GOP blocks bill that would have reduced Montana’s child poverty rate by 45%

Senate Republicans on Aug. 1 blocked a tax relief bill that would have expanded the child tax credit and offered a lifeline to 55,000 families in Montana who struggle to afford basic necessities for their children, according to a report from the Montana Budget and Policy Center.

The Tax Relief for American Families and Workers Act of 2024 failed to advance in the Senate by a vote of 48-44, short of the 60 votes needed. Montana Democratic Sen. Jon Tester voted for the bill, while Montana Republican Sen. Steve Daines voted against it.

The bill had already passed the House in January by a vote of 357-70, garnering wide bipartisan support in an otherwise deeply divided chamber. 

The bill would have created a refundable child tax credit for qualifying families that increased yearly, putting thousands of dollars into the pockets of American families.

Had the Senate passed the bill, it would have restored the refundable credit that Democrats in Congress had passed in 2021, shortly after President Joe Biden took office, but that Congress let expire at the end of that year.

The initial expanded child tax credit was part of the American Rescue Plan. That law increased the credit from $2,000 to $3,600 for children under the age of 6, and $3,000 for children under the age of 18. The change also made the credit fully refundable, meaning that families who earned too little to pay federal taxes still got the credit in the form of cash payments.

The policy helped dramatically reduce child poverty in the United States to 5.2%, the lowest level on record, according to the Brookings Institution, a nonpartisan think tank. 

Some 55,000 Montana families that used the extra funds to pay for food, utilities, and housing lost that support when the expanded tax credit expired, according to the Montana Budget and Policy Center report. 

Expanding the child tax credit would lift 45% of Montana’s children out of poverty, according to the report.

“Children who live in households with poverty-level incomes often experience lower academic success than their peers, which carries forward into their lifelong economic outcomes. Policy choices like a [child tax credit] that lifts a great number of children out of poverty can help improve lifelong economic success for Montana kids, which has a positive impact on the Montana economy as well,” the report said.

Tester voted in favor of the renewed child tax credit expansion.

“At a time when Montanans are struggling with rising costs on everything from housing to groceries, we should be focused on putting more money back in the pockets of hardworking families and small businesses – especially as our state faces skyrocketing housing prices that are forcing Montanans out of their communities,” Tester said in a news release posted on Aug. 1.

Daines voted against the bill, calling it a “cynical show vote that has no chance of becoming law.”