Washington Post, September 5, 2007: The War on Poverty

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NEW YORK Mayor Michael Bloomberg says he is not running for president. Yet that didn’t stop him from coming to Washington last week to promote an expansion of the earned-income tax credit as the next phase in the war on poverty. The EITC has been around since 1975 and is widely considered the single most important and effective policy for reducing poverty. According to a 2006 report from the Brookings Institution, “In 2003, the EITC lifted 4.4 million people in low-income, working families out of poverty, more than one-half of them children.” Mr. Bloomberg is right to focus on its expansion.

In a speech at the National Press Club, Mr. Bloomberg, a billionaire former Democrat, former Republican and now independent who many believe is mulling a White House bid, noted that welfare reform and the EITC “incentivized work among women with young children.” But, he said, “fathers are missing from our strategy to drive down the poverty rate.” He proposed to triple the size of the maximum credit received, to $1,236 per year, and to eliminate the marriage penalty now at work. He would raise the maximum income for EITC eligibility from $12,100 to $18,040 and lower the qualifying age from 25 to 21, to make stable employment more attractive to young men. And he would make the EITC expansion off-limits to fathers who are behind on child-support obligations.

Though Mr. Bloomberg’s proposal is unusually well fleshed-out, he’s not alone in focusing on the earned-income tax credit; all of the major Democratic presidential candidates, and particularly former senator John Edwards (N.C.), who has built his campaign around fighting poverty, view it as an important tool to boost low-income Americans into the middle class. Mr. Edwards and Sens. Hillary Rodham Clinton (D-N.Y.) and Barack Obama (D-Ill.) also have proposed junking the marriage penalty, albeit in different ways. They all have advocated tripling the credit. Ms. Clinton also would lower the qualifying age from 25 to 21, and Mr. Obama also focuses on delinquent fathers — but with a carrot, rather than a stick: He would give those fulfilling their responsibilities a benefit of $1,110.

Mr. Bloomberg would require childless adults to work a minimum of 30 hours a week for 26 weeks out of the year to be eligible for any credit. He said this would create an incentive for “sustained, full-time work.” But the Center on Budget and Policy Priorities cautions that this could have the unintended consequence of reducing work incentives for lower-skilled, less-educated men who have difficulty securing full-time, full-year jobs.

All of these ideas will be fleshed out further on the campaign trail and on Capitol Hill, where House Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) would play a big role in shaping any expansion of the EITC. Would that the Republican candidates were engaged in the conversation in a more meaningful way.

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