On Fox & Friends this morning, Fox Business' Stuart Varney made a revealing departure from his normal obsession with cutting taxes. Varney began his regular morning segment by railing against the Supplemental Security Income program, which "provides cash to meet basic needs for food, clothing, and shelter" for low-income seniors, blind, and disabled people. After whining about the "8 million" poverty-stricken seniors and disabled people receiving benefits to help pay for basic necessities, Varney attacked the Earned Income Tax Credit (EITC). Here is what Varney thinks about the largest and most effective anti-poverty legislation in America:
VARNEY: Whenever you've got a cash welfare system you are going to have people gaming that system. What you have not got on the screen is the Earned Income Tax Credit, which is by far the biggest cash -- I'm going to call it a welfare scheme. That is known as the most corrupt government program. Billions of your dollars going out there when they should not be going out there; same with the Supplemental Security Income program. It really is a scandal. At a point where we are running out of money, running a massive deficit, and Social Security itself is in trouble.
The EITC is different from traditional welfare programs in a number of distinct ways. First of all, it is a tax credit program, not a stipend or a subsidy. If the amount of credit exceeds the federal income tax paid, the EITC acts as a tax cut, providing tax refunds based on income and family size. Second, and perhaps most importantly, the credit only applies to low- to moderate-income working families and individuals. The credit was designed to be, and has been, an incentive to work for low-income Americans, making the EITC one of, if not the, most effective ways to actually lift low-income families out of poverty and contribute to local economies. The Brookings Institution had this to say about the program:
The EITC has proved remarkably successful in reducing poverty. In 2003, the EITC lifted 4.4 million people in low-income, working families out of poverty, more than one-half of them children. Today, the EITC lifts more children out of poverty than any other social program or category of programs. Without it, the poverty rate among children would be 25 percent higher (Greenstein 2005). The Council of Economic Advisers (1998) found that more than one-half of the decline in child poverty between 1993 and 1997 could be explained by changes in taxes, and most important was the EITC. Another study found that from 1995 through 1999, the EITC reduced the overall poverty rate by 1.5 percentage points, even though only about one-third of poor households qualify for the credit (Hoffman and Seidman 2003). The total poverty gap -- the aggregate difference between poor families' resources and the poverty threshold -- for families with children would have been 20 percent higher in 1999 without the EITC (Ziliak 2004).
Varney's dismissal of the EITC is even more outrageous given the fact that he is one of Fox News' most outspoken advocates for reducing taxes -- in essence, exactly what the EITC does. Here's the problem, though: Varney doesn't advocate reducing taxes for everyone -- just for the rich. Varney isn't anti-tax, he's just pro-rich, and his comments exemplify Fox's class warfare at its best: hypocrisy is fine, as long as you're attacking the poor.