Statement by National Urban League in Response to President Bush's Address to the Joint Session...

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 28, 2001

The following is an announcement by the National Urban League:

We were pleased to see that a number of issues central to the American people and the Urban League movement are priorities of the President's --

education, racial profiling, social security, health care for low-income families, a tax cut and election reform. But we await the details on how the President's proposals will be funded and what cuts in other areas will be required to pursue his agenda. The League's positions on the priorities announced by President Bush last night are as follows:

I. Education: The Urban League has long been active in the fight to overhaul our nation's public schools and we support the President's emphasis on reading and early literacy, and his proposed increase for the training and recruitment of new teachers. The League remains opposed however, to any remedy for school failure that would transfer public funds of tax expenditures to non-public schools.

II. Health Care: The President's decision to provide quality health care in low-income neighborhoods and extend health coverage to those who lack health insurance is commendable. However, we are concerned that the proposal leaves too much to the whim of market forces. A tax credit alone, even if refundable, would not necessarily address the market's failure, and the desire of insurance companies to avoid customers they perceive to be high-risk clients. We recommend extending the existing CHIPs program and increasing eligibility to cover the children's parents.

III. The Proposed Tax Cut: Most disturbingly, the League believes that the centerpiece of the President's budget, his targeted tax cut plan which benefits the wealthiest one percent of Americans who get 43% of the proposed tax cut, remains patently unfair. Families in the top one percent of the income distribution have already benefited tremendously from the expansion of the 1990s. Their incomes have risen so fast, that despite the increase in marginal tax rates in 1993, the top one-percent now pay a lower share of their total income in taxes than in 1992. This contributes to the growing inequality between America's richest and poorest families. We ask the President to consider the following suggestions: Make ensuring that low-income, working families see their after-tax income rise a priority. First, make the proposed child credit refundable. Second, extend the tax form simplification to low-income families. Third, correct the marriage penalty built into the Earned Income Tax Credit (EITC), not just for the middle class, but for low-income married couples who, in fact, have a much higher correlation between husband and wife earnings than do the high-income families the President's proposed marriage penalty reform proposal addresses. Fourth, extend the benefit of the Earned Income Tax Credit to low-income families by raising the phase-out point for the EITC and lowering the marginal tax rate. And increase the number of children that parents can claim for EITC from two to three children.