Greenstein: We Need a Stronger EITC and Minimum Wage

March 5, 2014 at 12:19 pm

On last night’s PBS “NewsHour,” CBPP President Robert Greenstein discussed the President’s new budget and issues that both sides of the aisle might agree on.  In this exchange with host Judy Woodruff and James Capretta from the Ethics and Public Policy Center, Greenstein explained why we should strengthen both the Earned Income Tax Credit (which the President proposes expanding for childless workers) and the minimum wage:

JUDY WOODRUFF: [W]hat do you see in here, Jim Capretta, where you see the two parties could work together?

JAMES CAPRETTA: Well, there’s one possibility. I don’t know how much of a chance, but around the Earned Income Tax Credit, there’s more bipartisan support for that kind of an approach to wage supplements than it is for just redistributing through taxing and spending.

[The] Earned Income Tax Credit is a program that Bob knows well that provides additional support directly through the federal tax system to people that are actually working, have a job, and it boosts their income directly to the proportion of earned wages. It’s the kind of thing that could be built on.

It’s better than doing, frankly, a minimum wage increase, certainly of the size the president has pushed….

ROBERT GREENSTEIN: I think we need to do both the minimum wage increase and the Earned Income Credit.

You can’t do the whole thing through the Earned Income Credit. It puts too much strain on government finances. You can’t do the whole thing through the minimum wage. That puts too much strain on employers.

But I think Jim is right that there is a potential here, for even another reason. The president is proposing to increase the Earned Income Credit for workers not living with minor children. We already have a sizable Earned Income Credit for families with kids.

When you look at these young workers or middle-aged workers who are single individuals, if they’re paid low wages, they’re the one group whom the federal government today literally taxes into poverty or deeper into poverty. That should be something that both parties can say, that’s not a good idea. And both parties want to encourage these people to work more, and the Earned Income Credit does that.

We’ve documented the importance of extending the EITC to childless workers and why we need a stronger minimum wage.

Watch the interview below:

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