- “Romney will take plenty of hits for his apparent disdain for half of the country,” says @AEI’s Ornstein.
- The EITC, along with other tax cuts for low earners, were ways to reduce welfare but were also done to exalt work.
- Not only does the basic problem remain, but it is getting worse as fundamental income inequality grows.
It is hard to think about, or address, anything other than Republican presidential nominee Mitt Romney's remarkable videotaped comments at a private fundraiser that came to light this week. Never mind his statement that he got no advantage from his rich parents; that the "silver spoon" he was born with was just being born in America (which evoked former Texas Gov. Ann Richard's comment about George H.W. Bush, that he was born on third base and thought he hit a triple).
What I want to address is the more publicized comments about the 47 percent. A partial transcript: "There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for the president no matter what. ... These are people who pay no income tax. ... So my job is not to worry about those people. I'll never convince them that they should take personal responsibility and care for their lives."
"For decades, going back to Presidents Richard Nixon and Gerald Ford and continuing through Ronald Reagan and the two George Bushes, Republicans were champions of the earned income tax credit, which began in 1975 and was expanded in the 1986 tax reform, again in 1990, 1993 and 2001." The Tax Policy Center (per Brad Plumer of the Washington Post) notes that of the 47 percent of Americans who pay no income tax, more than 60 percent pay payroll taxes. What about the rest of the 47 percent? A bit more than 10 percent are elderly, and 7 percent are non-elderly with incomes of less than $20,000.
Romney will take plenty of hits for his apparent disdain for half of the country, including the poorest of the elderly in America. What struck me first about it was the slap at the working poor. For decades, going back to Presidents Richard Nixon and Gerald Ford and continuing through Ronald Reagan and the two George Bushes, Republicans were champions of the earned income tax credit, which began in 1975 and was expanded in the 1986 tax reform, again in 1990, 1993 and 2001.
Why was the EITC popular in Republican ranks? Because conservatives wanted to reward work and to try to make sure that low-income people who did work, who put in their 40 hours or more, were able to fulfill the basic social contract - work hard, you will have a roof over your head and food on the table. The EITC, along with other tax cuts for low earners, some done as trade-offs to get tax cuts for higher earners, were ways to reduce welfare but were also done to exalt work. And the fact is that the EITC and the Bush tax cuts have more to do with that 28.3 percent who work and do not pay income taxes than anything else.
It tells us a great deal about what has happened to the Republican Party that policies supported by both parties and designed to keep people working and letting them have the basic things that a family needs are now viewed with disdain; that these people working 40 hours a week are now called "takers" who "won't take personal responsibility and care for their lives."
In the old days, work was exalted. There was a real understanding that a family of four with one or two breadwinners at or near the minimum wage, living on the edge from paycheck to paycheck, would not be able to make basic ends meet and would need some help. The EITC was the least obtrusive and bureaucratic way to do so. Now, work itself is disdained if it is not attached to the makers of wealth, but instead applies to those described as takers.
Not only does the basic problem remain - how can we as a society fulfill the social contract that if you work you will be rewarded at least with basic sustenance - but it is getting worse as fundamental income inequality grows. And what is missing from Rep. Paul Ryan's budget and its underlying philosophy is anything to replace it. Cutting taxes and cutting the pins out from under the other programs, from job training to Pell Grants, that help working families get by, without some coherent way other than just saying cut government and cut taxes is not a substitute. And beyond the huge political gaffe by Romney, this is a giant societal problem that needs at least a conservative response better than what we are getting from the candidate or his allies in Congress.
Next comes the problem of the elderly poor, many of whom are the so-called dual eligibles, on Medicaid and Medicare, often with serious disabilities. I have written before about the problems we have coordinating the two programs, how costly it is and how much we need reform. But a plan simply to cut Medicaid by 30 percent and block grant it to the states will only exacerbate these problems, and to call the disabled elderly poor leeches on society is either ignorant or cruel or some combination thereof. But it is not a solution to a sizable societal problem.
Finally, let's deal with those who are unemployed. At one level, Romney and his Congressional counterparts have evinced great empathy for the unemployed and outrage that President Barack Obama has not done more to get them jobs. But in the most serious sustained downturn since the Great Depression, one caused by a financial crisis, jobs are not easy to find, and many Americans who desperately want to work cannot find them. For them, especially as unemployment benefits wind down, keeping their homes and putting food on the table is a huge problem, and more and more are showing up at food banks (which are also struggling) and relying on food stamps. The narrow-minded blockage of the farm bill in a zealous desire to cut even more from the food stamp program is appalling. But it is the Romney mindset - food stamps are for takers and they don't deserve it - that fuels that desire.
Norman Ornstein is a resident scholar at the American Enterprise Institute.