What is in store for low-income Americans under a Bush Administration? What victories, if any, can progressives realistically hope to win?
President Bush’s performance is already deeply troubling. So far he looks more like Ronald Reagan than President Bush I. Far-right ideologues are showing up in sub-Cabinet jobs, and little in Bush’s substantive agenda cuts the other way. The Democratic opposition appears unable to gain traction. And a recession seems imminent, a prospect that lends special urgency to the fast-approaching time limits imposed by the 1996 welfare law.
The new Administration has proposed a tax cut that would wipe out the non-Social Security portion of the surplus and take us back to an era of deficits, lining the pockets of the rich and (shades of Reaganomics) making it impossible to find money for important social programs. Bush would do little for those in the lower middle and nothing at all for a large cohort at the bottom. He has put forward a “faith-based” initiative that raises serious constitutional questions and seems intended as the one solution to complex problems that in fact require multifaceted answers.
A tax cut of the right size–one that leaves room for debt retirement and needed spending–should provide relief for people all the way to the bottom of the income ladder. In other words, the tax discussion should include the first antipoverty debate of the new Administration.
It’s true that some good tax policy at the lower end may come without a real debate. Indeed, the occasional success of antipoverty initiatives over the past two decades has been accomplished mainly by stealth, buried in other legislation or at least not highly publicized. Congressman Henry Waxman’s expansions of Medicaid for children in the late eighties, President Clinton’s expansion of the Earned Income Tax Credit (EITC) in 1993 and the work of Senators Orrin Hatch, Ted Kennedy and others on the Child Health Insurance Program (CHIP) in 1997 all largely occurred beneath the radar. And it is entirely possible that down the road, Democrats and a few moderate Republicans on the House Ways and Means and the Senate Finance committees will slip in some modest assistance for the poor and near-poor in a tax bill without much being said about it publicly.
But it would be better, I think, if we were to have a public discussion (although it is possible that given the nasty state of our current politics, a public airing of the issues could create a backlash against even modest steps).
What antipoverty measures should be part of any tax reform bill? There are at least three that are both feasible and urgent, although it will be necessary to calibrate them so they interact properly.
The first is to improve the EITC. It does a lot of good now, adding nearly $4,000 to the $10,000-plus income of a minimum-wage worker with two children. But the EITC is less effective when a family has three or more children and when both parents are present. The EITC falls short of getting families with three children out of poverty if their income is equal to one minimum-wage job, and it isn’t any higher for two-parent families than one-parent households even though the former’s living costs are clearly higher. These problems should be fixed.