Let no ambition mock their useful toil, Their homely joys, and destiny obscure; Nor grandeur hear with a disdainful smile, The short and simple annals of the poor.
— Thomas Gray, Elegy Written in a Country Churchyard

It's easy for commentators to focus on the budget's bad effects on the poor and overlook its good effects on the rest of us. That has the unfortunate effect of creating a malaise in us that is undeserved, since all we did was elect the budget's creators. We did not instruct them in their actions. Here are three of the bad effects that commentators have focused on.

The first is President Bush's intention to get rid of the tax cheats who have been wrongfully claiming the earned-income tax credit, a credit that provides an offset for the Social Security taxes low-income workers have paid. It is estimated that poor people wrongfully claiming these credits cost taxpayers between $6.5 billion and $10 billion annually. (Of course cheating by the non-poor costs the government many times that, but the non-poor reinvest the money they swindle by creating jobs for the poor thus converting their wrong into a right.)

To cut down on the number of working poor who swindle the rest of us by claiming benefits to which they are not entitled, Mr. Bush has asked Congress for $100 million and 650 new Internal Revenue Service employees to identify potentially erroneous claims by the poor before any money is paid on those claims. Under the new rules, people claiming the credit must prove their eligibility before being paid. This is described as the most exhaustive proof of eligibility ever demanded of any class of taxpayers and a more deserving class would be difficult to find. Some of the proof may be unavailable, such as birth or marriage certificates from foreign countries, and in those cases the credit will not be given.

A second administration target is the eligibility requirement imposed on low-income families wanting to participate in school-lunch programs. About half of the 28 million children in the National School Lunch Program receive free meals because they come from low-income families.

The distressing news brought to us by John Rice, a spokesman for the federal Food and Nutrition Service, is that the number of children certified to receive free lunches is 25-percent higher than the number who, U.S. Census Bureau figures suggest, appear to be eligible. There is nothing more distressing to the conscientious taxpayer than the sight of a small child sitting in a school lunch room eating a free lunch for which the child is ineligible. If the Bush budget is approved, that ghastly sight will be seen no more. Proposed eligibility requirements will make it harder for low-income families to participate in the school-lunch program. Those seeking to participate will be required to produce tax returns, pay stubs and proof of their living arrangements before being permitted to receive free lunches.

There's no doubt the program will work. When the proposed requirements were tested in 2002, there was a 20-percent decline in the number of children approved for free lunches. The director of operations for the child-nutrition programs in East Baton Rouge Parish, La., which serves 44,000 lunches a day, says administering the new rules will be a nightmare but there will be a reduction in the number of children getting free meals. Imposing the new requirements may be inconvenient, but if they cause one poor person to become honest, it will be worth every ounce of energy it takes to get the job done. No longer will the small but hungry child take food from the mouths of the rest of us by eating a free meal received as a reward for parental dishonesty.

The third element of the budget that commentators have focused on is elimination of the low-income tax credit, a $400 credit that had been planned to be paid this summer to most low-income taxpayers. Just before the tax bill was finalized, some last-minute cuts had to be made in order to limit the cost of the tax reduction to $350 billion, a Senate-imposed number. There were a number of small cuts that everyone agreed upon, but an additional $15 billion was required in order to bring the entire package down to the desired level. There were three ways that could be accomplished.

One was to raise the tax on dividends from 15 percent to 17.3 percent. Another was to raise the highest tax bracket (imposed on single people and married joint filers earning more than $311,951) from 35 percent to 35.3 percent. Both those solutions seemed harsh and Congress came up with a third and less draconian way of lowering the price of the package. It decided to declare those with incomes between $10,500 and $26,625 ineligible for the $400-per-child payment that low-income families with higher incomes are receiving. The decision affects families with 11.9 million children and saves $15 billion, a figure happily coincident with the amount needed.

Marcie Ridgway, spokeswoman for U.S. Sen. George Voinovich, an Ohio Republican who insisted that the tax cut could not be larger than $350 billion, said her employer would have been happy to have extended the child credit, but not if it pushed the cost of the entire package over $350 billion. Low-income families are undoubtedly happy to be participants in the process making tax cuts for the wealthy possible.

Christopher Brauchli is a Boulder lawyer and and writes a weekly column for the Knight Ridder news service. He can be reached at brauchli.56@post.harvard.edu

Copyright 2003, The Daily Camera

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