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Tammy Baldwin, Cory Booker introduce bill to address poverty

Democratic Sens. Tammy Baldwin of Wisconsin and Cory Booker of New Jersey introduced legislation this week to fight poverty through transitional jobs and expanded tax credits.

Titled “The Stronger Way Act,” the bill would create a new transitional jobs grant program at the Department of Labor, expand Earned Income Tax Credits and make changes to the Child Tax Credit.

“The idea is that if you are working full time that you should not be in poverty in the United States,” Baldwin said.

Community backers of the bill hope that it will overcome the partisan divide in Congress by incentivizing work instead of adding benefits for the unemployed.

“There’s not a penny of welfare in this. This is all based on work,” said David Riemer, senior fellow at the Community Advocates Public Policy Institute in Milwaukee. “You don’t get any of this money unless you’re a worker.”

But the lack of corresponding cuts for the estimated $560 billion tax reduction over 10 years could be a sticking point for some Republicans, who control both houses of Congress. House Speaker Paul Ryan, a Wisconsin Republican, has advocated expanding the Earned Income Tax Credit but has proposed paying for it by eliminating other programs.

Baldwin pointed to tax cuts for the wealthy that haven’t been funded, and community advocates said the changes would reduce the financial burden on the welfare system overall.

The bill would increase the Earned Income Tax Credit’s rate of return for working families with children, thereby allowing lower-income families to get larger refunds.

It would also expand that tax credit for childless workers, a group the progressive Center on Budget and Policy Priorities says is the lone group the federal government taxes deeper into poverty. The act would make more of them eligible for Earned Income Tax Credits and increase the amount they can receive, benefiting an estimated 20 million childless workers.

The bill would also adjust the Child Tax Credit system to benefit the lowest income families, allowing them to capture more of the $1,000-per-child maximum refund.

“There are minimum wage workers right now that are taxed into poverty. This will allow us to reverse that,” Baldwin said.

The legislation would also create a grant program for transitional jobs programs, but Congress would have to pass additional legislation to allocate funding to the program.

“Transitional jobs are I think a key ingredient for any broad anti-poverty strategy and one that we have, at the moment, really failed to put enough resources behind,” said Indivar Dutta-Gupta, director of the Project on Deep Poverty and a senior fellow at the Georgetown Center on Poverty and Inequality.

Dutta-Gupta said states had to develop the programs from scratch during the last recession. When the next recession hits, he said, it will benefit employers, workers and taxpayers to have programs already in place. Baldwin said there are at least 20 states, including Wisconsin, with transitional jobs programs and bipartisan support.

“We’ve found something that really works, that is very, very effective,” Baldwin said. “We need to scale that up nationally if we’re going to make a true dent in poverty that centers around the dignity of work.”

Baldwin said each of the components of the bill have enjoyed bipartisan support at the national level, so she hopes the combined bill will garner similar support. A spokeswoman for Sen. Ron Johnson, a Wisconsin Republican, said he will review Baldwin’s proposals when they are available.

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