Saipan – Congressman Gregorio Kilili Camacho Sablan said today that he welcomes the announcement that $3.2 million in federal child tax credit checks are being distributed to families in the Northern Mariana Islands. But the Congressman also warned that the so-called “Ryan plan,” passed by the Republican majority in the U.S. House of Representatives this year, will cut this important tax benefit.
“I know that families in the Northern Marianas will be able to put their tax credit checks to good use right now,” Congressman Kilili said. “With school starting there are always expenses for clothes and supplies; and the child tax credit that many families are getting will help meet those costs.
“An extra $3.2 million into our local economy is also very good news for our businesses in these tough times.”
The American Recovery and Reinvestment Act, one of the first bills Sablan voted on as the Northern Marianas representative in Congress, made the child tax credit available to many low-income families in the Marianas.
Before the Recovery Act, taxpayers with dependent children under age 17 needed at least $8,500 in income to benefit from the credit. But the Recovery Act lowered the income threshold to $3,000.
The Recovery Act also assured that the money would be available for people in the Northern Marianas by requiring that the U.S. Treasury cover over the needed funds to the Commonwealth government.
“We always have to be careful when we make changes in the federal tax code,” Sablan said. “We don’t want the Commonwealth government to lose revenues.
“That’s why the cover-over provision in the Recovery Act was so important.
“With the cover-over our families get $3.2 million. But the Commonwealth government doesn’t lose $3.2 million. It’s all federal money.”
Ryan plan threatens tax credit after 2012
When the Democratic Congress passed the Recovery Act in 2009 it set the maximum child tax credit at $1,000 per child for the years 2009 and 2010. Later, in 2010, Democrats extended the $1,000 maximum through 2012.
But the budget plan passed by the Republican majority in the U.S. House of Representatives this year makes no provision to keep the $1,000 maximum beyond 2012.
The Ryan plan also makes no provision to continue the cover-over to the territories, creating a further burden to the cash-strapped Commonwealth government who may decide that it does not have the cash to continue the child tax credit payments that is most helpful to families in the Northern Marianas at this time.
“The budget plan prepared by Congressman Paul Ryan is called the ‘Pathway to Prosperity,’” Kilili said.
“But if the Ryan plan becomes law it will mean less money – and less prosperity – for families in the Northern Marianas.”