By Rob Garver, VOA News
Elizabeth Lower-Basch, deputy executive director for policy at the Center for Law and Social Policy, described the figures released this week as “not surprising, but deeply disappointing.”
She stressed that the poverty levels in the U.S. are very much dependent on policy choices made in Washington.
During the pandemic, “we made a decision that we were going to take poverty, and particularly child poverty, seriously, and make sure that people have what they need,” she told VOA. “That’s cash assistance, but also food benefits and health care. Now, we’re really rolling back that support, and with child poverty, we’re back where we were.”
By Jennifer Ludden, NPR
When the tax credit ended, surveys found many parents had trouble paying bills and covering basic expenses like rent and groceries. Jackson, who lobbies for foster parents, says she’s been doing OK. With inflation driving up prices, though, she feels worse off in some ways than at the height of the pandemic.
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Washington, D.C., September 12, 2023—Today’s U.S. Census Bureau report shows—once again—that poverty in the United States is a policy choice. According to the Supplemental Poverty Measure (SPM), the overall rate of poverty in 2022 was 12.4 percent, markedly increasing from 7.8 percent in 2021, even as both total employment and full-time, year-round employment rose. And the child poverty rate as measured by the SPM more than doubled, from 5.2 percent in 2021 to 12.4 in 2022, the largest one-year increase on record—following the largest one-year decrease on record in 2021. While the SPM poverty rate grew for all groups of children, Black and Hispanic children continued to experience disproportionately high poverty rates, 17.8 percent and 19.5 percent respectively, compared to 7.2 percent for non-Hispanic white children. Non-citizens also experienced disproportionately high poverty, with an SPM poverty rate more than twice the native-born population (24.4 percent vs. 11.2 percent).
Poverty rates are affected far more by decisions made in Washington D.C., and in state capitals than any decisions made by families and communities. In fact, the primary factors contributing to U.S. poverty rates are policies that create or reinforce structural and systemic challenges like structural racism and patriarchy, enhance or undermine worker power, strengthen or weaken the social protection system, and generally ensure a strong economy that delivers widespread prosperity.
The historic decline in child poverty two years ago was the result of COVID-era policies, including an expanded, enhanced, and more equitable Child Tax Credit (CTC) and other federal programs to support people with low incomes, particularly children. Yet policymakers decided not to extend the enhanced CTC, turning their backs on children by rejecting a proven tool to fight poverty that offered Americans a return of more than $9 on each dollar of investment in families experiencing the lowest incomes. And 18 states prematurely ended SNAP emergency allotments despite elevated food prices last year, declining millions of federal dollars in nutritional support.
“Too much is at stake in both the lives of children and families, and the health of our communities for politicians to do nothing or even actively undermine them. Mountains of research make unequivocally clear that poverty hurts children, youth, and families, while also holding back the U.S. economy,” said Indivar Dutta-Gupta, president and executive director of the Center for Law and Social Policy (CLASP).
Parents with low incomes work hard every day to meet their children’s material and developmental needs. Poverty acts as a weight, pulling them back and making it harder—sometimes impossible—to overcome common challenges and setbacks. As a result, children growing up in poverty are at higher risk of developmental delays, behavioral challenges, and a lack of school readiness. First and foremost, all children deserve an opportunity to meet their highest potential. But the costs of not addressing child poverty aren’t just felt by the children themselves. One study estimates that child poverty costs the U.S. economy just over $1 trillion per year, or 5.4 percent of GDP.
Abundant evidence demonstrates that income support programs can improve the rates of child poverty. Cash supports for families lead to better birth outcomes, greater educational attainment, and improved overall health. Research also shows that this assistance reduces child welfare system involvement, lowering the risk of children being separated from their families. “As the expanded CTC revealed in 2021, we have the tools to end child poverty in this country. We just need the political will to use them,” said Dutta-Gupta.
The Census report also found that the share of people without health insurance in 2022 dropped by 0.4 percent to 7.9 percent, tying the previous low. This also reflects a policy choice to establish the continuous coverage provision under Medicaid that began in 2020. Unfortunately, this provision ended in 2023, and we know that at least 5.9 million people, including many children, have already lost Medicaid coverage. When we see the 2023 figures, the uninsurance rate will likely be much higher. We need a permanent system offering affordable, continuous health insurance coverage to all, without forcing people to navigate a paperwork maze to keep their coverage. Continuous coverage reduces administrative burden and prevents delays and gaps in treatment that can lead to worse health outcomes.
Congress has an outsized role in reversing the country’s increased poverty. And September is a pivotal time, as Congress must pass bills by the end of the month to fund the continued operation of the federal government. This is an opportunity for policymakers to provide adequate funding to fight poverty and promote well-being, free of harmful “riders.” This includes addressing the child care funding cliff threatening families and our economy, passing a Farm Bill that improves SNAP and makes it more equitable, and enacting a CTC that’s paid to families regardless of their specific federal income tax liability and that applies to families without regard to immigration status.
By Peter Coy, The New York Times
I interviewed Indi Dutta-Gupta, the executive director of the Center for Law and Social Policy, who worked on the National Academies report. He and his colleague, Elizabeth Lower-Basch, have a brief and positive take on the report. One thing Dutta-Gupta pointed out is that whatever the Census Bureau decides to call the poverty line has no direct impact on spending to fight poverty. That’s up to Congress.
Dutta-Gupta also said that in the debate over absolute versus relative measures of poverty, he’s in the relative camp.
“The whole concept of poverty is specific to a place and time,” he said. “Societies do have expectations and norms.”
By C-SPAN Washington Journal
Indivar Dutta-Gupta discusses the eligibility requirements for the Supplemental Nutrition Assistance Program (SNAP) taking effect in September 2023 and the effectiveness of social safety net programs.
Watch the episode here:
By Indivar Dutta-Gupta and Elizabeth Lower-Basch
This is the third in a series of commentaries from CLASP experts that explore dimensions of poverty ahead of the U.S. Census Bureau’s annual release of poverty and income statistics from the previous year. On September 12, we’ll get a snapshot of the economic hardship children, youth and young adults, and families experienced in 2022. Ahead of the release, CLASP experts will offer key insights on the long-term effects of child poverty, promising policy solutions for ending child poverty, links between poverty and mental health, why it’s important to have a more accurate measurement of poverty, the lived experience of childhood poverty, and what trends we expect to see in this year’s poverty data.
As we look ahead to the Census Bureau’s annual release of poverty data on September 12, it’s important to understand exactly what these numbers measure—and what they miss.
In 1964, when President Lyndon Johnson declared an “unconditional war on poverty,” there was no official definition of poverty. However, the U.S. Department of Agriculture had studied the minimum levels of different food groups to sustain adults and children of various ages and how much it would cost to purchase this food. The first poverty measure was created by Social Security Administration researcher Mollie Orshansky, who multiplied the cost of a 1960s “economy food plan”—designed for temporary or emergency use when household funds are low developed by the U.S. Department of Agriculture—by three, based on a 1950s survey indicating that families spent about a third of their income on food. This measure, now the basis of the official poverty measure (OPM) has been adjusted for price increases over time but otherwise has remained nearly untouched.
However, even before Orshansky’s measure was officially adopted, researchers understood its many problems. In proposing the measure, Orshanksy herself noted that it was “not possible to state unequivocally ‘how much is enough’” but that she was confident that anything below her threshold was “too little.”
A different problem with the OPM showed up when researchers tried to use it to measure progress in reducing poverty: it doesn’t count income from some of the most important public programs that address poverty today. Cash assistance programs like Social Security are counted, but other “in-kind” programs such as food assistance from the Supplemental Nutrition Assistance Program (SNAP), health care covered by Medicare and Medicaid, housing assistance, and child care subsidies are not. And refundable tax credits like the Earned Income Tax Credit and the Child Tax Credit (CTC)—which have increasingly become a major form of income support—are also not counted. Thus, the OPM showed that child poverty in 2021 was barely lower than in 2020 because the historic expansion of the CTC was not counted under this measure.
Fortunately, since 2011, the Census Bureau has reported a second measure of poverty, the Supplemental Poverty Measure (SPM). The SPM is a far better measure of whether public programs are, in fact, reducing poverty because it counts as income those refundable tax credits, as well as in-kind income supports from housing subsidies, food assistance, and school meals.
The SPM also deducts from income any taxes a household may owe, child support paid, out-of-pocket medical expenses, and work expenses, including child care. This measure also counts unmarried partners who live together and unrelated children, such as those in foster care, as part of the household unit. And it bases the needs threshold on families’ actual expenditures on food, clothing, shelter, and utilities, plus a bit more. Finally, it accounts for the fact that living in a state like New York costs more than in Alabama. When we say that child poverty was almost cut in half in 2020, it is the SPM that reflects this extraordinary accomplishment.
But the SPM itself is far from perfect. For example, it doesn’t distinguish between someone who has low medical costs because of excellent insurance and someone who is forgoing needed care because they can’t afford it. Similarly, it can’t tell the difference between a family with low child care expenses because it receives a subsidy that lowers the cost of quality care, and one with similarly low expenses because they leave school-age children unsupervised during the summer. And how it adjusts for housing costs produces some state results that don’t align with measures of hardship. For example, California has a higher SPM poverty rate than Mississippi, even though food insecurity is higher in Mississippi.
A recent panel of the National Academies of Sciences, Engineering and Medicine (NAS)—on which CLASP’s President and Executive Director, Indivar Dutta-Gupta served—recommended several improvements to the SPM to try to address these issues. For example, instead of only counting out-of-pocket medical costs as expenses, the panel recommends that the cost of health insurance should be added to both the needs threshold and the resources available to a household. The panel also recommends that the SPM should be elevated to the nation’s headline poverty statistic and renamed the Principal Poverty Measure or PPM. This report is significant in part because NAS recommendations led to the development of the SPM in the first place.
Understanding the role that public policies play in keeping people out of poverty is important, and even more important is understanding who—by race, gender, age, region, and more—is left behind, and why. CLASP will be closely looking at the SPM data when the Census releases it in September. But it’s also important to recognize that even an improved PPM will not capture all aspects of poverty.
The PPM will better measure resources and needs, but it won’t measure access to higher education, or whether the same program that provides needed food assistance simultaneously increases stigma and shame by the ways recipients are treated. CLASP is committed to working in partnership with people experiencing poverty to address all these aspects of poverty. As President Johnson said in his speech calling for a war on poverty, “It is an effort to allow them to develop and use their capacities… so that they can share, as others share, in the promise of this nation.”
In partnership with the polling firm Ipsos, the University of California, Berkeley, and other advocacy organizations, CLASP conducted three nationally representative surveys of families about the expanded Child Tax Credit (CTC) that was included as part of the 2021 American Rescue Plan Act. The goals for the surveys were to understand families’ tax filing behavior and awareness of the expanded CTC, learn how parents were spending their CTC funds, and measure how the expanded credit impacted families’ well-being.
The first survey was conducted in July 2021, before the monthly CTC payments began. The second survey was administered in October 2021, after eligible families received three months of CTC payments. The third survey was administered in July 2022, after the monthly CTC payments expired and after parents had filed their 2021 tax return. The July 2022 survey also included responses from more than 500 parents in Puerto Rico about their experiences filing for the CTC, and how they planned to spend their credit.
For each of the three survey rounds, CLASP and partners released initial topline findings as well as a more in-depth report.
The organizations involved in the project include the Center for Law and Social Policy (CLASP), Center for the Study of Social Policy (CSSP), Children’s Defense Fund, ideas42, National Women’s Law Center (NWLC), Prosperity Now, UnidosUS, University of California, Berkeley, and Urban-Brookings Tax Policy Center. CLASP thanks the Heising-Simons Foundation for generously funding this project.
July 2021 Survey
October 2021 Survey
July 2022 Survey
By Indivar Dutta-Gupta
This is the second in a series of commentaries from CLASP experts that explore dimensions of poverty ahead of the U.S. Census Bureau’s annual release of poverty and income statistics from the previous year. On September 12, we’ll get a snapshot of the economic hardship children, youth and young adults, and families experienced in 2022. Ahead of the release, CLASP experts will offer key insights on the long-term effects of child poverty, promising policy solutions for ending child poverty, links between poverty and mental health, why it’s important to have a more accurate measurement of poverty, and what trends we expect to see in this year’s poverty data.
A family’s income during the prenatal and early years of a child’s life plays a significant role in her health, well-being, and cognitive development, all of which shape her future outcomes. Yet, early childhood is also the time when household incomes can become more volatile, particularly in those headed by single mothers. Evidence abounds on the positive impact that income support programs—especially cash transfers—have on children.
As long ago as the Mother’s Pension program in the early 20th century, we saw that providing cash to families affected by disability resulted in greater longevity and educational attainment as well as higher incomes in adulthood among boys. More recently, a study found that families who received $1,000 more in child tax benefits from 1999 to 2020 had fewer interactions with child welfare and fewer placements in foster care. Yet another study found that a $1,000 increase in income raised children’s math and reading scores. And just in the last few years, we saw that pandemic-era cash transfers reduced the incidence of low birthweight, which can result in adverse health outcomes later in life.
Two years ago, the Congress and the Biden Administration pursued a bold evidence-based experiment by boosting family incomes as part of the pandemic-era relief package, the American Rescue Plan. The expanded Child Tax Credit (CTC) came as close to a universal child allowance as it had in its 24-year history. Unlike previous iterations, the 2021 CTC was fully refundable, meaning it was available even to families with no reported earnings or federal income tax liability. It also increased the annual credit per child to $3,600 for children under age 6 and $3,000 for children ages 6 to 17. Families generally received half the credit through monthly payments from July to December 2021 and the other half in a lump sum after filing their tax returns in early 2022.
A historic reduction in child poverty and material hardship
The expanded CTC achieved something monumental: it kept 2.9 million children out of poverty, cutting the child poverty rate by nearly half—from 9.7 percent in 2020 to 5.2 percent in 2021, the largest one-year decline in the child poverty rate on record. Black and Latino/Hispanic children disproportionately benefited in part because previous versions of the CTC did not allow families with low to no earnings to claim the credit. Black and Latino/Hispanic families are more likely to have low incomes due to labor market discrimination, occupational segregation, systemic racism, and other structural barriers. As a result of the expanded CTC, child poverty rates among Black and Latino/Hispanic children shrank by a stunning 8.8 percentage points and 6.3 percentage points, respectively, from 2020 to 2021.Unfortunately, Congress let the expanded version of the CTC expire, and we have reverted to the policy that was passed as part of the 2017 Tax Cut and Jobs Act (TCJA). This less-effective version offers up to $2,000 annually per child and is not fully refundable, meaning higher-income families are more likely to benefit and working-class families who need the income boost the most aren’t benefiting at all or as much. The Center on Budget and Policy Priorities estimates that 19 million children under 17 do not receive the full credit, including 45 percent of Black children, 39 percent of Latino children, and 38 percent of American Indian/Alaskan Native children, because of a lack of full refundability. The TCJA also denied the CTC to children who have Individual Taxpayer Identification Numbers (ITINs) instead of Social Security numbers, a blatantly xenophobic and racist departure from the pre-2017 CTC that undermines our own communities and national potential.
How did the expanded CTC help parents?
In an October 2021 survey conducted by CLASP, polling firm Ipsos, and other organizations, parents reported spending the extra income from the CTC on meeting their basic needs and paying grocery bills, rent, or mortgage payments. Nearly 70 percent of respondents said the payments made them feel less financial stress. Black respondents were twice as likely as white respondents to say that the CTC payments helped them work more. Notably, these trends reversed and families faced greater financial strain once the monthly payments ended, according to a July 2022 survey CLASP and partners conducted with parents.
Next steps: Make the CTC fully refundable and inclusive
Although the 2021 expanded CTC didn’t end child poverty for good, it made a significant dent by making it easy for families with the lowest incomes to claim the credit. It was as close to unconditional guaranteed income for families as we had ever come as a nation—and it worked.
I urge Congress to make the CTC fully refundable on a permanent basis. A fully refundable credit is important not only because it reaches families with the lowest incomes, but also because payments are automated and predictable. Monthly payments are important for helping families meet ongoing basic needs, like paying rent, food, and utilities. By one estimate, every dollar spent on a CTC that is more like a universal child allowance generates a return on investment of nearly $10 to society. In addition, for the CTC to reach its full potential to reduce child poverty, it should be accessible to those who are excluded, including children with ITINs and youth either in foster care or otherwise ineligible to be claimed as dependents. We should also ensure families with newborns receive a monthly advance payment.
I also urge the IRS to make the CTC more accessible to families who don’t need to file a tax return or struggle to file one. The IRS should continue experimenting with simplified portals that include free e-file tools, features for reporting new children in the household, and other forms of taxpayer assistance.
But we can’t tell what’s working if we don’t use a poverty measure that reflects the value of public supports, including tax credits, health care, and child care. We’ll explore this topic in our next post.
The Children Thrive Action Network (CTAN), along with seven partners and one independent researcher, held listening sessions across the country to learn about the concerns, desires, and challenges of immigrant parents and youth. The resulting report focuses on the findings of these nine sessions, sharing the voices of the 71 participants; their experiences and thoughts; and the issues they think should be CTAN’s focus. CTAN, which is co-led by CLASP, will incorporate these findings into its advocacy plan alongside consideration of the network’s strengths and the context of the greater immigration movement.
Read the report here.
By Teon Hayes and Elizabeth Lower-Basch
The Supplemental Nutrition Assistance Program (SNAP) helps people with low incomes avoid hunger and afford food. It stimulates the economy, improves individuals’ success at school and work, and promotes better health.
SNAP’s Employment and Training (E&T) program is designed to assist participants in gaining skills, training, or work experience that helps them obtain regular employment. States operate these programs and have flexibility in the services they provide, who receives them, and the entities that deliver these services. However, SNAP E&T has onerous restrictions and entrenched biases that most hurt communities of color. Several policies are rooted in racism and classism. By perpetuating systems of oppression, SNAP E&T pushes critical nutrition aid out of reach. These obstacles keep the program from serving as a supportive pathway to opportunity.
In this report, we analyze these challenges and offers recommendations to advance racial equity within SNAP E&T and make it function more effectively.