Max B. Sawicky wrote:
> Regarding TANF ('welfare'), the "cash caseload" was slashed but other
> benefits to the poor have increased (EITC especially). I am not saying the
> system was improved, only that the natural dynamic of $$ expansion was not
> thwarted by reform. <
EITC is a wage subsidy so that "families [mostly mothers] with
dependent children" do not benefit unless they cut back on time and
effort taking care of their kids (or spend their scarce resources to
get others to do this work) to get a paid job. The same is true of
TANF. Also, as a wage subsidy, to some extent the EITC (along with
TANF) increases the supply of labor-power and (all else constant)
lowers wages. To some extent, the EITC money going to workers ends up
padding their employers' bottom line.[*] Third, I've noticed that
Congress has aimed much more of its ire at those accused of EITC fraud
than at the rich (whose estate tax is currently going away). I can
imagine that EITC enforcement standards have been ramped up.
> We forget spending on Medicaid has grown substantially too, supplemented by
> SCHIP. <
To what extent has the growth of money spending on these programs been
canceled out by rampant health-care cost inflation (which is
significantly faster than CPI inflation)?
> What has also expanded among entitlements has been social insurance, not
>least because of G. Bush.<
you mean the Medicare prescription drug program? that's a positive thing?
> I wouldn't go shouting it from the housetops, but the right-wing fear
> of ANY health care reform bill growing in cost is not irrational.
there is inertia in the system, so that any program that's been
established and has a broad political base (e.g., Medicare, OASI) will
continue until there's a big effort by its enemies to abolish it. But
programs that help the poor have much less of this inertia, since they
have much less political power than (say) the elderly.
--
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
[*] an important factor limiting this effect is the minimum wage. But
it has fallen significantly behind inflation.
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