The Impact of the Government Shutdown on Children and Families

While the government shutdown is well into its second week, it is important to keep in mind the devastating consequences that are continuing to impact the most vulnerable children and families. Though programs that directly ensure public health and safety have avoided the spending freeze, including Medicaid and Social Security, most of the programs that are affected are still vital supports and services that help sustain young women and children, low-income families, and the elderly.

Temporary Assistance for Needy Families (TANF), which provides temporary financial assistance to help pregnant women and families pay for food, shelter, utilities, and expenses other than medical costs, has stopped awarding new funds, however states have the option to continue providing benefits with state dollars. Since TANF provides significant services in addition to cash assistance, such as GED preparation, vocational training, postsecondary education, vocational rehabilitation, help with child care, work stipends, job retention services and more, discontinuing the program during the shut-down – particularly if it continues for much longer - would be a devastating for families in need.

Head Start programs will also be affected by the shutdown—a total of 23 programs serving 19,000 children will be affected as their grants begin to expire. Those cuts are in addition to the 57,000 children pushed of Head Start as a result of the sequester, on top of a $400 million mandatory cut to the program nationwide. The longer the shutdown continues, the more Head Start programs and young children will be adversely impacted.

Implications of the government shutdown to nutrition programs are equally alarming. The Supplemental Nutrition Assistance Program (SNAP), which helps over 47 million low-income Americans, will continue providing benefits, but only until the end of October. States have the option of continuing the SNAP program through 2014, but the $2 billion available for contingency funds that would be used to compensate the loss of funding would not be enough to support the program in the long-term, since SNAP provides about $6 billion in support to families per month.

The Special, Supplemental Nutrition Program for Women, Infants, and Children (WIC), which assists over 9 million at-risk mothers, infants, and young children in accessing healthy food, nutrition information, and health referrals, will also continue until the end of October. Like SNAP, most states have funds to continue WIC for a week or so, but the program won’t be able to continue for very long, with emergency funds running out by the end of the month.

The impact on supplemental nutrition programs is also impacting the elderly. Senior Nutrition Programs have stopped as a result of the shutdown. The Department of Health and Human Services can no longer fund Meals on Wheels, which provides more than one million home-delivered meals to seniors who need them each day. This crucial service has also been impacted by the sequester, which is discussed in this previous post.

The government shutdown is risking the basic supports and services low-income families need to survive. Although there are emergency funds to continue certain programs in the meantime, the long-term consequences will be harmful and widespread. State policymakers should use their discretion to continue the programs that can provide supports and services to vulnerable families; however, the only sustainable solution is for the government to go back to work in serving children and their families as soon as possible to minimize the impact.

A Look at the 2012 American Community Survey Data & Three Cities

According to the U.S. Census Bureau’s Community Population Survey, in 2012 46.5 million people lived in poverty – 16.1 million of them children. The report showed that Black and Hispanic families continue to have disproportionally higher poverty rates and lower incomes than White families.

While the national data provide a sense of the magnitude of poverty and disparities in the U.S., it is often difficult to imagine what that means for communities. However, the subsequent American Community Survey (ACS) data - which was released today - provides a more detailed look at demographic characteristics in cities and states. 

CSSP believes that place matters and strongly impacts the health, safety, educational and employment opportunities of children and families. We work in a number of communities that face significant challenges due to years of disinvestment, including unemployment, failing schools and housing instability. These communities are trying to take a more comprehensive approach to addressing these issues. The ACS data highlight some of the significant obstacles in place.

• California is one of only three states that has seen an increase in poverty since 2011. In 2012 Fresno, CA – a recipient of Promise Neighborhoods planning grant and a Building Neighborhood Capacity Program (BNCP) grant – faced a poverty rate of 31.5 percent, up from 28.8 percent in 2011. In Fresno, nearly half of all Black residents (47.1 percent), 30.1 percent of Asian residents and 38.1 percent of individuals identifying as Hispanic lived in poverty.
• Though median incomes in the state of Wisconsin remain unchanged in 2012, residents of Milwaukee, WI – a BNCP grant recipient –  continue to experience an unacceptable level of disparity. More than 42 percent of Milwaukee’s children lived in poverty, including 55.2 percent of Black children. An immense gap remained across income levels as the median household income for Black families was $24,994, compared to $45,268 for White families.
• Tennessee’s poverty level in 2012 was not statistically different from the 2011 rate. In Memphis, TN – also a BNCP grant recipient – 28.3 percent of residents lived in poverty including more than a third (33.6 percent) of Black residents and 14.7 percent of White residents. In Memphis 27.1 percent of households relied on Supplemental Nutrition Assistance (SNAP) benefits at some point in 2012. 

The data released today provide a snapshot across several indicators and capture information that can be used to make informed public policy and funding decisions – critically important in the midst of sequester cuts. State and local poverty rates can only be significantly and sustainably reduced if opportunity gaps are addressed. A growing number of communities are learning how to help policymakers better understand what is actually happening in their neighborhoods and the kinds of resources required to address local needs.

2012 Poverty Data: New Data from the U.S. Census on Poverty, Income, and Health Insurance.

Earlier today, the U.S. Census Bureau released the 2012 data on income, poverty, and health insurance coverage. For the second consecutive year, neither the official poverty rate nor the number of people in poverty at the national level were statistically different from the previous year’s estimates—the poverty rate remained at 15 percent – amounting to 46.5 million people living in poverty. While there was not an increase in the poverty rate, the 2012 data still indicated significant racial disparities in both poverty and income. The poverty rates among non-Hispanic Whites and Asians were 9.7 percent and 11.7 percent respectively, while the poverty rates for Blacks and Hispanics were 27.2 percent and 25.6 percent respectively.

Poverty and Income Data Highlights

• The percent of people in deep poverty, with incomes below 50% of the poverty threshold, remained at 6.6 percent from 2011, which is still a substantial increase from the 5.2 percent rate seen in 2006 and 2007 (prior to the recession) and even from the data collected in 1967 where deep poverty was at 4.4 percent.
• The poverty rates for children, those under the age of 18, was 21.8 percent, not statistically different from 2011.
• Median household income in 2012 was $51,017, not statistically different from the 2011 median income of $51,100.

Health Insurance Data Highlights

• The percentage of people without health insurance coverage decreased to 15.4 percent from 15.7 percent between 2011 and 2012, while the number of uninsured people in 2012 was not statistically different from 2011, at 48 million people.
• The percentage and number of people covered by government health insurance increased to 32.6 percent and 101.5 million people in 2012 up slightly from 32.2 percent and 99.5 million people in 2011.
• The percentage of Asians and Hispanics without health insurance decreased from 16.8 percent and 30.1 percent to 15.1 percent and 29.1 percent respectively.
• The percentage of uninsured children decreased from 9.4 percent to 8.9 percent in 2012.

Safety Net Programs

• Unemployment insurance was able to raise 1.7 million people out of poverty in 2012.
• Social Security income helped 15.3 million people aged 65 and older out of poverty in 2012 – if these payments were excluded - it would quadruple the number of elderly people living in poverty.
• The Supplemental Nutrition Assistance Program (SNAP), while not included in the poverty calculations used for the data today, if considered, would have reduced the number of people in poverty by 4 million people in 2012.
• The Earned Income Tax Credit (EITC) also reduced the number of children classified as living in poverty in 2012 by 2.9 million children.

The Important Role of Public Policy. Public policy helps create pipelines of educational opportunity and new jobs. It also creates the supports and services that help poor individuals and families while they work toward those opportunities. As evident in the data, the most noticeable statistic changes that occurred in 2012 were in health insurance coverage – with the number of uninsured children dropping from 9.4 percent to 8.9 percent in 2012.  This demonstrates the critical value of policies that make a public investment in children and families. Public investments have proven to have a real impact on reducing poverty – and subsequently improving the quality of life for millions of children and families. Unfortunately, the $85 billion in cuts to supports and services as a result of sequestration are likely to only exacerbate the conditions of poverty and increase the percentage of those living in unacceptable conditions – unable to meet their basic needs.

The Need for a Focus on Equity. The racial disparities in the poverty data indicate that Black and Hispanic families have continued to have disproportionately higher poverty rates and lower incomes compared to White families, which has been consistent for more than three decades. This inequity shows the need for innovative solutions and public investments aimed at supporting real change.  Policy strategies should take into account the existence of disparate opportunities and outcomes—attention to equity creates solutions that best meet the needs of the entire community.

To read CSSP's Statement on the New Poverty Data and Implications for Children and Families please click here.

For more strategies to Ensure Children Grow Up in Safe, Supportive and Economically Successful Families visit PolicyforResults.org.

More from our blog: a primer on poverty measurement and the Census instruments used.

Immigration Reform and Benefits Access as a Means of Keeping Families Together

On June 27^th, the Senate passed the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013 (S. 744), a comprehensive set of reforms of federal immigration policy. Title II of S. 744 contains many provisions of significance to low-income immigrant families, including the creation of a new immigrant status, an overhaul of current family and employment visas, policy on benefits access, and the creation of new farm worker and temporary worker visas.

The bill creates a new status, registered provisional immigrant (RPI), for people who were physically present in the U.S. on or before December 31, 2011; have maintained continuous presence until the date of application; have paid all federally assessed tax liabilities, fees and penalties; and have not been convicted of certain criminal offenses. RPI status may be renewed in six-year periods. After 10 years, individuals in RPI status may apply to adjust to lawful permanent resident (LPR or “green card”) status. An additional three years in LPR status is required before people initially granted RPI status may apply for U.S. citizenship.

The bill allows undocumented farm workers who can demonstrate a minimum of 100 work days or 575 work hours in the two years prior to the date of the bill’s enactment to be eligible for an agricultural card (“blue card”). Workers who work at least 100 days a year for five years or workers who perform at least 150 days a year for three years can adjust to LPR status. To be eligible for LPR status, agricultural workers must show that they have paid all taxes and fees, and have not been convicted of any serious crime.

The bill goes on to describe the applicability of benefits programs for these new immigrant statuses. A person granted RPI status or a blue card will not be eligible for nonemergency Medicaid, the Children’s Health Insurance Program, Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, or Supplemental Security Income for the duration of their provisional status. When they adjust to LPR status, they generally will be forced to wait at least five additional years before becoming eligible for these programs. A person granted RPI status or a blue card will be able to purchase private health insurance through the state Health Exchanges created by the Affordable Care Act (ACA). However, as a RPI they are not eligible for the ACA’s premium tax credits and cost-sharing reductions.

Immigration Policy’s Impact on Children and Families

The policies contained in this new Senate bill have important implications for keeping immigrant families together, because creating a legal means for families to remain in the U.S. will remove the threat of deportation, thereby preventing the children of immigrants from separation from their parents. Poor immigration policies and poor implementation and enforcement of policy can lead to severe consequences for immigrant families, in particular low-income undocumented children and families. In the first six months of 2011, the federal government removed more than 46,000 parents of U.S.-citizen children, and an alarming number of these children end up in foster care. Unfortunately, the exact number of children in foster care due to deportation of their parents is challenging to find because child welfare departments and the federal government do not document cases of families separated in this way. These children must wait months or years to see their parents, if they ever see them again at all.

The trauma of separation can be substantial for both immigrant parents and children. Parents are held in detention centers for an indefinite amount of time while their case is being reviewed, which leaves parents and children in the dark about when they will see each other again. Detention centers are on average 370 miles away from a detainee’s home, which can make visitation extremely difficult for families with limited resources. If the separation is long, the issue of language barriers can arise for infants and toddlers, who oftentimes must adjust to speaking English in their foster homes, and lose some of their native language. Loss of language can even become a major barrier to reunification, as some caseworkers and children’s attorneys deem communication between parent and child to be too difficult.

What Works

The Senate-passed bill would create new immigrant statuses that would bring millions of undocumented workers into more stability. While neither the Senate bill nor current federal policy extend public anti-poverty programs to families in RPI or LPR status, state policymakers have some leeway in supporting immigrant families’ ability to maintain their housing, meet their nutritional needs and support their ability to maintain consistent employment. Having access to these benefits can support families’ ability to maintain the extensive employment, income and fee requirements for RPI and LPR status, which would protect them from deportation, thereby preventing the devastating consequences of the separation of families, including trauma, parental alienation and loss of language and culture.

Immigrant families that live and work in the United States can be assisted in their stability and integration into the community with the help of public benefits. Federal statute limits the eligibility for essential means-tested social services, such as health insurance and food assistance, to non-citizens and legal residents who have lived in the U.S. for a minimum of five years. Under the Senate bill, an individual who began as a RPI would have to wait at least 15 years before becoming eligible to receive benefits from federal means-tested programs. However, states have the ability to use their funds to expand coverage to programs for low-income children and families who are not qualified for coverage under federal funding. States can:

• Elect to provide Medicaid and CHIP to lawfully present immigrant children and pregnant women who meet the Medicaid state residency requirement.
• Provide state-only food assistance to qualified immigrant families.
• Expand TANF coverage to some or all qualified immigrants during the five-year ban. This could include cash assistance, childcare, transportation and/or housing assistance.
• Implement welcome/outreach programs for new immigrants to assist with integration into society.
• Support programs that assist eligible immigrants through the process of naturalization and increasing their civic engagement.
• Support the policy force in addressing immigrant communities with proper communication and culturally sensitive measures.
• Support policies that protect immigrants from deportation.
• Create exceptions to the termination of parental rights timelines for incarcerated, detained and deported parents.
• Institute “time-of-arrest” protocols for local law enforcement agencies to enable parents to decide who should take custody of their children.

For more on how access to benefits can reduce child poverty and prevent child abuse and neglect, see Policyforresults.org.

How Family Food Security Supports the Economy and Children's Health

By supporting children’s healthy development policymakers help to provide the foundation needed for children to grow into thriving adults.  A critical aspect of child health is food security.  Several federal and state programs are aimed at ensuring children and families have access to adequate nutrition.  These investments often also have benefits for the economy. Programs like WIC, Healthy Food Financing, School Nutrition Programs and SNAP are all aimed at ensuring food security for poor and low-income families.

The Supplemental Nutrition Assistance Program (SNAP) is a vital lifeline for families; about 75% of households receiving SNAP benefits include at least one child, senior or person with a disability. Over 25% of all US children received SNAP benefits in 2011 according to USDA data.

On November 1, 2013, every U.S. family receiving SNAP benefits will have those benefits cut, making it more difficult for over 47 million people to buy food. On that day the 2009 increase to SNAP that occurred through the American Recovery and Reinvestment Act (ARRA) will expire, and additional cuts will likely be included in the new farm bill. On Tuesday the Senate Agriculture Committee passed a $4.1 billion cut to SNAP benefits over the next 10 years as part of its version of the bill, which would likely result in an average cut of $90 per month for nearly 500,000 households. The House Agriculture Committee passed its version of the farm bill on Wednesday, making even more drastic cuts totaling $20.5 billion over the next decade.

 Prior to the 2009 increase through ARRA, the level of SNAP benefits per family was so low that receipt of the benefits had ‘no detectable impact on child health’ according to a study by Children’s Health Watch. Following the increase, the study found that children in families receiving SNAP benefits were significantly more likely to be ‘well’ -- not overweight or underweight, in good health, developing normally for their age, and having never been hospitalized, compared to children whose families were eligible but did not receive the benefit. Another study by Children’s Health Watch found that when families’ SNAP benefits are reduced, young children are more likely to ‘be food insecure (a known child health risk), be in poor health and have developmental delays than young children in families whose benefits do not decrease’. The study also found that families whose SNAP benefits were reduced were more likely to forego needed health care due to inability to afford care, be food insecure and struggle to pay for heat and utilities than families whose benefits do not decrease.

In addition to the important impact SNAP benefits can have on child health, SNAP also has important economic stimulus effects. Research by the USDA indicates that every dollar of federally-funded SNAP benefits generates between $1.73 and $1.79 in economic activity in industries such as agriculture, retail, wholesale-transportation and food processing. SNAP benefits play an important role in sustaining demand for groceries and preventing job losses in these industries. A study by the Center for American Progress found that for every $1 billion cut from SNAP, 13,718 jobs would be lost. 

Another change in the House version of the farm bill is the elimination of 'broad-based categorical eligibility', which gives states the option of allowing recipients of certain other public benefits to qualify automatically for SNAP. Broad-based categorical eligibility prevents recipients who have already met financial eligibility requirements from needlessly going through the financial need determination process again. Since 2009, the USDA Food and Nutrition Service has strongly recommended that states adopt broad-based categorical eligibility to reduce state workloads, more efficiently helping families in need. Eliminating this option will increase barriers to receiving SNAP for eligible families, placing young children at greater risk for being significantly underweight for their age and living in households that are food and housing insecure. 

The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) addresses this critical issue by providing additional support for nutrition and food security among women and young children; nearly 9 million women and children are served by this highly successful program. However, uncertainty about the future of WIC funding presents a challenge for states in ensuring that all eligible applicants are able to participate. Research conducted by the National WIC Association found that many state and local agencies have consolidated or closed clinics, laid-off staff or reduced their service hours in preparation for expected funding reductions due to sequestration. The research findings indicate that this ‘streamlining’ has negatively impacted service delivery resulting in eligible women and children being placed on waiting lists and ‘negatively affecting nutrition education and breastfeeding support’ for participants. The Center for Budget and Policy Priorities estimates that the President’s budget request of $7.142 billion for WIC would be sufficient to serve all eligible applicants, but that a lower level of funding might prevent eligible women and children from benefitting from the program.

School nutrition programs provide an additional boost to food security for children from low-income households. In 2011, the National School Lunch program provided low-cost or free lunches to over 31 million children and breakfast to over 12 million children every school day.   However, if broad-based categorical eligibility is eliminated, many children who currently received free school meals based on their family’s SNAP eligibility would be affected.  According to the Center for Budget and Policy Priorities, an estimated 210,000 children would lose access to free school lunches and breakfasts if broad-based categorical eligibility were eliminated.

Even if families have the benefits they need to provide their children with good nutrition, many low-income families still live in ‘food deserts’ where access to grocery stores and farmers markets selling fresh, nutritious food is very difficult. The Healthy Food Financing Initiative promotes good nutrition and economic development in under-served communities based on a model pioneered by the Pennsylvania Fresh Food Initiative, a public-private partnership that opened or improved 88 grocery stores and increased access to healthy food for 400,000 residents in just five years. The initiative also helped to retain or create 5,000 jobs in such communities throughout the state. For a case study of the Pennsylvania Fresh Food Initiative please visit www.cssp.org. 

In light of these impending cuts, state policymakers may want to consider planning for how to provide SNAP recipients with information about the changes and how to manage an increase in client inquiries about the reduction in benefits. If the option of broad-based categorical eligibility is also eliminated, states may be faced with an increase in workloads involved in completing financial need determination separately for each program.

State policymakers may also want to explore expansion of state and local-level initiatives to promote childhood nutrition and health such as increased state funding for farmers’ markets, school nutrition education and Farm to School initiatives as well as fresh food initiatives inspired by the Pennsylvania model.

Access to healthy, affordable food is fundamental element to ensuring children are healthy and thrive.  For state-based policy strategies to ensure that children are healthy please visit PolicyforResults for strategies to improve access to affordable healthy food and to support healthy school initiatives.   For more on collaborating around results and results-based policy strategies, visit Policyforresults.org. 

How Asset Tests Hinder the Goals of Safety Net Programs

It is common knowledge that the way to economic self-sufficiency involves having a bank account and saving your money—not only so that you can eventually buy a house or fund your children’s education, but also to have an emergency fund (enough money to cover living expenses for three months) in case of job loss, health emergencies or other unexpected costs. It is also how people get out of debt and can start building wealth.

This value, saving, is reflected in many states’ economic programs for people enrolled in the Temporary Assistance for Needy Families (TANF) program. Parenting skills classes and job readiness trainings teach the importance of having a bank account and saving money. However, this value is not always reflected in states’ policy regarding eligibility for TANF. Furthermore, the Supplemental Nutrition Assistance Program (SNAP) also has asset tests, which can be different from those for TANF, adding another layer of complexity and inconsistency.

Not only do asset tests counter one of the major goals of the TANF program, it also creates extra work for state administrators and increases the chances for payment errors. There is no federal mandate for states to adopt asset tests, but of the ones that do, they vary widely in which types of resources count toward their asset limits. These resources may include bank statements, car titles, insurance policies and other relevant documents. In some cases, applicants can self-report their assets; in others, a caseworker must verify the assets based on the submitted documents.

 A new report from the New America Foundation, State Asset Limit Reforms and Implications for Federal Policy, describes how some states have reformed their policy on asset limits in their SNAP and TANF programs. Motivated by increasing program costs, threats to program integrity, and the recognition that asset tests are a barrier to long-term self-sufficiency, many states have eliminated asset tests for TANF and/or SNAP. For example, Colorado estimated that eliminating its TANF asset test would result in additional benefits for 44 families, at a cost of $123,000. However, these costs would be offset by greater administrative efficiency; eliminating the asset test would save caseworkers 10 to 15 minutes per “case interaction”, or up to 90 minute for the five or six interactions that typically occur between a client and a caseworker in the first 45 days. The successful policy reforms in Colorado and other states can serve as a useful model for other policymakers who are considering similar changes.

While asset tests were instituted to ensure that assistance is given to the families who need it the most, research has shown that once asset tests are eliminated, program enrollment did not increase significantly. This is due in part to the fact that families that seek assistance and meet the low income requirements are generally asset poor. In addition, the money that states saved in reduced administrative costs more than made up for the slight uptick in enrollment.  

States benefited from eliminating their asset tests in several key ways:

•      Caseworkers had more time and attention for other case management duties
•        Greater administrative efficiency resulted in cost savings
•        Greater streamlining simplified the process for both families and the agency

Asset tests are an example of a policy that while likely created with good intentions, has had serious unintended consequences for families’ efforts to attain financial success. This policy exemplifies the significance of considering the unintended impact of policy on families and highlights the importance of policymaking with a results focus (ensuring that policy is well aligned with intended outcomes). Eliminating asset tests is an important policy reform that policymakers should consider as a step towards encouraging families on public assistance to move towards financial self-sufficiency.

To learn more about connecting policy to results visit PolicyforResults.org. 

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.

New Data from the U.S. Census on Poverty, Income and Health Insurance

Earlier today the Census Bureau released the 2011 data on income, poverty and health insurance coverage. The good news is after three consecutive years of increases, neither the official poverty rate nor the number of people in poverty were statistically different from the 2010 estimates. The bad news is there is still an unacceptable poverty rate, marked income disparities by race, and a continued shift of wealth to people in the top income percentiles.

Highlights from the Census data on poverty and income:

• The 2011 official poverty rate for the nation was 15.0% and there were 46.2 million people in poverty, not statistically different from last year.
• There still persists a large income disparity among racial groups, as Blacks had a poverty rate of 27.6%, Hispanics 25.3%, Asians 12.3% and Non-Hispanics Whites 9.8%.
• Hispanics were the only ethnic group to see a change in poverty rate, which decreased from 26.5% in 2010 to 25.3% in 2011.
• The percentage of people without health insurance coverage decreased in 2011 to 15.7% from 16.3% in 2010. The number of uninsured also decreased to 48.6 million in 2011 from 50.0 million in 2010.
• There was a significant change in the share of aggregate income, as the top 5% of earners saw their share of aggregate income increase by 5.3%. Those in the second, middle, and fourth quintiles saw their share of aggregate income decrease by 1.6%, 1.9%, and 1.6%, respectively. Those in the lowest quintile saw no significant difference.
• People in the lowest quintile of income increased their percentage of year-round, full-time workers by 17.3%, which was much higher than any other income quintile.
• The percent of people in deep poverty (i.e. their income is 50% of their poverty threshold) was 6.6%--although this is not a significant change from 2010, it is important to note that 6.6% is a substantial increase from the 1967 level of 4.4%.
• Unemployment insurance benefits saved 2.3 million people (600,000 of whom were children under 18) from being poverty
• Social Security income saved 21.4 million people (1.1 million of whom were children under 18) from being in poverty
• Although the Supplemental Nutrition Assistance Program (SNAP—food stamps) and the Earned Income Tax Credit (EITC) are not counted in the poverty measure, if they were: SNAP would have decreased the poverty number by 3.9 million people (1.7 million of whom were children) and the EITC would decreased the poverty number by 5.7 million people (3.1 million of whom were children).

On health insurance:

• In 2011, the percentage of people without health insurance decreased to 15.7% from 16.3% in 2010. The number of uninsured people decreased to 48.6 million, down from 50.0 million in 2010. This is the first time in four years that the number fell.
• However, coverage levels remain below levels prior to the Great Recession. The percentage of people without coverage remains higher than in 2007, when 14.7% of the population was uninsured.
• Among adults aged 19-25, in 2011 27.7% were uninsured as compared to 29.8% in 2010. This is a decrease of 2.2%. There was not a significant change in insurance coverage for children under 19.

The poverty data released today tells us the percentage and demographic information of people in the United States that live in poverty.  However, the numbers indicate something else too: the impact that public policies have on poverty.  Public investment in policies that create jobs and support families significantly impacts whether or not people experience poverty.  In an earlier post, the Center on Budget and Policy Priorities connected the numbers on health insurance to related federal policies. They found that the decrease in the percentage of uninsured young people aged 19-26 can be explained in part because of the new provision under the Affordable Care Act that allow adult children to obtain coverage from their parents’ health insurance plan up to their 26^th birthday. Similarly, in a recent piece by Half in 10, they outline the impact of public policy choices on poverty, including information on the tax programs that were included in the Recovery Act. Furthermore, CBPP found that it is possible to reduce poverty while reducing the deficit, as the three largest three largest deficit-reduction packages of the last two decades achieved both by increasing the EITC (in 1990 and 1993), increasing SNAP (in 1993) and creating the Children’s Health Insurance Program (CHIP) (in 1997).

The Take-Home Message

While the official poverty rate did not change from last year, it is important to note that the data shows the wealth gap between rich and poor continues to increase, and the rate of people in deep poverty remains staggeringly high.

The Census data also showed a link between full time work and the leveling-off of the poverty level.  This has meaningful implications for policymakers. Continuing to focus on job creation will help to bring more people out of poverty and stable employment at a reasonable wage will ensure they stay there. However, the data also shows the immense value of safety net programs like SNAP, the EITC, unemployment insurance, and Social Security which are there to support those  who have a job but are still struggling to meet their basic needs, those who have lost their jobs and those who may be unable to work.

While budgets are tight and falling short, and while unemployment rates and poverty remain high, it is important for policymakers to continue to work on supporting the families in greatest need - all while considering the feasibility within the current economic climate. Understanding how communities are being most affected and why will help policymakers create safety-net programs that will meet family and community needs. Creating policy with a focus on results will help to do this in a way that also efficiently allocates scarce resources and improves the odds that problems will be addressed effectively.

To read CSSP's Statement on the New Poverty Data and Implications for Children and Families please click here.

For more strategies to Ensure Children Grow Up in Safe, Supportive and Economically Successful Families visit PolicyforResults.org.

More from our blog: a primer on poverty measurement and the Census instruments used.