Building on Successful Anti-Poverty Policies and Avoiding What Doesn’t Work
Over the last month or so, I have testified about America’s anti-poverty policies before two Congressional committees—the U.S. House Ways and Means Committee on May 24 and the U.S. Senate Committee on Homeland Security and Governmental Affairs on June 22. Both hearings offered the opportunity to highlight the important accomplishments of the national safety net, show how the low-wage labor market and remaining gaps in the safety net take a serious toll on too many Americans, and sketch a vision of next steps to strengthen opportunity and reduce poverty.
The committee hearings were held against the backdrop of the proposal on poverty, opportunity, and upward mobility issued in early June by the House Republican Task Force, under the leadership of Speaker Paul Ryan. Therefore, my testimony allowed me to address, head-on, some of the ideas proposed by the Speaker and his fellow Congressional leaders. Here’s a summary of points I made at both hearings, grounded in the strong and growing research base about poverty and opportunity, as well as CLASP’s experience with advocates and decision-makers around the country.
First, the nation’s core economic security programs are highly effective: they cut poverty almost in half, improve nutrition and health care for millions of people, and promote work. In 2014, the Census Bureau’s analysis of the Supplemental Poverty Measure (SPM) showed that refundable tax credits, such as the Earned Income Tax Credit (EITC) and child tax credit (CTC), reduced overall poverty (as measured by the SPM) by 3.1 percentage points and child poverty by a remarkable 7.1 percentage points. Similarly, Supplemental Nutrition Assistance Program (SNAP) benefits reduced overall poverty by 1.5 percentage points and child poverty by 2.8 percent. Researchers at Columbia University who used similar methods to analyze the effect of these key programs over time found that in 2012, the most recent year available to them, government tax and transfer policies reduced the share of people who are poor by almost half, from 29 percent to 16 percent. By contrast, in 1967, tax and transfer programs reduced poverty by just 1 percentage point, from 27 percent to 26 percent.
I also reviewed the large body of evidence showing that safety net programs such as Medicaid, SNAP, the EITC, and child care subsidies support work, helping people stabilize their lives so that they can work more steadily and move up on the job. In fact, most people who get help from the major programs are working—they just don’t earn enough to make ends meet. Typically, it is not too much help but too little that holds people back from working and advancing on the job—for example, because of capped resources, child care assistance reaches just one in six eligible children, making it very hard for parents who can’t get this help to get or keep work. And recent policy changes have improved the safety net as a support to work: in particular, the 31 states and Washington, D.C., that have expanded Medicaid under the Affordable Care Act have removed one of the most damaging “cliff effects” that would previously have faced low-income workers. In these states, workers no longer have to fear that taking a job or increasing their hours could put their health insurance at risk.
Finally, a growing body of rigorous research shows that these supports have positive effects on children’s health, work trajectory, and income many years later. For example, expanding health insurance coverage for low-income children has large effects on high school completion, college attendance, and college completion, and expanded Medicaid coverage for pregnant women and infants contributes to higher rates of intergenerational upward mobility. Having access to SNAP in early childhood improves adult outcomes including health and economic self-sufficiency.
Second, changes in the economy—which have fostered low-wage jobs that are also unstable, lack adequate hours, and require volatile, last-minute job schedules—mean that high employment rates do not translate into low poverty rates. Nearly 70 percent of poor children live in families with at least one worker—their problem isn’t reluctance to work but low wages, insecure jobs, or too few hours. In addition, remaining gaps in the safety net also lead to economic distress and lost opportunities for workers to be productive and children to thrive. The nation’s most vulnerable groups include America’s next generation of children and young adults (particularly babies, toddlers, and their parents). Children and young adults of color are particularly hard-hit, in large part because of systemic barriers that hold back their access to good jobs—posing a major challenge to the nation’s future because of their central role as the coming majority of America’s working-age citizens. While the safety net makes an important difference in their lives, too many are left behind by inadequate funding or program rules that do not reflect the realities of today’s economy.
Third, community-based innovations are most effective when they build on the foundation of a strong safety net. Research demonstrates that families who are highly vulnerable and face multiple challenges—a group that is often the target of intensive community programs—are especially likely to need health and mental health services, as well as financial support in meeting basic needs such as food and shelter while they address more long-term challenges. Therefore, a priority in supporting community innovation should be expanding Medicaid in all states and ensuring continued support for SNAP and other economic supports nationwide.
When I led the District of Columbia’s child welfare agency in the years before the Affordable Care Act, I always found it tragic when a child would enter our care as a result of her mother having an untreated behavioral health problem such as depression—because if the parent had been able to get treatment earlier, the child might have been spared both the trauma of maltreatment and the trauma of removal from her family. But in the absence of health care for those families, we could only try small-scale innovations to help a very few.
Today, the District along with the 31 states that expanded Medicaid have an extraordinary opportunity to meet the health and mental health needs of vulnerable families. At CLASP, we are partnering with both community innovators and state and federal policymakers to seize this opportunity.
Finally, to reduce poverty and expand opportunity, Congress should avoid bad ideas—those that evidence demonstrates don’t work or cause harm—and seize opportunities that build on research and experience.
One example of bad ideas proposed by Republican policymakers is block grants—by any name—which all the available evidence shows don’t work for core safety net programs. Their appropriations shrink drastically over time and they cannot respond to economic downturns. During the recent Great Recession, SNAP and Medicaid, which are not block grants, provided greater support to states, communities, and families as need rose. But the capped TANF block grant left families and states without resources just when they needed help most.
In addition, overly flexible approaches, such as block grants or large-scale waivers, can divert funds from programs’ core mission and are ill-suited to supporting nationwide goals—such as ensuring that every American starts life healthy and well nourished. Instead, they contribute to disparate life chances based on where a child is born. For example, the most recent available data show that states spent just over a quarter of TANF and state maintenance of effort funds on cash assistance, and another quarter on work activities and child care. In 16 states, these core purposes of TANF accounted for less than one-third of TANF and related state spending. The remaining funds went to a variety of state services and supports for low-income families, in some cases supplanting previous state spending.
Another bad idea is so-called work requirements that are counter-productive, do not build on the best available evidence about what works, or—even if they are described as “work requirements” —that in fact have nothing to do with work, as in the SNAP time limits for “able-bodied adults without dependents.” Strategies to encourage work across benefit programs should focus on making effective work and training opportunities available, drawing on the lessons of the recent workforce reauthorization and of successful local and state initiatives. They should never disqualify individuals from benefits when no appropriate training or work experience has been offered to them; and they should never be a condition for children’s access to benefits or for anyone’s access to health insurance.
Therefore, to reduce poverty and renew communities, Congress needs to tackle the economic headwinds facing workers and fill remaining gaps in the safety net. I recommended five concrete next steps that draw on a strong evidence base:
- Ensure access to high-quality child care and early education. High-quality child care and early education programs are central to parents’ work and to children’s wellbeing, development, and opportunities to escape poverty as adults—yet few low-income parents can afford such programs without help. CLASP’s recent state-by-state analysis of disparities in access to the insufficient child care slots that now exist finds that access for all children and in all states is extremely limited but that Hispanic/Latino children have even worse access, with only 8 percent of eligible children getting help. Guaranteeing child care assistance for all low-income parents with young children, as proposed by President Obama in the 2017 budget, would go a long way to expand economic opportunity for all families.
- Expand effective workforce development programs and career opportunities. The Workforce Innovation and Opportunity Act (WIOA) enacted by the Congress in 2014 includes improvements in workforce development programs to give low-income workers access to good jobs and careers. Given the high levels of economic distress among youth and young adults, including especially youth and young adults of color, Congress should make substantial investments in youth employment, including but not limited to summer employment, with the jobs carefully linked to learning and career development.
- Tear down financial barriers to postsecondary success. Postsecondary credentials are crucial for economic success in today’s labor market. Yet far too many students fail to complete the education they need because of financial barriers. Half of today’s undergraduates are independent students—that is, paying for their own education rather than dependent on their parents—and one quarter are parents. These students have unmet need—the gap between the cost of going to college and the resources that students have available to pay for those costs—which can mean that keeping food on the table and paying the rent become overwhelming barriers to completing a postsecondary credential. Congress should reform the Higher Education Act to make financial aid responsive to today’s students and address the needs and attendance patterns of nontraditional and low-income students.
- Fix gaps in the safety net for the neediest Americans. As noted earlier, despite the broad-brush successes of the safety net, its gaps take a serious toll on the neediest Americans. Congress should consider two timely steps to support work and meet basic needs: Support work by building on the successes of the EITC and CTC in lifting families with children out of poverty to also reach workers without dependent children, including young adults, and strengthen TANF as both a safety net and a work program.
- Establish minimum standards for wages and job quality, so jobs support rather than destabilize families. Many Americans work hard yet cannot make ends meet because of inadequate wages or hours, unpredictable schedules, and the lack of any paid leave to care for an infant, a sick child or family member or to recover from their own illness. Congress should take up legislation currently before it that addresses all these issues.
Last month, in between my two testimonies to Congress, I had the chance to talk with LaJuana Clark at a public forum on anti-poverty solutions. She is a worker and student who spoke from her own experience about some of the challenges that low-wage workers and students face: what it’s like to try to make ends meet when her employer won’t offer her more than three days a week of work and to garner the energy to succeed in a postsecondary program when she has no car to get there.
That conversation underlined for me what is at stake. It’s not just Congress that needs a better understanding of where we are and where we should go from here but all Americans who believe in opportunity. If the nation is to move in directions that would help LaJuana and millions like her achieve their goals of steady work and economic security, we need to bring to bear the same energy and persistence that she does. At a time of uncertainty and change, when inequality is in the news yet inaccurate stereotypes abound about poor and struggling Americans and the programs that serve them, we need a broad commitment to counter those misconceptions, build on the successes of the safety net, and take the critical next steps towards a vision of economic security for all.