U.S. to mail child tax credit refunds

WASHINGTON — WASHINGTON - The U.S. Treasury is set to begin mailing tax refunds of up to $400 per child to 25 million families this week - a cornerstone of President Bush's effort to jump-start the economy, but a benefit that has sparked controversy.

Bush will trumpet the imminent arrival of the refunds today, when he and Treasury Secretary John Snow visit a Philadelphia office where the checks are being printed.


Yesterday, Democrats and their allies continued their effort to spotlight the 6.5 million low-income families who will not receive the money. To protest lack of action on a bill to extend the relief to the working poor, Democrats slowed action in the House for hours by forcing back-to-back roll call votes on routine matters.

And in a demonstration organized by the Children's Defense Fund, an advocacy group, hundreds of young people whose families would not receive refunds rallied at the White House and on Capitol Hill.


"We wanted legislators and people in Congress to know the children in our district are being mistreated," said Jacinta James, 15, of New York.

Some Republicans worry that the dispute could cloud the sunny message Bush wants to send about the prospects for economic improvement. But a push this week by Senate Republicans to resolve the issue was thwarted by GOP leaders in the House. As a result, Congress is heading into its summer recess without any sign that the deadlock will be resolved soon.

At issue is one of the most tangible benefits of the $350 billion package of tax cuts and spending initiatives Bush signed into law in May. Among its provisions was an increase - from $600 to $1,000 - in the per-child tax credit for this year, next year and 2005.

Families who qualify do not have to wait until they file their 2003 taxes to receive the benefit because the law instructed the Treasury to mail the payments in advance. The Internal Revenue Service will be sending the checks in three mailings: Friday, Aug. 1 and Aug. 8.

Republicans anxious about the economy's continued troubles are hoping that the refund checks will give people a boost - economically and psychologically.

"Cash in people's hands makes a big difference," said Rep. Jack Quinn of New York.

However, the tax credit increase did not apply to low-income families who make too little money to owe federal income taxes. Although tax-cut bills often authorize payments to low-income people in lieu of tax credits, the measure Bush recently signed did not.

That omission provoked a storm of protest among Democrats and caused Bush to ask Congress to approve the benefit for low-income families.


The Senate quickly responded by passing a $10 billion bill in June. But House leaders rejected the push to target the legislation solely to low-income families and instead passed a broader, $80 billion tax cut.

The Los Angeles Times is a Tribune Publishing newspaper.