Congress Bilks Poor

Delay in EITC payments would mean cuts for working poor

Have pity on the Republicans in Congress. While their leaders were holding a press event under a large 'Stop Robbing Social Security' banner, their own accountants were wistfully admitting that the GOP budget would in fact be "robbing Social Security" to the tune of $7.6 billion next year. The Congressional Budget Office, using more respectable accounting, calculated an even higher number of about $18 billion. Faced with that kind of shortfall, the Congressional Republicans chose a desperate and despicable strategy: fix the numbers, and let any attendant suffering fall on the poor.

The GOP had pledged so often to balance the non-Social Security budget and stay within preset spending caps that something had to be done. With defense and highway spending on the rise, the brunt of the cuts fell on health, education, and social service programs, but billions of dollars still remained to be accounted for.

The first technique the House leadership employed was to take perfectly predictable expenses, like planned defense appropriations and the 2000 Census, and call them "emergency" spending, which is outside the caps (but still must come from other revenues, like Social Security). With the second technique, known as "directed scorekeeping"--described by one Federal budget expert in private practice as "lying about the numbers"--they were able to get rid of over half of the remaining deficit.

The last few billion, however, proved the hardest to hide. So on Sept. 29, the House leadership revealed its intention to pay out the Earned Income Tax Credit, a program which rewards the working poor as they work additional hours, on a monthly basis rather than at the start of the year. This means that the payments for October, November, and December of the year 2000 would go on the fiscal year 2001 budget, turning about $9 billion in costs into the next Congress' problem. That means that GOP leaders can claim to have a $400 million surplus without touching Social Security, as long as no one looks at next year's books.

In a sense, the proposal's only virtue is its biggest liability: it doesn't reduce the tax credit, but only delays the payment until next year--the problem of being over budget still isn't solved. Regardless of the problems it will cause for next year's budget, the proposal also has the immediate disadvantage of forcing the working poor to wait months for tax refunds that they have earned. The money from the EITC is often used to pay down debts or saved to generate interest, and to the working poor, if not to the government, a delay does mean a cut.

The move generates a meager political benefit at a substantial public cost. White House officials have called it "a forced interest-free loan to the Government." Some Republicans in Congress have also objected, and Texas Gov. George W. Bush has opposed the delay, saying that it would be wrong for Congress to "balance their budget on the backs of the poor."

It is saddening that the Republicans would look to delay tax credits which support people in the workforce and which have consistently been shown to encourage work rather than welfare. It is more saddening that this move would come at the same time that other money is being spent for wealthier, more powerful constituencies: Senate majority leader Trent Lott is currently attempting to secure $500 million for an extra aircraft carrier to be built in his home state of Mississippi, and Sen. Kay Bailey Hutchison (R-Tex.) has just passed an amendment to save the oil industry $66 million a year in royalties owed to the public.

Because of a stopgap measure to keep the government running, Congress has until Oct. 21 to get a budget passed or there will be another government shutdown. It is time for the Republicans in Congress to stop playing budget games and start to recognize that the spending caps are unrealistic. Helping people is more important than saving face.