Congress’ lame duck session leaves ‘unfinished business’ on issues that address Americans’ everyday financial needs

Washington lawmakers are speeding to get as a lot executed as attainable earlier than the calendar yr and the lame-duck session of Congress runs out.

Some modifications poised to undergo might have a huge impact on Individuals’ funds, specifically some massive retirement financial savings updates poised to get included in a year-end spending invoice.

associated investing information

However another proposed initiatives haven’t made the reduce, and which will even have a huge impact on people’ and households’ funds till Congress has the possibility to revisit them once more.

Extra from Private Finance:
Safe 2.0 invoice on monitor to usher in retirement system enhancements
New retirement laws leaves a ‘enormous downside untouched’
New emergency financial savings guidelines could assist enhance monetary safety

“Coverage advances that will handle the on a regular basis wants of low-income individuals and households had been largely unnoticed, regardless of efforts by many policymakers,” Sharon Parrott, president of the Heart on Funds and Coverage Priorities, just lately wrote of the year-end omnibus package deal that will maintain the federal government funded by means of a lot of 2023.

The “unfinished enterprise” leaves a to-do listing for lawmakers on each side of the aisle subsequent yr, she mentioned.

This is how the problems that missed the reduce this yr could crop up once more in 2023.

A yr in the past final December, thousands and thousands of households obtained their last monthly child tax credit checks.

Legislation to help parents cope with the effects of the Covid-19 pandemic made the child tax credit more generous for the 2021 calendar year. For the first time, that also included advance monthly payments.

The maximum child tax credit sums went up from $2,000 per child to $3,600 per child under age 6 and $3,000 per child ages 6 through 17. Up to half of the more generous sums was sent out in monthly payments to families — $300 per child under 6 and $250 per child ages 6 through 17.

Importantly, it also made the credit fully available to families with little to no income, which helped reduce child poverty.

Now, a big push to renew more generous terms for that tax credit have fallen flat in year-end negotiations.

The 2021 child tax credit expansion was very successful in driving down child poverty to a record low and helping families meet record costs, Marr noted.

“I think there was a compromise there to be had, and it didn’t happen,” Marr said.

On the bright side, the same compromise to re-up the child tax credit alongside corporate tax breaks may come up again in 2023, he said.

Some lawmakers have insisted the child tax credit gets included in any new tax legislation. “It’s pretty simple — no corporate tax cuts without tax cuts for working families,” Sen. Sherrod Brown, D-Ohio, recently said.

Yet other leaders want to see more rules attached to the child tax credit, such as work requirements, which will likely require compromise, and could mean any new policy may be less generous than the 2021 expansion.

“I think those conversations are going to be starting early next year and continuing throughout the year,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

Supplemental Security Income, a federal program that provides benefits to the elderly, blind and disabled, turned 50 this year.

Yet many of the program’s rules have not been updated for decades.

A bipartisan bill from two senators from Ohio — Brown and Republican Rob Portman — would raise the asset limits for beneficiaries to $10,000 for individuals and $20,000 for couples, while also indexing them for inflation.

Today, the program’s asset limits are $3,000 per couple and $2,000 for individuals. That not only limits the amount of savings beneficiaries may have, but it also imposes a marriage penalty on beneficiaries.

“SSI’s punitive and archaic asset limit is the most egregious anti-savings measure in federal law today,” said Rebecca Vallas, senior fellow at The Century Foundation and co-director of the think tank’s Disability Economic Justice Collaborative.

“Yet we continue to see a lack of sufficient political will to allow people with disabilities to save,” Vallas said.

The fate of the proposal is unclear since Portman is retiring this year and it remains to be seen whether another Republican leader will step up to support it, Akabas said.

“It’s going to probably be some time before that gets another opportunity,” Akabas said.

The year-end budget deal provides additional funding for the Social Security Administration, but “barely enough to tread water,” Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities, recently wrote.

The deal features a 6% improve, or $785 million, over the company’s 2022 funding stage, Romig mentioned. President Joe Biden had requested an 11% improve, or $1.4 billion extra, she famous. Home and Senate committees had additionally backed extra funding for the company.

The extra funding might have helped the Social Safety Administration cut back its backlog and lengthy waits for service by updating its know-how methods and rent new workers, Romig famous.

“As a substitute, candidates and beneficiaries face one other yr of unacceptable waits for the Social Safety and different advantages they’ve earned,” Romig wrote.

Congress probably is not going to revisit funding for the Social Safety Administration till subsequent fall, in line with Akabas.

New retirement proposals poised to maneuver now embody a enhance for emergency financial savings. Plan suppliers will be capable to robotically enroll workers in separate accounts the place they’ll put aside as much as $2,500 for near-term wants alongside their retirement funds. One other provision would lets plan members withdraw $1,000 per yr for emergencies with out penalty, although some restrictions would apply.

However a proposal that will take that additional and permit for separate standalone emergency funds exterior of retirement accounts didn’t make it into the laws.