The Clinton expansion of EITC dumped money into the pockets of the working poor. Nobody was forced to work more to get the credit. There is no empirical evidence of a wage effect, and there is plenty of evidence of a positive income effect.
It's true that Congress dramatically stacked IRS enforcement at EITC claimants. But the money has gone out regardless. In speaking of health care cost inflation, we should distinguish between price increases for existing services and the introduction of new more expensive services. I don't know how it splits up. In either case, more dough has been expended. Much more. The original premise of my comment is that spending under existing programs tends to grow. Where it goes is another matter. Re: the drug benefit, all the liberal angst about the program prior to passage seems to have evaporated in the wake of its passage. Moreover, lawmakers are falling over themselves now trying to expand it (get rid of the 'donut hole'). There are fits and starts, but in general old programs roll on. They don't always get better, but they tend to get more expensive. On Fri, Dec 18, 2009 at 2:01 PM, Jim Devine <[email protected]> wrote: > 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. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
