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Axios
23-05-2025
- Business
- Axios
Child tax benefit increase leaves out millions of kids, analysis says
The poorest kids in the country miss out on the full benefits of the expanded child tax credit in the " big beautiful bill." Why it matters: The bill now making its way to the Senate provides more tax breaks to higher earners than those at the bottom. By the numbers: The Republican bill raises the maximum child tax credit to $2,500 per child from $2,000 for three years. 20 million children would not fully benefit from the increase, according to an analysis from the Center for Budget and Policy Priorities (CBPP), since their parents don't earn enough income to get the maximum amount. "A majority of those children get nothing from the proposed expansion," says Kris Cox, director of federal tax policy at the CBPP. 17 million children as of now do not receive the full benefit from this tax credit, per the CBPP. None of them will get anything from the expansion. How it works: Under current law, families need upward of $30,000 a year to receive the full tax credit amount, explains Joe Hughes, senior analyst at the Institute on Taxation and Economic Policy. Parents who are poor and don't owe income taxes can only claim up to $1,700 per child, known as the "refundability cap." It's a number which adjusts annually for inflation. The new bill didn't raise the refundability cap. Instead, it only increases the maximum that parents, earning less $400,000 a year, can claim. A married couple filing jointly would need to earn $48,550 to receive the full tax credit under the new bill, per CBPP estimates. Under current law, a married couple has to earn $36,800. Zoom out: The new bill widens the gap between what's available to kids in higher income families and those who need help most. For example: A married couple with two children earning $400,000 a year, the max income allowed to claim the credit, would get an additional $1,000 tax credit. A single parent with two children, earning $24,000 a year, would get nothing, Cox explains in a recent Bluesky post. The parents who miss out on the full benefit are those working in low-paying jobs like cashiers, home health aids and housekeepers. Presumably a few of these parents are tipped employees who could benefit from the no-tax-on-tips provision of the bill. However, just as with this the child tax credit, many earn too small an income to benefit. The other side: The standard defense here is that low-income Americans don't pay very much in taxes. Their tax burden is low, so they shouldn't get the full credit because they don't need the tax relief. White House spokesman Kush Desai says wealth inequality decreased after the 2017 tax bill, and the new bill would lock that success in place. He adds that it builds on that success "by eliminating taxes on tips and overtime in addition to rewarding American manufacturing with full equipment and factory expensing to turbocharge America's economic resurgence." Between the lines: This big bill faces big hurdles ahead in the Senate — and the bond market — and it's not clear what will eventually make it through. The intrigue: The legislation also blocks another 4.5 million children from benefiting from the child tax credit because now to claim it, both parents, if they are filing jointly, must have their own Social Security numbers. Under current law, parents who don't have Social Security numbers can claim the credit if their child has one. So, for instance, a parent who is a non-citizen immigrant and files taxes with an ITIN number can claim it. Before 2017, any parent filing taxes could claim the credit. But when Congress changed the law in the first Trump tax bill, 1 million citizen children lost out, Cox says. State of play: The child tax credit provisions are a stark 180 for the House.
Yahoo
20-05-2025
- Politics
- Yahoo
Opinion - Working for welfare benefits is not punishment
One of the longtime dividing lines between conservatives and liberals or progressives is whether those receiving welfare benefits should be required to work. Conservatives see the requirement as a way to reduce costs; liberals see it as punishment for being poor. But its real benefit is to help individuals regain the dignity and self-respect that comes from having a job. The Republicans' budget bill will reportedly require states to enforce a work requirement for able-bodied individuals on Medicaid between the ages of 19 and 64. (They can also satisfy the requirement by looking for work or receiving job training.) Exceptions are made for those who are disabled, pregnant women, incarcerated or in a rehabilitation program. Like the Supplemental Nutritional Assistance Program (also known as food stamps), Medicaid is a means-tested welfare program. Under the bill, an estimated 5 million people are expected to lose their Medicaid coverage, saving the government an estimated $300 billion over seven years. Any time Republicans propose a work requirement for welfare benefits, liberals and progressives whine and moan and claim the heartless Republicans are trying to punish people just for being poor. For example, the left-leaning Center for Budget and Policy Priorities complains, 'Taking assistance away from people who don't show they are complying with a work requirement punishes them for the racial and gender inequities of our nation's labor market.' When the Biden administration removed Republican-led work requirements for Medicaid, the pro-labor group On Labor wrote, 'This welcome change is a recognition of the fact that work requirements unfairly punish people living in poverty and are out of sync with workers' needs in the modern economy.' But it cannot be emphasized strongly enough: Requiring able-bodied people to work for their taxpayer-funded benefits — whether its food, housing, Medicaid or any other means-tested assistance program — is not punishment. About 165 million Americans under age 65 and their dependents — about 60 percent of the population — currently have employer-provided health insurance. They work for their health insurance. It is a benefit, not a punishment. When the pandemic started in February 2020, there were 71.4 million people enrolled in Medicaid and the Children's Health Insurance Plan. Due to the Biden administration's Medicaid expansion, that number went up, peaking at 94.6 million in April 2023. Since then, the numbers have slowly declined to 78.5 million. So even if the work requirement reduced the number of Medicaid participants by an estimated 5 million, that's still 2 million more people than were in the program at the beginning of the pandemic. In short, the proposal does not at all obliterate Medicaid. But any time a work requirement is proposed on any means-tested welfare program, liberals claim there is no need for it, because most recipients are already working. For example, the Kaiser Family Foundation says that in 2023, 64 percent of Medicaid participants were working full or part-time, and the rest weren't working because they fell into one of the exemptions. But this misses the point. If able-bodied recipients are already working, then why complain about requiring them to work to receive Medicaid? Perhaps most hypocritically, liberals and progressives often claim that even if a work requirement increases employment, it doesn't last long. What they don't tell you is that liberal politicians and bureaucrats at all levels of government work relentlessly to reduce, moderate or water down imposed work requirements over time. Progressives think they are doing welfare recipients a favor, but they're not. People who have been out of the workforce for months or even years begin to lose needed work habits and skills. They begin to lose respect for themselves, and they may turn to alcohol or drugs or other ways to ease the pain. Some welfare reform groups have demonstrated that employers are willing to take a chance on these individuals, if the state will let the welfare benefits (including Medicaid) continue during a trial working period, offsetting part of the cost to the employer. The employer gets a partially subsidized employee for a limited time, and potentially a full-time employee if it works out. I have talked to some of these individuals who were required to work for their benefits. They have very encouraging stories to tell of how they regained their dignity by once again providing for themselves and their families. They discover that work is empowering. They just needed a little push to get started. Merrill Matthews is a public policy and political analyst and the co-author of 'On the Edge: America Faces the Entitlements Cliff.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
20-05-2025
- Politics
- The Hill
Working for welfare benefits is not punishment
One of the longtime dividing lines between conservatives and liberals or progressives is whether those receiving welfare benefits should be required to work. Conservatives see the requirement as a way to reduce costs; liberals see it as punishment for being poor. But its real benefit is to help individuals regain the dignity and self-respect that comes from having a job. The Republicans' budget bill will reportedly require states to enforce a work requirement for able-bodied individuals on Medicaid between the ages of 19 and 64. (They can also satisfy the requirement by looking for work or receiving job training.) Exceptions are made for those who are disabled, pregnant women, incarcerated or in a rehabilitation program. Like the Supplemental Nutritional Assistance Program (also known as food stamps), Medicaid is a means-tested welfare program. Under the bill, an estimated 5 million people are expected to lose their Medicaid coverage, saving the government an estimated $300 billion over seven years. Any time Republicans propose a work requirement for welfare benefits, liberals and progressives whine and moan and claim the heartless Republicans are trying to punish people just for being poor. For example, the left-leaning Center for Budget and Policy Priorities complains, 'Taking assistance away from people who don't show they are complying with a work requirement punishes them for the racial and gender inequities of our nation's labor market.' When the Biden administration removed Republican-led work requirements for Medicaid, the pro-labor group On Labor wrote, 'This welcome change is a recognition of the fact that work requirements unfairly punish people living in poverty and are out of sync with workers' needs in the modern economy.' But it cannot be emphasized strongly enough: Requiring able-bodied people to work for their taxpayer-funded benefits — whether its food, housing, Medicaid or any other means-tested assistance program — is not punishment. About 165 million Americans under age 65 and their dependents — about 60 percent of the population — currently have employer-provided health insurance. They work for their health insurance. It is a benefit, not a punishment. When the pandemic started in February 2020, there were 71.4 million people enrolled in Medicaid and the Children's Health Insurance Plan. Due to the Biden administration's Medicaid expansion, that number went up, peaking at 94.6 million in April 2023. Since then, the numbers have slowly declined to 78.5 million. So even if the work requirement reduced the number of Medicaid participants by an estimated 5 million, that's still 2 million more people than were in the program at the beginning of the pandemic. In short, the proposal does not at all obliterate Medicaid. But any time a work requirement is proposed on any means-tested welfare program, liberals claim there is no need for it, because most recipients are already working. For example, the Kaiser Family Foundation says that in 2023, 64 percent of Medicaid participants were working full or part-time, and the rest weren't working because they fell into one of the exemptions. But this misses the point. If able-bodied recipients are already working, then why complain about requiring them to work to receive Medicaid? Perhaps most hypocritically, liberals and progressives often claim that even if a work requirement increases employment, it doesn't last long. What they don't tell you is that liberal politicians and bureaucrats at all levels of government work relentlessly to reduce, moderate or water down imposed work requirements over time. Progressives think they are doing welfare recipients a favor, but they're not. People who have been out of the workforce for months or even years begin to lose needed work habits and skills. They begin to lose respect for themselves, and they may turn to alcohol or drugs or other ways to ease the pain. Some welfare reform groups have demonstrated that employers are willing to take a chance on these individuals, if the state will let the welfare benefits (including Medicaid) continue during a trial working period, offsetting part of the cost to the employer. The employer gets a partially subsidized employee for a limited time, and potentially a full-time employee if it works out. I have talked to some of these individuals who were required to work for their benefits. They have very encouraging stories to tell of how they regained their dignity by once again providing for themselves and their families. They discover that work is empowering. They just needed a little push to get started. Merrill Matthews is a public policy and political analyst and the co-author of 'On the Edge: America Faces the Entitlements Cliff.'
Yahoo
05-05-2025
- Health
- Yahoo
Would Work Requirements Cut Medicaid Costs?
Congressional Republicans are currently looking to slow the growth of federal Medicaid spending, which has surged from $161 billion to $616 billion over the past two decades. Although only 17% of Americans support reducing Medicaid spending; 62% support requiring most adults to work in order to gain eligibility. But, while work requirements command broad appeal among legislators, they are unlikely to greatly reduce the program's costs. Work requirements are generally sought as a way to mitigate the program's work disincentives. Medicaid's expansion to able-bodied adults under the 2010 Affordable Care Act provides comprehensive healthcare benefits (worth an average of $7,711 in 2023), which individuals would lose if they earned more than $20,120 – about the level of someone working full time at the minimum wage in most states. In 2017, when the House of Representatives sought to permit states to condition Medicaid benefits for 'nondisabled, nonelderly, nonpregnant adults' on individuals' 'participation in work activities'; companion legislation was blocked in the Senate. But the first Trump administration approved 13 waivers for states to implement similar work requirements. These typically required Medicaid beneficiaries to dedicate 80 hours per month to work, volunteer activity, full-time education, or job training, while exempting those who were disabled, pregnant, medically frail, or personal caregivers. But such Medicaid work requirements were struck down by the courts for all states except Georgia (which used non-ACA expansion funding). Scholars at the liberal Center for Budget and Policy Priorities argue that 'work requirements have no upside.' Noting that only 6,500 out of 240,000 potentially eligible for the program in Georgia enrolled, they suggest that the burden of compliance pushes people off benefits without increasing work. People can't live solely from healthcare benefits the way they can from cash. In some circumstances, providing medical care to those with serious health problems might actually help them return to work. The work disincentives resulting from Medicaid's means test might also be mitigated by the ACA's subsidies for those with higher incomes to purchase health insurance. To assess the effect of Medicaid work requirements, Harvard economists examined Arkansas's requirement for beneficiaries aged 30 to 49, which was in effect from 2018 to 2019. They found a 13.2 percentage point reduction in enrollment relative to other age groups, and a 7.1 point increase in the percentage of that cohort who were uninsured – even though 95% of those effected by work requirements satisfied them or should have qualified for an exemption. The study found little impact on employment levels – with the target population averaging 17.1 hours of work per week in Arkansas, compared with 18.2 hours in other similar states. Influenced by the Harvard study, the Congressional Budget Office estimate that permitting Medicaid work requirements nationwide would reduce Medicaid enrollment by 0.6 million and federal spending by $109 billion over 10 years. But CBO contrasts the minimal impact on employment of Medicaid work requirements with substantial increases in employment experienced following welfare reform, which established similar requirements for cash benefits in the Temporary Assistance for Needy Families program. However, the increased employment associated with TANF might be misleading. Welfare reform did not simply apply work requirements to TANF cash benefits, but largely shifted that program's funding away from means-tested cash benefits to employment support services. The number of beneficiaries of cash benefits fell by 85%, with many states now spending close to nothing on them. TANF's bigger lesson may be about how federalism distorts work requirements. Under block grants, TANF imposed only loose work targets, which states could easily satisfy by sanctioning token employment arrangements. Those states who desired to maintain the status quo ante, and hand out welfare benefits with little regard to work, could easily do so. The statutory work requirements proposed for Medicaid would be entirely optional – and impose no obligations on states at all. That likely explains why the proposal has faced less political push-back than other proposed cuts to Medicaid. It should also call into question the idea that work requirements would reduce federal spending. CBO's estimate was based on the economic effects of work requirements implemented as in Arkansas. But it does not incorporate an assessment of the political question of whether other states will respond to a change in federal law by seeking to emulate Arkansas. In fact, even where states choose to implement arduous Medicaid work requirements, this may not generate substantial savings for federal taxpayers. The federal government currently provides $9 for every $1 that states spend on Medicaid services for beneficiaries under the ACA's expansion of the program. Rather than reducing states' desire to take full advantage of an extraordinarily lucrative arrangement, work requirements may just make it easier for states to concentrate those funds on preferred constituents. In some cases, they might actually increase the program's cost – by making it easier for red states to justify expanding the program's eligibility to able-bodied adults, where they had previously chosen against doing so. In practice, Medicaid work requirements are likely to be very loose, and to do little either to save taxpayers money or to oblige people to assume full-time employment. Time limits on eligibility would likely do a better job of deterring undue dependence on public funds by those who are able to work, while also providing more support for the receipt of medical care by those who have temporarily fallen on hard times.
Yahoo
03-04-2025
- Business
- Yahoo
Trump Mocked for Placing Tariffs on Two Uninhabited Islands
Among the locations Donald Trump slapped with tariffs Wednesday are two uninhabited islands near Antarctica in the southern Indian Ocean. The Heard and McDonald Islands, which sit about halfway between Australia and South Africa and are territories of the former country, now face 10 percent tariffs, which would pose an issue if the seals and penguins that call the small landmass home were exporting anything to the U.S. That the volcanically active islands were included at all in Trump's so-called 'liberation day' list of tariffs drew amusing responses online, in part because the White House listed them as countries—which they are not. 'The Heard Island and McDonald penguins have been taking advantage of us for too long - it's about time we stood up to them!' former New Jersey congressman Tom Malinowski joked on X. Aaron Reichlin-Melnick, a fellow at the American Immigration Council, suggested the tariff targets were found through a cursory Wikipedia search of the world's nations, and not much else. 'The Heard and McDonald Islands are completely uninhabited. Population zero. I guess we're going to tariff the seagulls?' he wrote on X. 'It kind of feels like a White House intern went through Wikipedia's list of countries and just generated this list off of that with no further research.' Brendan Duke, senior director for federal fiscal policy at the Center for Budget and Policy Priorities, reacted similarly: 'Taking on America's real enemies — a bunch of islands you've never heard of,' he wrote on X. Later Wednesday night, MSNBC anchor Rachel Maddow chimed in. 'Those volcanoes and the penguins and seals who live there, they will never menace the American economy again as they have in the past by flooding us with their cheap exports she grinned. 'Fresh air, cool breezes, a waft of eau de penguin?' A spokesperson for the Australian Antarctic Division, which manages the Heard and McDonald islands, confirmed the islands were uninhabited and referred the Daily Beast to the Australian Department of Foreign Affairs and Trade, which did not immediately respond to a request for comment. Other obscure islands the White House targeted were Norway's Svalbard, Réunion Island, a French overseas territory in the Indian Ocean, and Australia's Norfolk Island, home to about 2,000 people. When Trump announced the tariffs at the White House on Wednesday afternoon, he predicted the markets would soar as a result. They promptly did the opposite. CNBC Senior Economic reporter Steve Liesman, who previously criticized Trump's 'insane' tariff-related decisions, explained the concern among investors and consumers. 'For all of President Trump's talk of a new golden age, this huge tax increase will inevitably result in higher prices for American families, lower growth and business investment, and diminished exports and manufacturing output,' he said. 'So it is not a good forecast or a good look from the economists and the forecasters.'
