Lincoln's effort to offer child tax credit to low-income families stalled

WASHINGTON -- Collecting dust atop a desk in the office of House Minority Whip Steny Hoyer, D-Md., is a laptop computer displaying a digital clock.

At 11 a.m. on Friday, it read: 161 days, 15 hours, 11 minutes, and 00 seconds.

The "Working Families Tax Fairness Clock" has served as a useful prop whenever Hoyer talks to the media about a bill to grant child tax credits to low-income families.

The clock shows the time that has lapsed since the House passed a tax credit bill on June 12.

It is also one of the few reminders of the tax credit bill around Capitol Hill these days. After the issue dominated national attention for a few weeks in late spring, it fell by the wayside, mired in partisan bickering.

Despite occasional efforts by die-hard supporters like Sen. Blanche Lincoln, D-Ark., to revive the bill, Congress is expected to adjourn for the year without passing it.

The bill was intended to accelerate and extend a $1,000-per-child tax credit to families who earn between $10,500 and $26,625.

Since these families do not earn enough money to pay income taxes, they would have received the credit in the form of a rebate check worth up to $400 per child.

The issue catapulted to prominence in May after widespread reports that Republicans had stripped the provision aiding the poor from President Bush's tax-cut package in order to make room for a dividend tax break expected to benefit primarily upper-income taxpayers.

The national attention prompted embarrassed Republicans to reconsider, and the momentum brought the issue back before Congress in June.

After the House and Senate approved competing bills, Lincoln was appointed to a committee that was supposed to negotiate their differences and produce a final bill.

The $10 billion Senate measure, supported by President Bush, contained a $3.5 billion tax break and called for offsetting the cost of the tax credits by extending customs fees.

House Republicans, who objected to giving tax credits to families who do not pay income taxes, crafted a broader $82 billion package of tax cuts for middle- and upper-income families. The bill did not contain offsets.

After initial discussion about the wide differences in the two approaches, talks stalled and the issue has all but died in a stalemate, overshadowed by sweeping Medicare overhaul and energy bills.

Senate Minority Leader Tom Daschle, D-S.D., recently labeled the child tax credit "dead in the water.

"There isn't any real prospect of reviving it," he said. "I'm disappointed."

Hoyer contends House Republicans designed a bill that was destined to fail.

Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee,

and House Majority Leader Tom DeLay, R-Texas, were among the Senate bill's most strident opponents.

"I believe it's the Senate's turn to call a conference and I'm waiting for them to call a conference," Thomas said. "So they killed it."

Sen. Chuck Grassley, R-Iowa, a key negotiator in the Senate compromise, identified offsets as the major sticking point in the stalled negotiations.

"It probably won't get done this year," Grassley said. "I have not had any discussions toward accomplishing that."

Lincoln said the issue was clearly not a priority for Republicans.

"They just don't think that these people are important enough," she said. "The child tax credit has been in conference forever."

She said Republicans "are just passing the buck.

"These men run the show," she said. "If they wanted it done, it could have been done months ago."

Lincoln has estimated that 76,000 families in Arkansas would have benefited from the bill. She broke from her party in 2001 to vote for Bush's tax package after it included a refundable child tax credit.

While Lincoln has gotten "the usual kind of shrug off" when she has inquired about the status of negotiations, she has not relented, making attempts along with other supporters to revive the debate.

Touting it as a boon to 290,000 military families, Lincoln tried to get the provision attached as an amendment to the $87 billion defense proposal that Congress took up last month to fund U.S. troops in Iraq and reconstruction in Iraq and Afghanistan.

But Sen. Ted Stevens, R-Alaska, chairman of the Senate Appropriations Committee, blocked its consideration by objecting to it on a procedural point.

Meanwhile, Sen. Olympia Snowe, R-Maine, a proponent and a key negotiator in the Senate compromise, added the provision to a charitable giving bill, but Democrats are blocking that bill for other reasons.

"It's at the height of hypocrisy," DeLay observed. "The Democrats have been screaming and yelling about the child tax credit and yet they are holding up a conference on the charitable giving bill that includes the child tax credit."

He said the action indicates "that politics of the Democrats is more important than getting something done. If they would let us go to conference, maybe we can get that done."

Reflecting on the politics surrounding the issue, Lincoln said the impasse "confirms that there are so many people up here that are out of touch with real Americans."

Lincoln said she would continue pushing the issue next year, even though the $1,000-per-child tax credit will go into effect for all income brackets in 2005.