Newspaper article The Christian Science Monitor

How a Little Kids' Tax Credit Became a Big Battleground ; A Deal Appeared near after Outcry That Poor Families Had No Tax Cut. but Capitol Hill Wrangling Puts Bush in Bind

Newspaper article The Christian Science Monitor

How a Little Kids' Tax Credit Became a Big Battleground ; A Deal Appeared near after Outcry That Poor Families Had No Tax Cut. but Capitol Hill Wrangling Puts Bush in Bind

Article excerpt

Protesters waved signs and pushed symbolic strollers through a steady rain, as Republicans gathered at the Washington Hilton across the street for a $3.5 million fundraiser for President Bush.

"Tax credits to the poor! Millionaires don't need no more!" protesters chanted. It was a reference to the child tax credit for low-income families that is bogged down in Congress but could become law with a little elbowing from Mr. Bush. A few passing cars honk support.

It's a tough issue for the president: To settle the standoff from the White House risks either offending elements of the GOP conservative base or giving Democrats an issue they can exploit in the 2004 campaign. Bush has called on the House and Senate to "quickly resolve their differences."

Behind this drama is an obscure bit of tax code that only recently has emerged as the Democrat's latest best hope for a defining issue in the 2004 election campaign.

It started as a blip on the way to a $350 billion tax cut that Bush signed into law May 28. The new law increases the annual child tax credit from $600 to $1,000, with more families eligible over time. Arkansas Sen. Blanche Lincoln - the lone Democrat to support the tax cut on the Senate Finance Committee - proposed accelerating refunds for low-income families, who otherwise would not get checks until 2005. Her proposal made it through the Senate - but was bumped in the final House-Senate compromise.

By then, a liberal think tank published an analysis that showed that many low-income families would not benefit from the new tax cut, including 6 million who would be excluded from the full increase in the value of the child tax credit because they earned too little.

Democrats began to sense an issue.

"The child tax credit is a clear demonstration of priorities, and it will be hard for Republicans to walk away from it," says Sen. Jon Corzine, chairman of the Democratic Senatorial Campaign Committee. "It makes a good stump speech when you're trying to motivate people to change control of the US Senate."

Senate Republicans quickly passed a bill to restore the credits, including $10 billion in offsets to pay for it without raising the federal deficit. …

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