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A Better Poverty Fighter Than Raising the Minimum Wage

As Published in the Wall Street Journal 8-12-2014

Expanding the Earned Income Tax Credit for childless adults would put money in pockets without hurting jobs.
Aug. 11, 2014 7:35 p.m. ET
When Rep. Paul Ryan in July announced new proposals to fight poverty, he may have also found a way to settle the debate about raising the minimum wage. His plan to expand the Earned Income Tax Credit for childless adults would boost take-home pay and fix a hole in the social safety net without hurting jobs. That’s a compromise that Democrats and Republicans can support.

President Obama wants to raise the minimum wage to $10.10 from $7.25. But the Congressional Budget Office released a report in February estimating that this higher wage would eliminate 500,000 jobs. For the past five months, proponents of the president’s proposal have been working to rally public opinion. The labor union-backed group Americans United for Change launched a nationwide bus tour this spring to promote the wage hike. Last month, a coalition of more than 60 advocacy organizations kicked off a public challenge to live on the federal minimum wage for a week.

Many Democrats plan to make the minimum wage an issue to boost voter turnout in the midterm election and have no interest in negotiating the $10.10 figure. Others seem more inclined to compromise: West Virginia Democrat Sen. Joe Manchin, for instance, told MSNBC in May that he’s “willing to sit down and talk about anything that’ll raise” the minimum wage above $7.25.

But even a modest wage increase would have immodest consequences. Increasing the minimum wage to $9 an hour would cost roughly 100,000 jobs, according to CBO estimates.

U.S. Rep. Paul Ryan Associated Press
Enter Mr. Ryan’s proposal. The EITC, a refundable tax credit for low-income households that phases out as income rises, helps the working poor without imposing a harmful mandate on employers. But the EITC has one major weakness: Under current law, the size of the credit is dramatically smaller for individuals and families without children.

For instance, a single mother with two children who works part time for the federal minimum wage receives nearly $4,500 in additional income from the EITC. That’s a 40% increase in take-home pay, bumping her hourly wage to $10.15 an hour from $7.25. But a single woman without children who works the same hours for the same wage takes home $265 in EITC benefits annually—a 2% increase in take-home pay.

Mr. Ryan’s plan would close that gap. His proposal, as described in a House Budget Committee draft, would double the credit that childless adults receive as a percentage of their eligible income—to 15.3% from 7.65%. It would also lower the age of eligibility to 21 from the current 25, and raise the income threshold for receiving the maximum credit to $11,500 from $8,220. The results are significant: A childless adult who now receives $265 annually would take home $1,005 a year under Mr. Ryan’s plan. That’s roughly the equivalent of raising their minimum wage to $8 an hour.

It’s not just good politics; it’s good policy. Mr. Ryan’s proposal would reach childless adults in poverty whose hourly wage nevertheless exceeds $10.10. (A 2010 study in the Southern Economic Journal, sponsored by the Employment Policies Institute and conducted by economists Joseph Sabia and Richard Burkhauser, found that 25% of hourly employees in poverty earn $12 an hour or more.) It also circumvents another problem with using an increase in the minimum to reduce poverty: Only 18% of the benefits from Mr. Obama’s wage proposal would go to minimum-wage earners living in poor families, as David Neumark explained in these pages last month.

A direct payment from the IRS, on the other hand, goes straight to its intended beneficiaries.

The EITC program has its share of flaws. A 2014 report by the Treasury inspector general for tax administration estimated that up to 26% of the program’s payments in fiscal 2013 were made in error. Mr. Ryan’s proposal also acknowledges the problem (not unique to the EITC) of marginal tax rates, where the loss of benefits from safety-net programs creates perverse incentives for low-wage earners.

Coping with these challenges means improved enforcement strategies for the IRS and perhaps a slower phaseout rate for the EITC. But an imperfect partial subsidy that rewards work is still preferable to the jobs lost as a consequence of a higher minimum wage.

Mr. Ryan’s plan is a better solution and a win for both sides of the aisle. Democrats can point to a progressive tax policy that provides substantial gains for low-income workers, and Republicans can boast of raising wages without burdening employers.

Mr. Saltsman is research director at the Employment Policies Institute, which receives support from restaurants, foundations and individuals.

Dinesh D’Souza SLAMS Pres Obama’s ➡ Obama Sees America As An Evil Child Molester Or Serial Killer

POST OFFICE REFORM IS REAL and IT’S FROM DARRELL ISSA

post_office-300x240
Darrell Issa has been waging an under-the-radar campaign to save the Postal Service for years now. The most recent iteration of his plan, the Postal Reform Act, would save $17 billion over the next ten years for the USPS. The major changes would be giving the USPS the ability to eliminate Saturday delivery and encouraging curbside rather than doorstep drop-offs.

Additionally, it would eliminate what the postal workers’ union has claimed is the major deficit on the USPS budget: a requirement that the USPS pre-fund retirement benefits to the tune of over $6 billion per year.

In both eliminating the pre-funding requirement and giving the USPS the ability to be more flexible with their mandates, Darrell Issa’s reform should hit all the right buttons. And the Committee for a Responsible Federal Budget wrote up the CBO score for Issa’s bill favorably:

The bulk of the savings would come from two changes in mail delivery. The first would authorize the Postal Service to eliminate Saturday mail delivery, which CBO expects it would do, saving $11 billion over ten years. The second would require the USPS to increase the use of curbside and centralized delivery, rather than delivering directly to people’s doors. This change would save $8 billion. In addition, the bill would save smaller amounts from eliminating annual appropriations to reimburse USPS for free and reduced-rate mail ($800 million) and from increasing rates on bypass mail delivered to Alaska ($170 million).

The Postal Reform Act represents a responsible approach to fixing the Postal Service’s finances. Congress should not hesitate to act, especially given the trouble the USPS is having in meeting its contribution obligations for future health benefits.

I’ve written more about the Post Office and the prospects for reform here.

Rubio: There’s No ‘Responsible Way’ to Smoke Pot

RubioSen. Marco Rubio (R-Fla.) said asking whether a politician has ever tried marijuana is a “worthless question” in American politics.

Rubio, a potential 2016 candidate for president, has consistently dodged the question about if he experimented with the drug as a younger man. In an interview that aired Monday from ABC News-Yahoo News, Rubio reiterated that answering the question honestly is a lose-lose.

“Here is the problem with that question in American politics,” he said. “If you say that you did, suddenly there are people out there saying it is not a big deal, look at all these successful people who did it. And I don’t want my kids to smoke marijuana. And I don’t want other people’s kids to smoke marijuana. I don’t think there is a responsible way to recreationally use marijuana. On the other side of it, if you tell people that you didn’t, they won’t believe you. So it is just a worthless question.”
He added: “I understand it is a question today that people think they need to ask, but the bottom line is, I don’t think people should smoke marijuana.”

The Florida senator said he decided against answering the question after a conversation he had following the publication of his book, An American Son, in which he wrote about his mediocre grades in high school.

“Someone came up to me and said, ‘You know, I enjoyed your book, but I want you to know, my son came up to me and said he doesn’t have to get good grades in high school, because look at Marco Rubio, he didn’t do well in high school and look how successful he’s been,’ ” he said.

Rubio, an opponent of legalization, made similar comments earlier this year.

The drug has been decriminalized in a number of states and legalized in Colorado and Washington. Rubio said federal law drug laws should be enforced there.

“And the bottom line is, I believe that adding yet another mind-altering substance to something that’s legal is not good for the country,” he said. “I understand there are people that have different views on it, but I feel strongly about that.”

Read more: http://thehill.com/blogs/blog-briefing-room/206479-rubio-pot-question-worthless-in-politics#ixzz32Yqp61x1
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Rubio Successfully Blocks Nomination Of Gay Black Judge

by:javier-manjarresRubio-DC
Senator Marco Rubio (R) has successfully blocked the appointment of what would have been the first openly gay black man to wear a federal judge’s robe.

The White House confirmed that President Obama would not be reintroducing Judge William Thomas’ nomination to the U.S. Senate, because the initial nomination was “returned by the Senate and Senator Rubio”

Back in July 2013, the Shark Tank reported that the reasons why Rubio was blocking a judge he first recommended to the President, was because of his “past record on the bench.”

Here is what we wrote:

Rubio’s office is quiet about the nomination, but a source very close to the nomination pointed to the Shark Tank via text mail, the probably reasons why Rubio is holding up Thomas’ nomination. The text points to the judge’s past record on the bench, a DUI case, as well as a link to a high profile murder case, as being the reasons why Rubio is most likely holding up the nomination.

The Tampa Bay times reported that Rubio was concerned about “his involvement in a controversial case in which a man was given a sentence of just 364 days in jail for the hit-and-run death of a cyclist.” Thomas light sentence came down because he was concerned about the driver’s blood disorder that would put the offender at risk of further suffering and possibly death, were he to be jailed any longer.

The murder case in question is about the 2006 murder of a 18-year-old girl that was kidnapped, raped, and executed by 5 thugs, who confessed to the crime, but whose confessions were thrown out by Judge Thomas.-Shark Tank
Senator Marco Rubio (R) has successfully blocked the appointment of what would have been the first openly gay black man to wear a federal judge’s robe.

The White House confirmed that President Obama would not be reintroducing Judge William Thomas’ nomination to the U.S. Senate, because the initial nomination was “returned by the Senate and Senator Rubio”

Back in July 2013, the Shark Tank reported that the reasons why Rubio was blocking a judge he first recommended to the President, was because of his “past record on the bench.”

Here is what we wrote:

Rubio’s office is quiet about the nomination, but a source very close to the nomination pointed to the Shark Tank via text mail, the probably reasons why Rubio is holding up Thomas’ nomination. The text points to the judge’s past record on the bench, a DUI case, as well as a link to a high profile murder case, as being the reasons why Rubio is most likely holding up the nomination.

The Tampa Bay times reported that Rubio was concerned about “his involvement in a controversial case in which a man was given a sentence of just 364 days in jail for the hit-and-run death of a cyclist.” Thomas light sentence came down because he was concerned about the driver’s blood disorder that would put the offender at risk of further suffering and possibly death, were he to be jailed any longer.

The murder case in question is about the 2006 murder of a 18-year-old girl that was kidnapped, raped, and executed by 5 thugs, who confessed to the crime, but whose confessions were thrown out by Judge Thomas.-Shark Tank

Rubio’s office, ala Brooke Sammon, stuck to script and pointed to Rubio’s past comments as to why he was hell-bent on blocking Thomas.

“The nomination of Judge Thomas has also been thoroughly reviewed, and Senator Rubio has determined that Thomas’s record on the state court raises serious concerns about his fitness for a lifetime federal appointment. Those concerns include questions about his judicial temperament and his willingness to impose appropriate criminal sentences, particularly in the two high-profile cases of Michele Traverso and Joel Lebron last year. After reviewing Thomas’s record, Senator Rubio cannot support moving forward with the nomination,” Sammon said. -HuffPo
And then there is the affirmative action we-need-more-black-jurists-in-the-courts outcry, which you knew was coming.

“Judge Thomas is a well-qualified jurist,” Rep. Alcee Hastings (D-Fla.) told HuffPost in the fall. “There is a serious underrepresentation of minorities on the bench and partisan obstructionism isn’t making it any better.”

Hastings is a member of the Congressional Black Caucus, which has railed against Rubio for blocking black judicial nominees at a time when the group says black judges make up about 8.3 percent of the federal judicial bench. In addition to Thomas, Rubio had been withholding his blue slip for another black judicial nominee, Brian Davis. But Rubio ultimately agreed to move forward with Davis, who has since been confirmed.

“I am upset and concerned. Senator Marco Rubio himself said that Judge Thomas had passed all the tests, and then all of sudden for Senator Rubio to say Judge Thomas is not suitable is just not right,” Rep. Frederica Wilson (D-Fla.) said Tuesday. “I don’t know what more I can do to make Senator Rubio understand that what he is doing is wrong.”
I wouldn’t be surprised if groups like GLAAD, or even the New Black Panther Party, Jesse Jackson, or even Sharpton, put in their two cents worth of racially divisive rhetoric to oppose Rubio.

Senator Mike Lee Critiques the War on Poverty

by StreiffMike_Lee
If you haven’t read Utah Senator Mike Lee’s remarks [Bring Them In] at the Heritage Foundation’s Anti-Poverty Forum you really owe it to yourself to do so. It is probably the most succinct conservative critique of modern government anti-poverty programs in recent decades.

When President Lyndon Johnson declared an “unconditional war on poverty” in his 1964 State of the Union address it represented, arguably, the high water mark for the acceptance on liberal ideology in America. The essence of the speech was a singleminded devotion to the “the perfectability of man”: the notion that perfection can be achieved on Earth through the efforts of man, or in the case, the federal government. Never mind that some famous guy, his name escapes me at the moment, warned us all that the poor will always be with us.

As is so often the case, federal intervention becomes a self-licking ice cream cone where the resources earmarked for the eradication of poverty do little more than sustain the bureaucracy dedicated to eradicating poverty. And for good reason, if poverty ends so do the jobs associated with its eradication.

The outcomes have been dramatic and had they not been visited upon those at the margins of society would have resulted in long prison sentences for all involved. Instead of declaring a war on poverty, by Johnson’s actions he actually began the institutionalization of poverty and hopelessness as a lifestyle.

In his speech he contrasts how Abraham Lincoln and Lyndon Johnson addressed the problem of poverty:

In 1861, Abraham Lincoln told Congress that the “leading object” of American government was:

“to elevate the condition of men – to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all, to afford all an unfettered start and a fair chance, in the race of life.”

In a single sentence, Lincoln explains precisely what poverty is, and what government ought to do about it. As Lincoln knew first hand, true poverty was not for most people an absence of money, but an absence of opportunity – a lack of access to those social and economic networks where human opportunities are created. Then, as now, people were not isolated because they were poor – they were poor mostly because they were isolated.

And so, in America’s original war on poverty, government did not give the poor other people’s money. It gave them access to other people.

In Lincoln’s era – even during a cataclysmic war that was itself a struggle for human freedom and opportunity – that meant dredging rivers, building canals and cutting roads. It meant the Homestead Act and land-grant universities. These public goods weren’t designed to make poverty more tolerable – but to make it more temporary. They reduced the time it took to get products to market, increased access to banks and land, and increased the speed at which knowledge could be developed and shared.

Programs designed to provide cash subsistence and housing for the poor have created a series of perverse incentives that encourages poor mothers to not marry and to have children. The neighborhoods with high densities of subsidized housing are known by the technical term of “slum.”

Patients participating in Medicaid, the medical program for the poor, are 93% more likely to die of an ailment than patients with private insurance. Uninsured people are only 74% more likely to die.

Headstart is nothing more than a jobs program for mothers, mostly unwed, of the children participating. It has been studied for decades and is known to be, under a best case scenario, a null set. Any of the meager academic benefits of the program vanish within a year or two.

The casualty list goes on and on:

Today, many of those obstructions are themselves government policies. These policies unintentionally discourage almost every positive step underprivileged families can take toward social mobility and economic security.

Today’s government-centric system penalizes marriage, which a mountain of evidence now shows is the single most empowering social and economic opportunity there is. It also penalizes low-income workers for making more money by drastically reducing benefits at arbitrary points along the income-scale. Because of these poverty traps, single mothers near the poverty line, for instance, can face effective marginal tax rates of 80 or even 90 percent.

Thus, in poor communities, government dependence often atrophies community interdependence, fraying the bonds between moms and dads and neighbors and friends and pastors and teachers, old and young, native and immigrant.

Meanwhile, education policies leave low-income parents and children trapped in failing schools. Policies ranging from welfare to health care to criminal justice are only exacerbating the explosion of fatherlessness plaguing lower-income communities.

His critique of the direction the government has taken under Barack Obama is, if anything, understated:

Now, progressive ideologues reject all this. They do not trust individuals to join together voluntarily and organically to improve each other’s lives and meet common challenges. As President Obama said in his second inaugural:

“No single person can train all the math and science teachers we’ll need to equip our children for the future, or build the roads and networks and research labs that will bring new jobs and businesses to our shores. Now, more than ever, we must do these things together, as one nation and one people.”

But by “together,” of course, he meant only “government.”

This discredited mindset – which insists collective action can only mean state action – is itself a kind of poverty. It rejects social solidarity in favor of political coercion, and voluntary communities for professional community organizers. It distrusts and denies the bonds of cooperation and service that represent the highest expression of our dignity.

Look at any thriving marriage, friendship, church, charity, Little League, historical society, theater company, PTA, neighborhood or business. What makes America exceptional – and life worth living – is not simply individual freedom, but the heroic, empowering communities that free individuals form.

Free enterprise and civil society operate in the natural human space – between the isolated individual and the impersonal state – where we live, and love, and flourish… where everyone can earn a good living and build a good life… where the strong and the vulnerable alike can pursue their happiness, and find it… together.

There is a valid conservative critique to be made of social spending. It is demonstrated that it keeps the poor impoverished, it deters hard work, it encourages irresponsibility, and it passes poverty on from generation to generation. It is a condition that cannot be remedied by throwing ever increasing sums of money at a bureaucracy that relies upon poverty for its continued existence. It is not held to measurable and observable performance objectives because its chief product is making the liberal elite feel good about their beneficence… using your money.

We should not be afraid to address the shortcomings of the welfare state but we must acknowledge that those caught in this system aren’t the enemy, they are, as that famous guy said, the least of our brothers.

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