New Volume of Bipartisan Policy Recommendations Includes Expanding EITC

By Devin Simpson

Policymakers on both sides of the aisle should consider improving the Earned Income Tax Credit (EITC) for childless workers to help expand economic opportunity for more Americans, according to a new report.  

The Aspen Institute’s Economic Strategy Group, a team of bipartisan thought leaders, recently released “Expanding Economic Opportunity for More Americans,” which outlines policy recommendations to achieve three goals: develop human capital for the modern economy; increase labor force participation; and promote private sector job creation and wage growth.  

Included among these recommendations is a proposal to expand the EITC for workers without dependent children. Jason Furman, Harvard University professor and former chair of the Council of Economic Advisers under President Obama, and Philip Swagel, University of Maryland professor and former Assistant Secretary for Economic Policy at the Treasury Department under President Bush, recommend increasing the EITC for childless workers to $1,500 and lowering the eligibility age from 25 to 21. Their proposal would benefit roughly 16 million low-income workers.

This report adds to the growing momentum around expanding the EITC for workers without dependent children, the only group taxed into poverty by the federal tax code. On Wednesday, Senator Sherrod Brown (D-OH), Representative Ro Khanna (D-CA) and Representative Bonnie Watson Coleman (D-NJ) reintroduced legislation to expand the EITC nearly six-fold for childless workers. And in 2018, California and Maryland increased access to the EITC for childless workers at the state level by expanding the eligibility age.

At our September  Capitol Hill briefing, MDRC unveiled results from the Paycheck Plus pilot program, which tested a larger credit worth up to $2,000 for workers without dependent children. The program found that expanding the credit to these workers boosted income and employment rates, increased child support payments and reduced severe poverty.

Furman and Swagel conclude their portion of the Aspen report by acknowledging the left and right often have competing visions of how best to boost economic opportunity: one side embracing a more active government while the other encourages less government involvement. While Furman and Swagel admit they feel “varying degrees of sympathy” for these two approaches, they agree that expanding the EITC “could be part of any overall approach.”