A series of reports in The Wall Street Journal informs readers that U.S. employment will decrease by 1.5 million if, as Democratic leaders wish, the expanded child tax credit (CTC) that was temporarily in effect in 2021 is reenacted and replaces the current-law child credit.

In April 2021 President Biden proposed a five-year extension of the expanded credit. On a party-line vote, Democrats in the House included a one-year extension (through 2022) of the expanded CTC in the Build Back Better Act (H.R. 5376) that passed November 19, 2021.

But in the Senate, Democrats couldn’t get the 50 votes required to include the credit in final legislation, the Inflation Reduction Act (P.L. 117-169), largely because of the objection of Sen. Joe Manchin III, D-W.Va., about the absence of a work requirement.

The Joint Committee on Taxation estimates that a permanent extension would cost $1.4 trillion over 10 years. Democrats continue to seek extension of the credit in the lame-duck session, perhaps in a deal that would include repealing amortization of research expenses and extension of 100 percent bonus depreciation.

The 1.5 million reduction in employment estimate comes from a recent study by University of Chicago economists. If that estimate is correct, it would mean slower overall economic growth. And the poverty-reducing effect of the credit, estimated by the Census Bureau as cutting child poverty almost in half, would be much less.

So we have the usual trade-off between economic...

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