Spotlight Exclusives

June 29, 2009: Religion and Poverty: Obama۪s Budget Addresses Economic Inequality, By Ronald J. Sider, President of Evangelicals for Social Action

Posted on

Over the coming months, Spotlight will host a conversation that asks how and whether religious and faith communities should address the issue of poverty in America and explores the relationship between religion and public policy.

While America enjoyed almost uninterrupted growth between 1945 and the beginning of this century, from 1980 onward, this growth has disproportionately redounded to the wealthy and left lower-income Americans behind. The good news is that the President۪s budget, recently passed by Congress, will take some critical steps toward making our economy one that once again provides all Americans with opportunities to succeed.

For the first four decades after World War II, from 1945-1980, Americans of all income levels grew wealthier and inequality actually decreased. A rising tide truly lifted all boats as both those at the top and those on the bottom benefited. From 1980 through the present, however, economic growth left all but the richest earners behind. From 1979 to 2005, the least wealthy fifth of Americans experienced a tiny one-percent growth in pre-tax income. Meanwhile, the top fifth saw an income increase of 75 percent, with the richest one percent getting a massive 200 percent increase in income.

Promoting more equitable opportunities all the way down the economic ladder helps us realize a more just society, one in which all Americans have access to real opportunities. It is our moral responsibility to return to the type of widespread prosperity we experienced before the 1980s.

The good news is that President Obama۪s new budget seeks to reverse the recent decades-long trend of concentrated economic gain and provide more income and opportunity for lower-income Americansthe people who have been largely left out of the prosperity of the past 30 years.

President Obama۪s budget helps lift up the poor in a variety of ways. First, it offers low-income workers real income opportunity by increasing the EITC and giving families with three or more children a larger tax credit. The budget also makes strides towards raising the minimum wage, a critical issue for low-income workers.

Second, the budget reforms the Child Tax Credit so that it benefits those who need it most. Under the old rules, the credit wasn۪t available for those making less than $10,000 a year. The new budget makes the $1,000 per child credit available to people earning as little as $3,000 a year.

Third, the budget strengthens the building blocks of opportunity by helping low-income citizens attain a postsecondary degree. Along with increasing the dollar amount of Pell Grants and indexing them to inflation, which will add $120 billion over the next 10 years, the budget sets up a $2.5 billion Access and Completion Incentive Fund to help low-income students complete their degrees.

Fourth, the budget offers aid in the form of increased funding for child nutrition, including extra support for the Women, Infants, and Children program, $1 billion a year for the upcoming Child Nutrition reauthorization, and $10 billion in other funds.

Fifth, the budget gets low-income kids on track for future success by doubling funding for charter schools, creating an Innovation Fund to promote new ideas in improving education, and increasing funding for child care, Early Head Start, and Head Start by $4.2 billion.

Sixth and finally, the budget promises $634 billion over ten years to expand health coverage, which is of critical importance for those currently trying to stay healthy and make ends meet while burdened with excessive health care costs.

As is to be expected, the budget isn۪t perfect, and there are ways it does not help those in need share in our country۪s economic prosperity. While increasing taxes for those with very high incomes is mostly justified, reducing the tax deduction for charitable contributions could hurt the poor. And while much of the deficit was inherited from the previous administration and large amounts of spending make sense during a recession, there is a risk that ongoing deficits will burden future generations.

Yet despite these flaws, President Obama۪s proposed new budget could be a historic victory for the poor. Through a variety of strong reforms, it seeks to reverse decades of unfair economic growth and give low-income Americans a seat at the table of shared national prosperity.

Ronald J. Sider is Professor of Theology, Holistic Ministry, and Public Policy and Director of the Sider Center on Ministry and Public Policy at Palmer Theological Seminary. He is also President of Evangelicals for Social Action,a network of Christians seeking to transform church and society in faithfulness to Jesus Christ.

« Back to Spotlight Exclusives