President Barack Obama did not equivocate in his State of the Union address recently as he addressed the issue of poverty.
“America is about giving everybody willing to work a chance, a hand up, and I’d welcome a serious discussion about strategies we can all support, like expanding tax cuts for low-income workers who don’t have children.”
What might have seemed like an impossible proposition in light of the ongoing animosity between Democrats and Republicans in Washington D.C., it appeared this is one area where there may be more than a measure of agreement between the two groups.
Apparently, President Barack Obama and Republican Speaker of the House Paul Ryan have very similar plans and both plans call for expanding the Earned Income Tax Credit (EITC) for childless adults. According to advocates, such an increase would incentivize work as a way out of poverty for qualified individuals.
Historically, the EITC has benefited from bi-partisan support because it encourages and rewards work for low and moderate income individuals. According to research, EITC expansions have done more to encourage employment among single mothers with children than any other initiative.
The federal EITC program, as currently designed, excludes a number of workers who are not raising children. In addition, they are completely excluded from the credit if they’re under age 25. It now appears Obama and Ryan are willing to lead an effort to change that—such a change could be significant for America’s working poor. For example, if the change was in effect today, according to the Center on Budget and Policy Priorities, a childless, full-time, minimum wage worker’s 2015 federal EITC would increase from $23 to $542.
It is estimated the plan would lift nearly half a million people out of poverty. Also, according to the Department of Treasury, it would increase the financial stability of another 10.1 million people.