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More Cash For More Parents

Taxes, Tax Cut, Congress, Senate, Capitol Hill, House, U.S.
CBS/AP
The Senate voted Thursday to give 6.5 million low-income families a check worth $400 for each of their children, as Republicans buckled under demands from Democrats to make more low-wage workers eligible for an increased child tax credit.

"These are hardworking couples who put in a hard day's work," said Democrat Blanche Lincoln of Arkansas, who pressured Republicans to revisit the tax cut President Bush signed in May. "They're trying desperately to raise a family."

The bill also provides a boost for military personnel who have served in combat zones and often don't owe enough tax to fully benefit from the child tax credit.

The House must act on the legislation by June 23 for the low-income families to get checks at the same time as the 25 million middle-income households that will benefit from the $1,000 child tax credit.

CBS News Correspondent Bob Fuss reports the spirit of compromise in the Senate was not immediately evident in the House, where, during an intense floor debate, Republican Majority Leader Tom DeLay condemned Democrats, insisting the working poor are getting plenty from the tax cut bill and the child tax credit doesn't need to be refundable.

"This notion that we are not taking care of the poor working families of this country is completely false," said DeLay, R-Texas.

But with the Senate moving so quickly to fix what Republicans there recognize as a thorny political problem, pressure on the House will increase.

Senate Republicans initially resisted changing the law, which currently offers the credit to families who pay income tax and gives minimum wage workers — those who get enough tax benefits to see their income taxes eliminated — a partial refund.

Some Republicans have historically supported refundable tax credits, such as the much larger earned income tax credit, as a way to encourage low-wage workers to stay in the labor force and avoid welfare.

Backed by a strong push from community activists, Democrats pointed to the tax cut enacted last month as concrete proof that Republicans favor the wealthy over the poor.

"This administration is waging war on poor children," said Sen. Hillary Rodham Clinton, D-N.Y. "The reality is that they are steadily and surely trying to turn the clock back on all of the programs and supports that working families and their children need and deserve."

The legislation also reduces the five definitions of a "child" used for different tax deductions and credits to a single definition. The bill's $10 billion cost will be offset by an extension of customs fees.