And Another Thing . . .

Dog-piled again by what I call the Twitter Policy Institute, Matt Bruenig’s army of followers. Many are computer techies, musicians, poets, and other free-spirited souls, few have a clue about public policy. I can identify. I was an English major and thought I knew politics. It was great to be young and insane. They criticize texts without reading them, based on tweets by anyone they trust. Within Twitter, it’s impossible to deal systematically with all the foolishness thrown into those threads, hence this response.

Briefly about Matt: we broke bread following his professional defenestration by the D.C. pwogie policy elite. I have praised his work in the past. I try to be supportive, but not uncritical. He can be easily provoked, can’t we all.

The latest imbroglio is about how to guarantee minimum incomes. I did a piece for In These Times celebrating the new Child Tax Credit and urging the defense of means-tested benefits such as the Earned Income Tax Credit (EITC). Matt has been on jihad against the EITC for some time now, usually on spurious grounds. I’ve commented on this in the past.

The focus of the argument in the wake of my ITT piece was on the phase-in of benefits under the EITC. A phase in means that labor earnings are matched at some rate by the government in the form of cash assistance, up to some limit. Matt hates the phase in, arguing that 1) it excludes the poorest families, 2) it was designed that way out of malevolence towards such families, and 3) it is inferior to universal benefits without any means test.

These are really bad arguments. Their core is that the EITC (and logically, all means-tested benefits) are bad because they are not universal. Universal is good because it means more benefits for all, and that fact means that they are politically robust.

I like more benefits for all. The question is how to get them. The fact is that there are no permanent, universal cash benefits, anywhere in the world. There are experiments and temporary programs, and there is the Alaska Permanent Fund benefit. That’s it. That should cast doubt on the political invulnerability of money for everybody. In my article I explained why their purported ease of administration and political acceptance are a mirage.

Matt is obsessed with “trapezoidal programs.” That means benefits that phase in and out, in other words benefits that require labor income to qualify (among other stipulations) and wither away at higher levels of income. I’m afraid there is much more to the nature of these programs than their formulaic character. The trapezoidal obsession is reductionist, the way an economist might think.

The EITC was instituted to encourage work on the debased reasoning that the poor need incentive to work and be self-supporting. Without doubt, some may have supported it out of scorn for the poor (Matt’s #2 objection), though that doesn’t make much sense. If you hate the poor, why support any benefit? Why would hatred fall away for someone with an income of half the minimum wage?

We might suppose that the hatred is limited to those with zero labor income, though if the thought of someone not working and getting government support is objectionable, from that malign standpoint, anyone making very low earnings may still not be working up to his or her limits. Why would they be deemed deserving?

The likelihood is that the work requirement was either accepted as a political expedient, a pretense for providing cash aid, since most of the poor work to some extent, when they can, or out of misguided “tough love.” It also means a less expensive program, and in an environment of competition for budgetary resources, more for other things.

What about eliminating the EITC phase-in? An EITC without a phase-in makes no sense. What would constitute eligibility? A dollar of earnings? The real criticism here is that the EITC is not a UBI. We could call that a Universal less-than-Basic Income (“ULTBI”). That reveals that the underlying dispute, notwithstanding protests to the contrary, is really about the EITC vs. some kind of UBI.

The new Child Tax Credit has no phase-in and only phases out at a much higher income. As such it is not really comparable to anti-poverty programs. It is closer to a UBI though it is neither ‘basic’ in the sense of providing a family with an adequate minimum income, nor universal in the sense of being available to everybody.

The Biden Administration will be proposing to lengthen the legislative lifespan of the new CTC. I would say politically, the opening the new CTC provides should be exploited to cement it to remain fully in effect well beyond the current year, and to widen its eligibility standards. That’s what the advocates are fighting for now. Throwing shade on the EITC (which Biden also expanded) because it isn’t a UBI, or a ULTBI, is a distraction with a small risk of facilitating the use of the EITC as a ‘pay-for’ to buttress the CTC.

It’s good to have ambitious goals, even utopian ones. They stimulate thought. But it is a mistake to confuse them with actual struggles that are in progress. That is preserving the gains in the American Rescue Plan, including extending the expansion of both the CTC and the EITC.

Some will quibble that an expansion of only four years is unsatisfactory, but that is due to stupid budget rules, a different and larger battle that I address here.

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