Ever since Marco Rubio delivered his Big Poverty Speech at AEI yesterday, I’ve been looking for a serious analysis of his two Big Ideas—well, actually, just one of them, because you don’t need to be a social policy wonk to understand that his “Flex Fund” proposal for turning over federal funding for anti-poverty programs to the states is the old dump-and-run block grant scheme with a new name.
But Rubio’s “federal wage enhancement” proposal—which may overstate its seriousness, since he provided few if any details—is a bit different. It involves replacing the Earned Income Tax Credit with some sort of direct federal wage subsidy, open in theory to all low-income workers regardless of family status. It doesn’t sound very Republican, does it?
But Jared Bernstein suggests otherwise:
Your first thought, like that of everyone who’s asked me about this today, is probably um isn’t the EITC already enhancing the value of work for millions of low-income workers? Yes, but what Sen. Rubio appears to be up to here is targeting the so-called marriage penalty-the idea that since EITC eligibility is based on family income, combining incomes through marriage can lead formerly eligible workers to lose eligibility.
But it sounds to me like he’s losing the income targeting of the program and will end up shifting current EITC spending away from single parents with kids to married couples with kids (along with childless adults, who get little-too little-from the EITC). Given that kids in single parent families are already more likely to be poor than those in married families, the only way this idea could not increase child poverty would be if he spent considerably more on it than is being expended on the EITC. And that’s not likely what he’s got in mind.
No, it’s not, particularly given Rubio’s manifest desire to repair his relationship with conservative activists enraged by his advocacy of comprehensive immigration reform last year.
Bernstein also points out that Rubio’s “Flex Fund” proposal (aside from the huge peril involved in turning over poverty-fighting to states governed by, say, Rick Perry, who seems to think poor people should be happy with whatever “job creators” decide to give them) would almost certainly destroy the “counter-cyclical” features of the current safety net, wherein funding automatically goes up as the need for it surges. So while Rubio should get some credit for proposing something other than enterprise zones, sub-minimum wages, and the direct “liberation” of the poor from any sort of assistance, there’s almost certainly less there than meets the eye. And it’s perhaps a crowning irony that he’s going after the EITC, an immensely successful policy that is one of the very few out there with Republican fingerprints on it, however faded.
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