During closed-door negotiations last week, House and Senate leaders stripped a key provision from the payroll tax cut bill that would have prevented illegal aliens from qualifying for the additional child tax credit (ACTC). Leaders caved on the language in spite of an U.S. Inspector General report revealing that illegal aliens received $4.2 billion in refundable tax credits in 2010, primarily through the ACTC. (See TIGTA Report 2011-41-061, July 7, 2011; see also FAIR Legislative Update, Sept. 6, 2011)
The provision members struck from the bill – similar to legislation introduced by Rep. Sam Johnson (R-TX), Rep. Jack Kingston (R-GA), and Senator David Vitter (R-LA) – would close this tax credit loophole by requiring that individuals who claim the ACTC provide a valid Social Security Number (SSN). (FAIR Legislative Update, Nov. 21, 2011) Currently, the IRS only requires applicants for the ACTC to provide an Individual Taxpayer Identification Number (ITIN), which the Internal Revenue Service (IRS) indiscriminately hands out to illegal aliens.
Although twenty House and Senate members were assigned to negotiate the final version of the bill, media outlets widely reported that the final package was crafted by Congressional leaders: House Speaker John Boehner (R-OH), Senate Majority Leader Harry Reid (D-NV), Sen. Finance Chair Max Baucus (D-MT), and House Ways and Means Chair Dave Camp (R-MI). (Politico, Feb. 16, 2012)
Speaker Boehner threw his support behind the deal. This is “a fair agreement and one that I support,” he told reporters. (Washington Post, Feb. 16, 2012) Majority Leader Reid also spoke favorably of the agreement, “I am glad that most of my Republican colleagues put the interests of the middle class ahead of politics,” he declared in a statement. (Fox News, Feb. 16, 2012)
The $4.2 billion taxpayers doled out to illegal aliens in 2010 reflects a four-fold increase in refundable tax credits paid to illegal aliens over the last five years. A previous report issued by the Treasury Inspector General revealed Americans paid $924 million in 2005. (See FAIR’s Website) The Congressional Joint Committee on Taxation determined that if Congress were to fix this burden on U.S. taxpayers, it would save Americans at least $10 billion if the benefit expires in 2012, and $24 billion by 2021. (Human Events, Sept. 21, 2011)