Student's Guide to Landmark Congressional Laws on Social Security and Welfare

By Steven G. Livingston | Go to book overview
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17

The Earned Income Tax Credit

The Earned Income Tax Credit (EITC), perhaps the least controversial American antipoverty program, has also become one of its most important. In monetary terms, it provides as much assistance as the Food Stamp program and the Temporary Assistance for Needy Families (TANF) program combined. While other poverty programs remain controversial, and are always targets for budget cuts, the EITC has kept its political popularity. Presidents as politically opposed as Ronald Reagan and Bill Clinton have been great supporters of the program. The reason for the program's popularity is that it is explicitly directed at the “working poor.” Through the EITC, low-income workers receive a tax credit that reduces the income tax they owe. In 2001, for example, a family that earned less than $31,152 could receive a tax credit that reduced their income tax by up to $3,888.1 Individuals who are poor, but work, have long received the sympathy of both the American voter and the American politician. The EITC appears to reward personal effort, separating it from other programs targeted at the poor. Even though half of EITC benefits go to those below the poverty line, it has never come to be seen as a “welfare program.” The unique popularity of the program means that efforts at welfare reform have increasingly come to rely upon it.

The origins of the EITC lay in the collapse of Richard Nixon's Family Assistance Plan (FAP). As may be recalled, a chief opponent of the FAP was Louisiana Senator Russell Long (Dem.). As chair of the Senate Finance Committee, he all but scuttled Nixon's plan. Sen. Long's complaints were many, but they centered on his dislike

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