Skelos the Welfare Queen
The federal case against state Sen. Dean Skelos and his son Adam on charges of extortion, bribery and abuse of office seems to be another example of egregious public corruption. But aside from the sordid details of their allegedly wide-ranging malfeasance, the indictment reveals something equally offensive: hypocrisy.
A few months prior to his arrest, Skelos defended a tax credit for yachts and private planes, under the premise of workforce development. The credits would unburden a wealthy few from various luxury taxes to produce jobs in two small sectors.
Meanwhile, Senate Republicans refused to raise the minimum wage, a move that would’ve increased the purchasing power of millions of workers and theoretically spurred a demand-pulled expansion of the economy. Skelos wasn’t worried, because according to him, the state already lavishes low- and moderate-income families with the earned income tax credit. The EITC lowers the tax liability of eligible filers, allowing them to keep more of their earnings. In order to even qualify for the EITC, a family with one child must make below $38,511. Anyone earning minimum wage easily makes the cut at $25,480.
Nevertheless, in a not-so-subtle reference to the freeloading “Welfare Queen,” Skelos reasoned as follows:
“They’re not making just minimum wage. They get a check from the government. They’re not paying taxes. It’s about $1 billion a year that’s going to them above the minimum wage.”
First, that $1 billion is distributed among about 1.5 million workers. On average, filers receive a $608 refund, though it can range into the thousands depending on household composition and income. Second, although filers may not pay income tax, the data show that poor families recirculate their savings into the economy, and spend their income on repairs, groceries and retail, plus the sales tax that goes with it. Lastly, the federal EITC is considered one of the most successful labor market innovations because it produces an income effect that encourages people to work more. Single mothers and their children benefit the most, experiencing an increase in employment, health and educational outcomes.
Incidentally, Senate Republicans are also cool to paid parental leave, another policy proven to increase women’s employment. Paid leave allows parents, mostly mothers, to have a baby without going broke, and return to work. The high retention rate is actually a cost savings for companies. The United States is the last developed economy in the world without such a policy, yet despite proposals from the Independent Democratic Conference and the Assembly there isn’t an “appetite” for it in the Legislature according to Gov. Andrew Cuomo, who initially scoffed at the idea.
Both paid leave and the EITC are designed to reward the hard work of honest people, something Skelos and his son know nothing about. At 32 years old, lazy and greedy from a steady diet of nepotism, Adam Skelos eagerly accepted handouts from his father to subsidize his entire livelihood.
The U.S. attorney alleges that Adam received a $20,000 payment for title insurance work he did not do. On another occasion, he demanded a bribe from an environmental technology company for work he was unqualified to do (admitting that he “literally knew nothing about water or, you know, any of that stuff,” according to the indictment). Threatening to obstruct a $12 million contract if the company didn’t increase his “compensation,” he allegedly demanded to be paid as much as the engineers actually working on the project. When he couldn’t hack it in the title insurance business on his own, he turned to dad to extort clients for him. In total, Dean Skelos’ entitlement-addicted son allegedly “earned” $200,000 in government-subsidized bribery.
Together they are accused of engaging in rent-seeking behaviorto maximize the benefits of public office for private gain.
That’s not work, that’s political welfare.
Alexis Grenell (@agrenell on Twitter) is a Democratic communications strategist based in New York. She handles nonprofit and political clients.