Ways and Means Republicans Willing to Play Ball on EITC

Pamela Moore/

A day after President Obama called for expanding the earned income tax credit in his final State of the Union address, Republicans on a key panel said they are open to the idea. Two members of the House Ways and Means Committee told Morning Consult that they are willing to work with the administration on an EITC expansion to childless workers as long as any proposal includes anti-fraud provisions.

“We will work with him on it as long as he works with us on the significant fraud that is going on in that program,” said Rep. Kenny Marchant (R-Texas) in an interview Wednesday. “Any expansion of that program would have to be tied specifically to some very tough fraud prevention measures.”

During his final State of the Union address, Obama noted that he and House Speaker Paul Ryan (R-Wis.) share an interest in using tax measures for poverty alleviation. “Speaker Ryan has talked about his interest in tackling poverty,” Obama said. “I’d welcome a serious discussion about strategies we can all support, like expanding tax cuts for low-income workers without kids.”

Both Ryan and Obama have in the past called for expanding tax benefits for childless workers by lowering the eligibility age from 25 to 21 as well doubling the maximum credit from around $500 to around $1,000. Republicans have long spoken positively of expanding the EITC because they approve of its focus on the working poor, rather than those who are either unemployed or out of the workforce.

“It’s a program that encourages skin in the game, if you will. Anything that we can do to break the cycle of dependency is a good way to go. I see the benefits of it,” said Rep. Pat Tiberi (R-Ohio), a Ways and Means subcommittee chairman, in an interview.

Any discussions are preliminary, and Republicans need some serious attention to fraud if anything is to move forward. The Internal Revenue Service estimates that improper payments, including fraud, account for 21 percent to 26 percent of EITC claims.

“The biggest problem is that there’s a 25 percent fraud rate, meaning the people that are supposed to get it aren’t getting it. So as long as we redirect any expansion to fraud protection we’re going to be excited to work on that,” Marchant said. “If it’s just an expansion of a program that has 25 percent fraud, we’re not going to be interested in it.”

Congress made permanent an expansion to the EITC that affected married people and those with three or more children as part of the tax extenders deal at the end of last year.

Morning Consult