When Rep. Paul Ryan unveiled his anti-poverty plan earlier this year, even some liberals were impressed. I was not among them, because I couldn’t square the good ideas in the plan – such as expanding the earned income tax credit and making it available to childless adults – with Ryan’s budget blueprint, which slashed other poverty programs while cutting taxes for the wealthy. Ryan couldn’t either, so his plan went nowhere.
President Obama even suggested he could work with Ryan and other Republicans on an EITC expansion, but they couldn’t agree on what to cut, or in Obama’s case, how to raise revenue, in order to pay for it, so nothing came of it.
But with House and Senate leaders working on expanding a package of corporate tax breaks, the White House thought it might be time to shore up the EITC. The 2009 Recovery Act temporarily expanded both the EITC and the child tax credit, and Obama is looking for GOP partners to make those expansions permanent. Together, they lift 10 million Americans out of poverty, but if the 2009 expansion expires, the Center on Budget and Policy Priorities says 50 million Americans will lose a significant amount of income, and some will slide back into poverty.
But when Senate Majority Leader Harry Reid and House Ways and Means chairman Dave Camp announced they were nearing a deal on some corporate tax break extensions that are favored by both parties, their agreement didn’t include either the EITC or the child tax credit. The Obama administration threatened to veto the bill if it didn’t include those measures. "Any deal on tax extenders must ensure that the economic benefits are broadly shared," Treasury Secretary Jack Lew said in a statement.
That would seem like a perfect time for Paul Ryan, who’s set to succeed the retiring Camp as Ways and Means chair, to look for a way to work with the president on a goal they share, right? A nice package of corporate tax breaks plus some help for poor people – boardroom liberalism meets neo-compassionate conservatism and they celebrate the holiday season together. What a perfect December story.
But … no. Vox’s Dylan Matthews reports that Ryan wants no part of such a deal. He plans to "respect Chairman Camp’s jurisdiction and defer to the current Ways and Means operation" rather than weighing in, a Ryan spokesman told Matthews. And other Republicans who’ve supported the EITC and the child tax credit say they’re not getting involved, either. Sen. Mike Lee made headlines for proposing a big expansion of the child tax credit, but he won’t push it into the corporate tax extender bill. “Both programs need reform and should be addressed in stand-alone bills,” a Lee spokesman told Matthews. “And the EITC should be coupled with broader welfare reform." Yes, that’s right – more cuts to safety net programs like food stamps and temporary assistance to needy families.
But Democrats haven’t exactly gone to the mat over including help for the poor in the corporate tax bill either. Matt Yglesias reports that Democrats who support the deal say:
The administration and liberal critics in their own caucus aren't thinking realistically about the consequences of failure to reach a deal. They fear a massive backlash from the business community (including elements that are sympathetic to Democrats) without any substantial interest from the mass public that could be leveraged in their favor.
Right, those mushy-headed liberals aren’t “thinking realistically” about the needs of corporate America.
Dissent over the bill from left and right means a long-term solution is unlikely. Ryan announced yesterday that Congress will probably reach a one-year deal and take up longer-term tax relief – for corporations, not poor people – in 2015. "We're just going to do a clean, one-year deal,” Ryan told Reuters. That means a more ambitious bill will be the project of Ryan, the new Ways and Means chief. Maybe he’ll add the EITC and child tax credit expansion? Don’t hold your breath.