December 2012 U.S. Poverty Action

December 7, 2012

Avoiding the Fiscal Cliff: Tell Congress to Protect the EITC and CTC

Follow Up with Tax Aides Urging Congress to Protect Low-income Working Families

December is the month to push your members of Congress to act responsible in securing a fair budget that includes protecting the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). While everyone in our action network should call the receptionist in their Senate and House offices, we urge your RESULTS group to coordinate with each other so that each Senate and House aide gets a call to talk about the EITC and CTC. If you already called the aides in November, plan to follow up with them in December to see if they followed through on your request.

  2. When connected, tell the aide that you would like to talk about tax credits for working families, specifically the Earned Income Tax Credit and Child Tax Credit. Tell him/her that you are very concerned that Congress is ignoring the tremendously positive impact these credits have on working families.
  3. Ask them if they realize that people like firefighters, police officers and sheriffs, nurses, child care workers, and military personnel benefit from these credits — people who are working hard to support their families in tough economic times.
  4. Tell them that parents who work full-time should be able to support their families and stay out of poverty. In 2011, the EITC and CTC lifted 8.7 million people were raised out of the poverty level, more than half of them children.
  5. Remind them that that recent improvements to the EITC and CTC will expire on December 31. If that happens, 13 million families – which include 25 million children – will see their taxes increase significantly, causing many families to fall back into poverty.
  6. In addition, tell the aide you are very concerned that Congress will try to cut in the EITC and CTC as part of deficit reduction in 2013.Congress should not be trying to balance the budget on the backs of working families.
  7. Urge the aide to ask his/her boss to speak to Senate leaders, particularly Senators Harry Reid (D-NV) and Mitch McConnell (R-KY) or House leadership including House Speaker John Boehner (R-OH-8) and Minority Leader Pelosi (D-CA-8), and urge them to:
    • Make the expiring improvements to the EITC and CTC permanent
    • Support a principle that specifically protects the EITC and CTC from cuts in any deficit reduction framework
  8. Set up a time to follow up with them on your request and report back on any communication the office has with Congressional leaders.

Serious Threats to Tax Credits for Low-Income Working Families in Budget Deal

With the 2012 election behind us, Congress is spending the remaining weeks of the Lame Duck session haggling over ways to avoid the so-called “fiscal cliff” in 2013. The fiscal cliff refers to the combination of the Bush tax cuts expiring and the start of automatic across-the-board budget cuts in January 2013. Economists agree that if Congress does nothing, the dramatic drop in spending from higher taxes and government budget cuts could send the U.S. economy back into recession. However, economists also caution that Congress still has time to act in early 2013 before that happens, i.e. going over the “cliff” in early January will not cause a recession.

Both sides agree that we must act, but they differ greatly on what to do. President Obama and Democrats in Congress are willing to extend the Bush tax cuts, along with the expiring improvements to the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) beyond this year, but are unwilling to extend the Bush tax cuts for income above $250,000. Republicans are demanding that all the tax cuts be extended, claiming that Congress can raise adequate revenue by limiting tax deductions for the wealthy. Republicans also want to see significant changes to entitlement programs including Medicare, Medicaid, and Social Security. President Obama has expressed his willingness to enact some entitlement reforms, but the two sides remain at an impasse over taxes.

RESULTS and our allies are focused on protecting anti-poverty programs from looking cuts that will occur if Congress fails to act. At the top of the list are the EITC and CTC. These credits are our most effective tool at fighting poverty in America. According to the U.S. Census, the EITC and CTC lifted 8.7 million people out of poverty in 2011 (see the graphic from the Half In Ten Campaign to the right for a good visual)Census Supplemental Poverty Measure: Impact of EITC, SNAP. Improvements to the EITC and CTC enacted in 2001, 2003, and 2009 will expire on December 31. If that happens, the Tax Policy Center estimates that 11 million working families will lose an average of $854 from their Child Tax Credit, and 7 million families will lose an average of $532 from their EITC. And, deep cuts to EITC and CTC for low-income that are part of a broader budget deal could bedevastating to millions more families. This essentially amounts to a huge tax increase on families who can afford it the least.

If that weren’t bad enough, the EITC and CTC potentially face an even bigger threat in 2013. Once the current crisis is resolved (and it will be at some point), Congress is likely to work on major tax reform and deficit reduction in 2013. If so, the EITC and CTC could face more significant cuts beyond just the recent improvements expiring. Some members of Congress openly oppose the EITC and CTC and want to see low-income Americans pay a nominal amount of federal income tax. Tax reform could be their vehicle. If that were to happen, the EITC and CTC would all but be eliminated, forcing millions of people back into poverty. Congress must follow the example of previous tax reform and deficit reduction efforts by specifically protecting anti-poverty programs, including the EITC and CTC, from any cuts or detrimental structural changes. Congress must not balance the budget on the backs of low-income Americans.

This is why it is essential that activists call Congress, telling them to not raise taxes on working families by allowing the EITC and CTC improvements to expire or to let the credits get cut in deficit reduction. All of our hard work to protect these tax credits will culminate in the few weeks, so we are continuing the focus of our November Action Sheet through December — it’s extremely important that RESULTS volunteers and allies pick up the phone and call the tax aides in their Congressional offices to talk specifically about the EITC and CTC. Call your House and Senate tax aides to relay this message. If you’ve already contacted them, follow up with them to see if they have acted on your request.

Amplify Your Message through the Media

In addition to talking to tax aides, it is also important that the media cover the impact these automatic, i.e. sequestration, cuts will have on low-income families. Once you have talked to your tax aides, reinforce this important message by sending a letter to the editor to your local paper telling Congress to stop posturing and do what’s right — ensure that we protect America’s most vulnerable and not increase poverty.

SAMPLE Letter to the Editor:

I am writing in response to your coverage of the budget showdown in Washington. The U.S. Census Bureau’s latest poverty report shows that in 2011, 46 million Americans lived in poverty, including more than one in four children under age five. It is a tragedy that in a country as blessed and as wealthy as ours, nearly 1 in 7 of our fellow Americans struggle to put food on the table and a roof over their heads.

Fortunately, we have tools to make things better. The Earned Income Tax Credit and Child Tax Credit are very effective at poverty reduction. In 2011, these credits lifted 8.7 million people out of poverty, more than half of them children. Child care workers, firemen, police officers, and even military personnel benefit from these credits, which have until recently enjoyed broad bipartisan support. Unfortunately, key improvements to these credits expire in a few weeks and if House leadership get its way, these credits would see even deeper cuts (while millionaires and billionaires get more tax cuts). The result is simple — more children and families in poverty.

I urge our Congressional delegation to put working families first. Don’t raise taxes on the poor and middle class — protect and extend the current EITC and CTC.

Use our online LTE alert to send your letter today:

Join the December 8 RESULTS National Conference Call

To help build grassroots support for protecting the EITC, CTC, and other anti-poverty programs, join the RESULTS National Conference Call on Saturday, December 8, at 12:30 pm ET. Our guest speaker is Barbara Pryor, longtime legislative assistant to Senator Jay Rockefeller. Barbara has worked on Capitol Hill for over 25 years and she’ll offer her “insider” perspective. To join the call, dial (888) 409-6709. Plan to call in no later than 12:27 pm ET to give time to the operator to connect you with the call.

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