Poor first to barrel over the ‘fiscal cliff’
Earl Ofari Hutchinson | 1/3/2013, 11:03 a.m.
The political, social and economic consequences of the fiscal cliff debate on the poor are enormous. Surveys show that the ranks of the poor are still huge and that the wealth and income gap between the rich and poor is wider than in recent years. There’s also the greater public recognition that Social Security, Medicare and Medicaid, unemployment insurance and other government-funded programs play a huge part in bolstering the economy, and Americans’ living standards.
The GOP’s favorite whipping program — food stamps — is a perfect example of that. If that aid been counted as income, nearly four million — almost two million of them children — would have been lifted out of poverty.
Then there’s the Earned Income Tax Credit, which is a refundable federal credit for low- to moderate-income working Americans. The estimate is that this lifted nearly six million people, half of them children, out of poverty. These programs provide income for the poor that goes directly into spending on goods and services. This in turn creates jobs, spurs business expansion, and sharply boosts tax revenues for local, state and the federal governments.
The poor — far from being a drag on the economy — fuel it with their spending. Obama’s budget does not hammer the poor. The GOP’s counter to it would. Obama’s proposals as they now stand are the only ones that keep the poor from barreling over the fiscal cliff.
Earl Ofari Hutchinson is an author and political analyst.