Thursday, October 4, 2012

Not Mentioned at the Debates: Poverty, and the Case for Maintaining and Strengthening the Safety Net

Last night, at the first Presidential debate, we heard the candidates focus their remarks on how they would help the middle class. Unfortunately, moderator Jim Lehrer did not ask a question about how the candidates would alleviate poverty, and they did not talk specifically about what they would do to help Americans in the lowest income bracket.

What should have been conveyed to the American people is how crucial it is to maintain the federal safety net, or “the floor below which you cannot fall” as President Obama referred to it last night. A large component of this “floor” is Social Security, which the candidates spoke about in reference to seniors, but not nearly as much about how it helps low-income people. In addition to Social Security, two other important components of the safety net are refundable tax credits and food assistance.

As the 2011 poverty data from the US Census revealed, policies such as the Earned Income Tax Credit (EITC) and the Supplemental Nutrition Assistance Program (SNAP) have kept millions of Americans out of poverty. Yet there are still 46 million Americans in poverty, 16 million of whom are children—an alarming 1 in 5 children. In order to begin to assist more of the 46 million poor people in this country, the safety net needs to be expanded—not capped, converted to a block grant or eliminated altogether.
As the Center for Budget and Policy Priorities showed, making cuts to SNAP would cause millions of people to lose their benefit, which could be devastating considering the current economic hardship experienced by so many families.

The federal deficit was a major point of contention at the debate last night, so it is of worthy note that not only does SNAP address a serious need among Americans experiencing food hardship and food insecurity, it also stimulates the economy. According to an analysis by the Food Research and Action Center (FRAC):
  • Nearly 1 in 5 people in the U.S. didn’t have enough money to purchase food they need for themselves and their families in the first six months of 2012.
  • More than 50.1 million Americans lived in households that struggled against hunger in 2011.
  • Each federally funded dollar of SNAP benefits generates nearly double that in economic activity, because people are using the money to purchase food.
  • Increased SNAP participation can increase state revenues. For example, in California each dollar of SNAP benefits frees up an estimated 45 cents more recipients spend on taxable goods, yielding additional tax revenues for the state.
In 2011, SNAP was responsible for lifting 3.9 million Americans (1.7 million children) out of poverty.
Another critical component of the safety net, refundable tax credits, were responsible for lifting an additional 9.2 million Americans (4.9 million children) out of poverty in 2010. These tax credits include:
  • EITC kept 6.3 million Americans out of poverty (500,000 due to improvements brought via the American Recovery and Reinvestment Act).
  • The Child Tax Credit (CTC) kept 2.6 million Americans out of poverty (1 million due to ARRA improvements).
ARRA was able to expand these crucial tax credits for low-income families by creating a new tier for larger families, and by providing marriage penalty relief. Unfortunately, as part of the large bundle of expiring financial policies constituting the looming “fiscal cliff”, the ARRA improvements are set to expire at the end of 2012. Without the Child Tax Credit, a single mother with two children working full-time at minimum wage would lose $1,545 annually. In order to prevent millions of families from facing additional financial burden, policymakers at the federal and state level should consider options that would expand EITC and CTC or consider the development of state compliments where they are not currently in place.

As the New York Times discussed, the Presidential candidates hold starkly different views of the role and scope of government in American society. However, both the data and history have shown that specific policy changes related to strengthening the safety net not only help American families by keeping them out of poverty, but also benefit the economy. Policymakers can lead by strengthening the policies and programs that serve the needs of low-income and poor families as well as strengthen the country’s economic circumstances.  Luckily for us, it is possible to do both.

No comments:

Post a Comment