For months now, as congressional Republicans have blocked repeated attempts to extend benefits to the long-term unemployed, as they’ve fought to deny low-income Americans access to health insurance, as they’ve advocated to cut tens of billions from the food stamp program, as they’ve resisted proposals to raise the minimum wage, they have simultaneously professed their commitment to American workers and the poor.
Senator Patty Murray put forth a new test of that commitment on Wednesday, by introducing legislation to expand the Earned Income Tax Credit. The EITC is already one of the largest and most effective anti-poverty programs, rewarding low-wage earners for their work and lightening their tax burden. It’s also one of the very few specific anti-poverty policies Republicans have praised in recent months.
Murray’s bill, the “21st Century Worker Tax Cut Act,” would increase the maximum credit for childless adults and create a new tax deduction for families with two working parents. It's intended to complement the Democrats’ campaign for a higher minimum wage, and to force Republicans to take a real stand on help for American workers. Given their recent nods towards the EITC, one might reasonably expect Republicans to consider Murray's proposal seriously. (President Obama also proposed an EITC expansion in his budget for 2015.) Even the tax loopholes Murray proposes closing in order to pay for the expansion have already been singled out for elimination by the Republican chairman of the House Ways and Means Committee, Robert Camp. But these are not reasonable times.
The Republican’s recent expressions of support for expanding the EITC have always seemed more opportunistic than sincere. Rather than actively working to extend the credit to more Americans, the GOP instead uses the EITC as “a protective shield against populist attacks,” as Jonathan Chait put it; specifically, as a counterpoint to calls from the left to raise the minimum wage.
“The minimum wage makes it more expensive for employers to hire low-skilled workers, but the EITC, on the other hand, gives workers a boost—without hurting their prospects,” Representative Paul Ryan said of the EITC in a January speech at the Brookings Institution. “It gives families flexibility—it helps them take ownership of their lives.”
Conservative pundits and academics have taken a similar line. Two economists at the American Enterprise Institute argued last year that “expanding the earned income tax credit is a much more efficient way to fight poverty than increasing the minimum wage.” Steve Moore of the Heritage Foundation argued in favor of a higher EITC in January, as did former Bush advisor Glenn Hubbard. Another former Bush advisor, Harvard economist Gregory Mankiw, wrote recently that the EITC was “distinctly better” than raising the minimum wage because the costs are born by taxpayers rather than employers.