estimated to cost almost $2 trillion.
The new legislation, spearheaded by the Committee on Ways and Means - the chief tax-writing committee of the House of Representatives - chairperson Richard Neal, a Democrat from Massachusetts, was announced shortly after Utah Republican Senator Mitt Romney launched a similar proposal that lends bipartisan support to increasing cash assistance for families with children.
As part of the package, the Internal Revenue Service will release $3,600 a year per child below the age of six years, or $300 a month, and $3,000 for each child aged between six years and 17 years, or $250 every month.
The cash aid each family gets would start decreasing after an income threshold of $75,000 a year for single parents and $150,000 per couple. The money would be released in monthly installments starting in July, The Washington Post said.
U.S. President Joe Biden has attached the child financial support initiative to his proposal to the House and it is an element that might lift many the country's poor children out of hardship, a research conducted by Columbia University shows.
"We're making the child tax credit more generous, more accessible and by paying it out monthly, the money will be the difference in a roof over someone's head or food on their table," Axios quoted Democratic congressman Neal as saying.
Some 27 million children currently live in low-income families who receive a partial or no tax credit because they earn too little, according to the Center on Budget and Policy Priorities.
The current Child Tax Credit provides up to $2,000 per child under the age of 17. The credit phases out for single parents with a modified adjusted gross income over $200,000, and $400,000 for married couples. Families receive a single payment.
Meanwhile, U.S. Treasury Secretary Janet Yellen said Biden's $1.9 trillion financial program could generate enough growth to stabilize the country's ailing jobs sector by 2022.
"We're in a deep hole with respect to the employment market and a long way to dig out," she said in remarks quoted by Bloomberg.
Yellen said that the economy only produced 49,000 jobs last month after having lost jobs in December. She also said Biden's $1.9 trillion aid package isn't specifically intended for job creation, but that "the spending it will generate will create demand for workers."
Yellen said Sunday the U.S. could see full employment next year if Congress passes Biden's proposed stimulus package, but warned the country's unemployment rate would remain elevated over the next few years without the additional $1.9 trillion in federal support.
"I would expect that if this package is passed that we would get back to full employment next year," Yellen told CNN.
"The Congressional Budget Office issued an analysis recently and it showed that if we don't provide additional support, the unemployment rate is going to stay elevated for years to come," she added. "It would take (until) 2025 in order to get the unemployment rate down to 4% again."
Full employment does not mean the unemployment rate is at zero, but, instead, generally that employers have hired as many qualified professionals as they need.
The CBO said in a report issued last week that the number of employed Americans won't return to its pre-pandemic level until 2024, showing just how long the job market still has to go to heal after suffering the steepest loss on record in April, when 20.5 million jobs were lost and the unemployment rate shot up to 14.7% in a single month as the coronavirus ravaged the country, CNN said.
