Author Archives: Matt Unrath

On the Hill: Senate Passes UI Extension and Obstructs Paycheck Fairness

After months of back and forth, this week the Senate finally finished its work on unemployment aid, passing a five month extension of emergency unemployment benefits on Monday. Six Republicans joined the full Democratic conference to support the deal, which allows for retroactive benefits from late December when benefits first expired, and continues through May 31. Leadership in the House remains unenthusiastic about bill, with House Speaker John Boehner (R-OH) citing repeated concerns about the workability of the measure and calling for an agreement on Republican priorities such as a proposal to streamline job training programs.  Senator Dean Heller (R-NV), the chief GOP co-sponsor of the jobless aid measure, has been taking the lead in trying to work out deal to clear the way for House floor action on the Senate bill. Heller said he was trying to set up meetings with Speaker Boehner and other senior Republicans. The House did not take up the measure before adjourning for the two week Easter recess on Thursday, but conversations will likely continue behind the scenes to determine if a package that would be acceptable for the House leadership to take up can be crafted. Senate Democrats remain steadfast in their support for a clean extension of the aid.

Meanwhile, the House spent much of its attention this week on consideration of House Budget Chairman Paul Ryan’s (R-WI) 2015 budget. The House voted 219-205 in favor of the blueprint on Thursday, which would balance the budget in a decade by cutting spending by roughly $5 trillion. Before that vote, the House rejected 163-261 an alternative offered by the Budget panel’s top Democrat, Chris Van Hollen of Maryland, which relies largely on tax increases to achieve more modest deficit reduction. Democrats oppose the Ryan budget because of its cuts to domestic spending, its repeal of the health care overhaul and its tax cuts that they say would benefit the wealthy. Indeed, the Ryan plan makes drastic cuts to federal spending over the coming decade while overhauling numerous federal programs including Medicaid, Social Security, and several welfare programs including the Supplemental Nutrition Assistance Program (SNAP), or food stamps. Ryan’s proposal lacks the force of law and is sure to be ignored by the Democratic-controlled Senate, where Budget Chairwoman Patty Murray (D-WA) is not writing a budget.

Finally, despite a heavy push from top Democrats, this week the Senate failed to pass the Paycheck Fairness Act, which aims to address the national gender wage gap. Current estimates maintain that women earn 77 cents for every dollar men earn based on a comparison of the annual earnings of women working full-time jobs over the course of a year and the earnings of men working the same amount of time. The Senate measure fell six votes short of the 60 necessary to clear a procedural hurdle on Wednesday. Had it passed, the bill would have made it illegal for employers to retaliate against a worker who inquires about or discloses his or her wages or the wages of another employee in a complaint or investigation. It also would make employers liable to civil actions. Lastly, the bill would have required the Equal Employment Opportunity Commission to collect pay information from employers. In keeping with the spirit of the Paycheck Fairness Act, President Obama signed two Executive Orders on pay equity this week. The first would prohibit federal contractors from retaliating against workers who discuss their salaries with one another. The other is a presidential memorandum ordering new rules for contractors to file data with the federal government showing how they compensate employees, including by sex and race.
Both the House and Senate will be in recess for the coming two weeks. They will return to Washington and be in session on April 28th.

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The House Budget: Less Opportunity, More Poverty, and Magical Math

Last month, President Obama issued his proposed fiscal 2015 budget. Despite our frustration that the administration again proposed to eliminate the only program dedicated to training women for jobs and apprenticeships in high-wage, nontraditional careers, WOW found much else to like, including the President’s call for a higher minimum wage, expanding the EITC, dedicating over $100 million for a fund that would encourage states to expand family leave, and much more.

President’s budget looks even stronger this week after the release of a budget proposal from House Budget Committee Chair Paul Ryan (R-WI).

Rep. Ryan’s budget would cut federal spending by $5 trillion over the next ten years, along with increasing defense spending and cutting tax rates for many upper-income households. The Center on budget and Policy Priorities finds, nearly 70 percent of budget cuts come from programs dedicated to helping low- and moderate-income families. .

These disproportionate cuts — which likely account for at least $3.3 trillion of the budget’s $4.8 trillion in non-defense cuts over the next decade — contrast sharply with the budget’s rhetorical commitments to helping the poor and promoting opportunity.   It calls for dramatic changes to several means-tested programs, including a proposed $125 billion cut to the Supplemental Nutrition Assistance Program (SNAP), or food stamps. It also recommends turning SNAP into a state-run block grant program, and calls for an expansion of SNAP work and job training requirements to receive aid from the Temporary Assistance to Needy Families Program.  The budget also undercuts individuals’ efforts to move up the economic ladders and build the skills necessary for better jobs by cutting funding for Pell grants and job training. The National Women’s Law Center underscores how these cuts are a raw deal for the millions of women and children who rely on these programs.

Unsurprisingly, the budget also calls for repealing the Affordable Care Act and cutting off 40 million Americans from health insurance. In addition to reversing the expansions through eh ACA, Ryan’s budget would set a cap on Medicaid spending and then divvy up the money proportionately among all the states– a process known as block granting. The cap on expenditures would cut funding for Medicaid and CHIP by 26% by 2024, and even more than that in following years, according to the Center on Budget.

Rep. Ryan justifies these cuts by citing a debunked report claiming these programs are ineffective.

On the tax side, one of the cornerstones of Ryan’s plan is to hold the budget revenue-neutral, despite his calls to cut taxes by nearly $5 trillion over ten years through reductions in tax rates for corporations and the highest-income households. Still, the budget does not identify a single deduction, exemption or loophole that it would close to offset these tax cuts.  To keep the revenue neutral promise, Ryan relies on some disputed budget math. Known as dynamic scoring, Ryan assumes that his budget’s significant tax cuts for corporations and high-income households will incite significant economic growth, and in turn, sufficient additional revenue. Problematically, the consensus among economic projections is that lowering tax rates so significantly on those most able to pay will simply, unsurprisingly, decrease revenue, necessitating additional borrowing or funding cuts for critical investments in our families and economy.

Rep. Paul Ryan’s budget won’t pass.  Still, the budget warrants a close examination, because it is a strong predictor of the budget Rep. Ryan and his Republican colleagues would enact if they controlled the Congressional purse strings.  Moreover, after Rep. Dave Camp’s (R-MI) retirement, Rep. Ryan may become the next chair of the House Ways and Means Committee, an even more important seat for guiding his party and the House’s tax and budget plans.

Ryan’s budget may just be the same recycled proposals of previous years, but sadly, they also don’t seem to be going anywhere.

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On the Hill: The House Budget

Congress was in session this week with much fanfare surrounding the release and committee consideration of House Budget Committee Chairman Paul Ryan’s (R-WI) fiscal 2015 budget blueprint. The plan is largely symbolic, as Congress already set spending levels for fiscal years 2014 and 2015 in the January budget agreement. Ryan’s blueprint has no chance of being taken up by the Senate but largely reflects the Republican party’s platform for how they would govern should they take back control of the Senate after this year’s election  and the White House in 2016. The plan makes drastic cuts to federal spending over the coming decade, and overhauls key federal programs.  The Center on Budget and Policy Priorities (CBPP) in a forthcoming report estimates that some 69 percent of the cuts would come from programs that serve people of limited means.  These disproportionate cuts — which likely account for at least $3.3 trillion of the budget’s $4.8 trillion in non-defense cuts over the next decade — contrast sharply with the budget’s rhetoric about helping the poor and promoting opportunity.  Of its many proposals, the plan would repeal the Affordable Care Act, and change Medicaid into a block grant program. It also calls for dramatic changes to several welfare programs, including a proposed $125 billion cut to the Supplemental Nutrition Assistance Program (SNAP), or food stamps. It also recommends turning SNAP into a state-run block grant program, and calls for an expansion of SNAP work and job training requirements to receive aid from the Temporary Assistance to Needy Families Program. Democrats have raised strong objections to many proposals in Ryan’s plan, which tracks closely to many of his previous budget blueprints.  The budget was approved on a 22-16 voted by the Budget Committee on April 2nd,  after debating for nearly 10 hours Wednesday. Republicans defeated 24 Democratic amendments aimed at restoring funding for domestic programs and endorsing immigration, minimum wage and unemployment insurance proposals.  The bill will be on the House floor next week.

The Senate made progress this week on a bipartisan five-month extension of jobless aid, voting 61-35 to invoke cloture and move forward on the measure Thursday and clearing the path for passage on Monday. It remains unclear whether the House of Representatives will take up the bill, with House Speaker John Boehner (R-OH) and many in his caucus continuing to portray the extension as unworkable after a three-month break in such benefits. While that is the dominant view among the House GOP conference, seven Republicans did send a letter to Speaker Boehner this week urging him to bring something to the floor. For some Republicans, the Senate measure presents an enticing vehicle for several stalled proposals to cut taxes, curb regulations and undo mandates under the health care overhaul. If House leadership decides to attach such provisions, they will have to weigh how far they can go in pushing Democrats to accept the package before they invite criticism that they are obstructing the bill. Democrats made clear Thursday they would press for quick House floor action on the Senate package, without changes. Senate Majority Leader Harry Reid (D-NV)said he had no plans to open talks with House Republicans to tweak the package.

Backers of an increase in the minimum wage continued to step up the pressure this week, appealing to business leaders to offer their employees a pay boost even if Congress fails to enact legislation to do so. The timing for Senate consideration of a proposal by Senator Tom Harkin (D-IA) to raise the minimum wage from $7.25 to $10.10 also appears to be in flux, with action now likely in late April or May. Senate Majority Leader Harry Reid of Nevada signaled his desire to take up Harkin’s proposal, but was weighing whether to delay a cloture vote on the motion to proceed to the Harkin bill until after the two-week April recess. A delay in floor action on Harkin’s bill would give more time for negotiations on potential compromise plans, which are being discussed behind the scenes among other lawmakers.

Both the House and Senate will be in session next week.

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On the Hill: UI Extension and Minimum Wage Compromise?

The Senate easily cleared a 60-vote threshold on Thursday to advance a bipartisan extension of emergency unemployment insurance benefits.  With backing from Republicans, the Senate voted 65-34 to end a filibuster against bringing the bill up for debate. It’ll still face the likelihood of another filibuster before final passage, expected next week. Ten Republicans voted with Democrats to advance the bill: Kelly Ayotte of New Hampshire, Dan Coats of Indiana, Susan Collins of Maine, Bob Corker of Tennessee, Dean Heller of Nevada, Ron Johnson of Wisconsin, Mark S. Kirk of Illinois, Lisa Murkowski of Alaska, Rob Portman of Ohio and Patrick J. Toomey of Pennsylvania.  The vote comes 89 days after benefits expired late last year, and since then over two million Americans have been cut off from this critical assistance. House Republican leaders, unfortunately, remain steadfast in their opposition to the Senate bill.

Senate Democrats continue to map out their legislative agenda for the coming months. In early April, they will likely focus on raising the minimum wage and on ensuring equal pay for women. Both measures will likely fall short of the necessary voters but backers hope to draw attention to their importance. Another measure that’s seen as a compliment to efforts to raise the minimum wage is a proposal to increase the maximum Earned Income Tax Credit for childless workers to about $1,400 from $487 currently, and was introduced this week by Democratic Senator Patty Murray of Washington. In keeping with provisions included in the Obama administration’s 2015 budget proposal, Murray’s “21st Century Worker Tax Cut Act” would lower the childless worker eligibility age for the credit from 25 to 21. Murray’s plan would also create a new tax deduction for low-to-middle income families with two incomes and at least one child, allowing a 20 percent deduction on the secondary earner’s income. This would also help increase EITC benefits by reducing earned income for purposes of calculating the credit.

Senator Susan Collins (R-Maine) said on Thursday that she hopes to seize momentum from a bipartisan Senate accord on jobless aid to press for a similar compromise on a more modest increase in the minimum wage. The push for a possible bipartisan minimum wage alternative comes as both parties hunkered down on opposite sides of a proposal (S. 1737) sponsored by Tom Harkin of Iowa to raise the hourly minimum wage by $7.25 to $10.10 in three steps over two years.

Both the House and Senate will be in session next week.

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On the Hill: Prospects for EUC Renewal

Despite last week’s announcement of a bipartisan Senate proposal to extend unemployment benefits, Congress continues to grapple with the issue of extending jobless aid. The Senate compromise announced last week would extend unemployment benefits for five months that would be paid for by so-called “pension smoothing” provisions from the 2012 highway bill and by extending customs user fees through 2024. The compromise also would make unemployment compensation retroactive for workers who lost benefits on Dec. 28, 2013 when the jobless aid expired. Opponents of the proposal are taking issue with that provision, alleging it makes implementation unworkable, an assertion supporters strongly dispute. House Speaker John Boehner cited a letter from the National Association of State Workforce Agencies which warned that the retroactive legislation would be hard to implement, particularly while complying with new requirements, including means-testing so that million-dollar earners do not get checks, in the bill. Most states have warned it would take one to three months to implement the legislation, the association said. Proponents of extending jobless benefits defended the bipartisan proposal, including Senators Jack Reed (D-RI) and Dean Heller (R-NV), who pointed to the fact that Congress has passed retroactive benefits several times before without issue, and argue claims otherwise are just another excuse to deny the extension. The Senate is expected vote on the bill as soon as next week.

Republicans in Congress are unhappy with governors of six states—New York, Connecticut, Rhode Island, Pennsylvania, Montana, and Oregon–who have taken measures to protect more than a combined $800 million in annual Supplemental Nutrition Assistance Program (SNAP) benefits for program participants in their states. Their move was a result of the recently passed farm bill which included $8 billion in cuts to the SNAP program over the next decade, and also reduced the ability of states to boost an individual’s benefits, requiring that an individual receive at least $20 or more in state Low Income Home Energy Assistance Program (LIHEAP) aid, before that individual’s SNAP benefits are automatically increased. In an effort to avoid the cuts, the six governors have directed their states to increase LIHEAP contributions, effectively nullifying the farm bills’ reductions and ensuring households maintain access to SNAP benefits. With more states expected to follow suit, the move has provoked a backlash from Congressional supporters of the SNAP cuts, who are threatening to attempt pass legislation to prevent such tweaks by the states or overhaul the food stamp program entirely.

Both chambers of Congress will be in session next week.

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Introduction of the Fair Employment Protection Act

The Fair Employment Protection Act is one of the few aptly-named bills.  Introduced yesterday by a coalition led by Senators Tammy Baldwin (WI) and Tom Harkin (IA), in the House by Reps. Rosa DeLauro (D-CT) and George Miller (D-CA), it protects workers who are harassed by a supervisor, restoring the definition of supervisor to mean anyone who can control daily activities or take tangible (i.e. anything that affects the employee’s earnings) action against the employee.  Meanwhile, it protects employers who act to prevent and stop reported harassment.

While this seems perfectly sensible, the Supreme Court decided in Vance v. Ball State University that the university was not liable for the Title VII harassment claim because the claimant was harassed by someone who oversaw her daily activities, but was not authorized to hire, fire, promote, demote, or reassign employees.  In the dissenting opinion, Justice Ginsburg highlighted the fact that the Equal Employment Opportunity Commission (created to offer guidance on Title VII) had included those who direct work activities as supervisors.  She also argued against the majority opinion that stated that the Ellerth precedent did not make that distinction, writing that the Faragher and Ellerth precedents had included people who oversee daily activity as supervisors.

The Fair Employment Protection Act would restore the fairness that the June 2013 decision gutted.  The scale of this issue is significant: more than 27,500 people filed charges of gender-based workplace discrimination in 2013. Passing the act would strengthen recourse against workplace discrimination for these (and those subject to other forms of discrimination) by people with authority over them, even when that authority does not include terminating employment.

WOW and several other partner organizations support this Act and other types of workplace protections which improve working conditions for everyone.  Better jobs and gender equity depend on people being able to work without discrimination or harassment, particularly by their supervisors.  The advance of this bill in Congress will mean that workplaces throughout the country will more fully sustain American values of inclusiveness and respect for all people.

- by Mara Furlong, WOW’s Family Economic Security Program Intern

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On the Hill: UI, CCDBG, and PFA

A bipartisan group of senators announced yesterday a compromise to extend emergency jobless aid. The issue of paying for an extension of unemployment benefits had stalled several attempts at renewing the aid since it expired in late December. The proposed plan will extend benefits for five months, including retroactive payments to the unemployed Americans who saw their benefits expire since the end of 2013. The deal, struck by a group led by Democrat Jack Reed of Rhode Island and Republican Dean Heller of Nevada, would be offset by so-called “pension smoothing” provisions from the 2012 highway bill that were due to expire, and by extending customs user fees through 2024. Senate Majority Leader Harry Reid had said earlier that he expected any agreement to come to the floor immediately after the Senate returns from recess the week of March 24. The extension of expanded jobless aid continues to be opposed by some Republicans who contend it does not include sufficient requirements to streamline job training programs and encourage workers to find and take new jobs. Though the Senate deal announced Thursday has tentative bipartisan support, its prospects in the Republican controlled House of Representatives remain uncertain.

The Senate also made progress this week with federal Child Care Block Grant legislation, passing the measure by a 97-1 vote on Thursday. The measure would reauthorize the Child Care and Development Block Grant, which has not been reauthorized since 1996. The program directs about $2.4 billion in discretionary funds and $2.9 billion in mandatory funds in the current fiscal year to the states to help low-income families pay for child care. The measure requires a report from the Health and Human Services and Education departments on how to streamline federal early childhood education programs. Senators adopted by voice vote several amendments, including one from Sen. Rob Portman (R-OH) that would require child care providers’ training to include early language and literacy development, and another from Sen. Elizabeth Warren (D-MA), that would allow funds under the bill to be used to connect child care staff with federal and state financial aid or other resources for training.

Finally, in their broader push to cast a spotlight on income inequality, Senate Democrats plan to link their efforts to raise the federal minimum wage with legislation aimed at ensuring equal pay for women. Leaders in the Senate are planning for floor action in early April on a proposal to raise the minimum wage from $7.25 to $10.10 over two years, with the plan showcasing the impact of the minimum wage on women. Supporters of the wage hike emphasize studies showing that well over 50 percent of minimum wage jobs are held by women and that a raise in minimum wage would help reduce the disparity in salaries paid to men and women. In addition to the minimum wage bill, other Senators are pushing for floor consideration of the Paycheck Fairness Act, legislation that would expand legal options for resolving complaints of salary bias.

Both the House and Senate will be in recess next week, returning on Monday, March 24.

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House Budget Report on Poverty Has Its Own Troubles

House Budget Committee and its chairman, Rep. Paul Ryan (R-WI), issued a new report which claims to assess the value, impact and pitfalls of the nation’s War on Poverty and current safety net programs. The 200+ page report identifies over 90 federal programs that target assistance to low-income families though, and one-by-one reviews their history, current funding levels and empirical evidence of their impact.

For those who have followed Rep. Ryan’s work on this front won’t be surprised to learn that he thinks little of the country’s current patchwork of anti-poverty programs. Benefit cliffs create poverty traps, and the complexity of current programs produces costly, bureaucratic inefficiencies. And few programs address the root causes of poverty: family structure, skill deficiencies, and attachment to the labor force.

Though the size of the report itself is meant to suggest the authors’ command of these issues and the research around these programs, as has been pointed out here and here, the report misleads readers in several ways.

First, and perhaps most importantly, the report continues to make the same mistake of pointing to little progress in reduce our country’s poverty rate and equating that with the ineffectiveness of our anti-poverty programs. Again, the Census’s official poverty measure ignores most of these programs in how it calculates poverty and household income. The new Supplemental Poverty Measure which does account for these programs and better accounts for the true costs that families face demonstrates that these safety net programs cut our country’s poverty rate by ten percentage points over the last 50 years and in half in 2012. These programs have moved tens of millions of Americans out of poverty, yet these statistics are included only passingly at the very end of the Chairman’s report.

Second, the poverty trap of high marginal tax rates (wherein an additional dollar of income leads to a nearly equivalent loss of benefits, disincentivizing additional work) is not, in fact, that much of a trap. Few families actually face steep benefit cliffs and much of the social science research does not support the claim that workers respond to this issue by reducing their work hours or employment.

The report ultimately favors, as the Chairman has said elsewhere, that programs should be reformed to better address labor force participation and emulate the benefits and simplicity of the EITC. Rep. Ryan has said that he favors the UK’s Universal Credit, a means-tested cash assistance program consolidated from six means-tested programs. Reducing complexity has its strengths, but advocates for working families are rightly skeptical of the Chairman’s calls for a major overhaul given his previous budget proposals, in which two-thirds of all savings came from gutting safety net programs.  Similarly, WOW has detailed its hesitation with universal basic income schemes before.

And finally, much of the report’s introduction trumpets the strengths of welfare reform in 1996. Our partners should be well familiar with our issues of claiming this change was a success. For now, we point you to a new piece from ThinkProgress documenting, yet again, why we shouldn’t remember welfare reform as model policy.

In short, the Chairman’s report’s weak grasp of the facts around safety net programs suggests a misunderstanding of the issue of poverty itself, and in turn, a misunderstanding of its sources and proper solutions.

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On the Hill: The President’s Budget

The Obama administration unveiled its budget request for fiscal year 2015 on Tuesday. The President’s $3.9 trillion budget blueprint seeks billions of dollars in new spending to boost economic growth but also pledges to tame the national debt by raising taxes on the wealthy, cutting payments to healthcare providers, and completing comprehensive immigration reform. The budget relies on more than $1 trillion in new taxes to slow borrowing over the coming decade. Some of the proceeds would go toward deficit reduction, however $55 billion would be put toward infrastructure and defense spending, as well as universal preschool education and expanded tax credits for the poor. The budget includes a new Opportunity, Growth and Security Initiative that would direct money into universal preschool programs, the National Institutes of Health, manufacturing institutes, job training programs, and a new parental leave proposal. As was previously reported, the budget does not include a proposal of using less-generous measures of inflation to calculate Social Security benefits, or chained-CPI, which was seen as a potential negotiating chip in previous budget talks with Republicans. Though the odds of the President’s budget achieving Congressional approval are slim to none, the blueprint is significant as it reflects the Administration and Congressional Democrats’ priorities and values in the coming year.

As reported to you yesterday, the president’s 2015 budget proposes eliminating the ONLY workforce program that is dedicated to providing opportunities for women to prepare for and enter high-wage, nontraditional jobs. Women in Apprenticeship and Nontraditional Occupations, or WANTO, supports community-based organizations that provide training to women in pre-apprenticeship programs and technical assistance to employers and labor unions.  WOW will be working to ensure that Congress maintains funding for WANTO in the appropriations process.

One major proposal in the administration’s budget would be to expand the Earned Income Tax Credit (EITC) for low-income childless workers. The EITC and the refundable portion of the Child Tax credit are powerful anti-poverty programs; these two credits lifted 10.1 million people out of poverty in 2012. The President’s proposal would expand the childless workers’ EITC considerably, raising the maximum credit to about $1,000 from its current $500 (which few childless workers are eligible for) and raising the income limit to qualify for the credit from less than $15,000 to about $18,000 in 2015. The proposal would also allow childless adults aged 21 to 25 to qualify for the EITC, a change from current limits making childless adults under 25 ineligible. The proposal would also raise the upper age limit from 65 to 67.  According to the Center for Budget and Policy Priorities CBPP), expanding the childless workers’ EITC would help a diverse group of low-wage workers including store clerks, child care workers, truck drivers and home and office cleaners. Just under half of these kinds of workers are women, and while many are young workers just starting out, CBPP estimates that roughly 35 percent are at least 45 years old. White House estimates suggest an expanded income tax credit of this nature could help 13.5 million Americans.

In keeping with the Senate Democrats’ revised strategy for their agenda focusing on income inequality and helping the middle class, Senate Majority Leader Harry Reid of Nevada laid groundwork this week for taking up a new proposal to extend now expired jobless benefits for six months. The proposal would be paid for using $16 billion in projected savings from the newly enacted farm programs authorization in fiscal 2024. A cloture vote will likely come next week after conclusion of the debate on a reauthorization of child care and development block grants. Reid and his team initially tried to broker a bipartisan deal on a three-month extension of expanded jobless aid, but there has been a continuing disagreement over offsets acceptable to key GOP swing votes in the Senate. Democrats are pressing for a longer, six-month extension that would be funded by future savings starting in fiscal 2024 from the farm programs reauthorization, though Republicans complain that the proposal would use up projected savings in the second decade after enactment of the farm legislation for an extension of jobless benefits that would last less than one year.

Both the House and Senate will be in session next week.

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Expanding the EITC

The Earned Income Tax Credit (EITC) is one of our most effective poverty-fighting tools. According to the Census’s new Supplemental Poverty Measure, the EITC lifted 6.5 million Americans, half of them children, out of poverty in 2012. Unfortunately, policymakers have unnecessarily constrained the value of the EITC for childless adults. The maximum benefit (less than $500, as opposed to nearly $6,000 for married households with three children) and eligibility requirements for these individuals are much less generous, to the point where they are nearly excluded from the program. As the Center on Budget and Policy Priotities underscores, low-income, childless workers are the only group that the federal government taxes into, and in some cases deeper into, poverty.

Raising the maximum benefit for single adults and noncustodial parents and extending eligibility to younger and older adults would help millions of Americans to realize the same benefits the EITC has achieved for low-income workers with children: reduced poverty, increased earnings and labor force participation, improved health outcomes, and more.

Fortunately, lawmakers on both side of the aisle have recognize this fact and made calls recently to reform the program. The President called for this expansion in his State of the Union address, crediting Florida Senator Marco Rubio for promoting the idea. The administration detailed its plan for the expansion in both its proposed FY2015 budget and a separate report released yesterday. The administration proposed to double the maximum allowable credit to $1000 and raise the income eligibility limit from $15,000to $18,000. Lastly, eligibility for the EITC would be expanded to workers as young as 21 and as old as 67. These reforms could increase the credit for childless workers working at the minimum wage by several hundred dollars a year, as the chart from the CBPP below makes clear.

Source: Center on Budget and Policy Priorities

Source: Center on Budget and Policy Priorities

According to the administration, 7.7 million workers would be eligible for a larger EITC, while 5.8 million workers would be newly eligible for the credit. This increase would directly lift 500,000 workers out of poverty and reduce hardship for 10 million more.

Unlike other policy proposals aimed at addressing families’ financial challenges, this one may actually have some political potential. As mentioned, Sen. Rubio endorsed a similar reform last year. In a report issued yesterday, Rep. Paul Ryan contended the EITC is one of our only effective federal anti-poverty programs. Right-leaning critics of the minimum wage have suggested that increasing the EITC is a more targeted and effective way of improving families’ incomes than raising the minimum wage – despite ample evidence demonstrating these policies work together as compliments, not substitutes.

Given its promised benefits and supposedly bipartisan support, whether Congress gives this proposed expansion of the EITC due attention, let alone a yes vote, should be a good test of federal lawmakers’ actual commitment to addressing families’ economic insecurity.

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