President Obama's policies kept poverty from growing in 2009, despite the rescession, according to new information released today by the non-partisan Center on Budget and Policy Priorities:
Despite a deep recession, very high unemployment, and widespread hardship, a combination of existing safety net programs and temporary expansions in them enacted in 2009 all but prevented a rise in the poverty rate that year, according to a Center analysis of new poverty data the U.S. Census Bureau released this week that includes the effects of non-cash benefits and tax credits. This is a remarkable achievement; poverty usually burgeons in major recessions.
These findings come to light at an important time — just as Congress prepares for a major debate on the role of government in addressing economic and social problems.
The poverty protection came partly from existing programs — such as unemployment insurance, assistance programs for low-income households, and tax credits for low-income working families. But the bulk of the poverty protection came from improvements that the 2009 Recovery Act (ARRA) made in various programs. Although the Recovery Act was designed chiefly to bolster a collapsing economy, it generated the important side effect of protecting millions of families against poverty and massive income losses. Center analysis of the new Census data shows that the Recovery Act kept more than 4.5 million people out of poverty in 2009: 1.3 million people through extensions and expansions of federal unemployment benefits, 1.5 million people through improvements in the Child Tax Credit and Earned Income Tax Credit, nearly 1 million people through the Making Work Pay tax credit, and another 700,000 people through an increase in benefit levels for the SNAP program (previously called food stamps).
The impact of these programs helps to explain why, under the “alternative” poverty measures that the Census Bureau released yesterday — which count non-cash benefits like food stamps and tax credits and which most analysts consider superior to the official poverty measure — poverty did not rise between 2008 and 2009, even as the economy fell deeper into recession, unemployment increased sharply, and many Americans lost their homes to foreclosure. The official poverty measure misses these effects because it counts only conventional cash income and does not reflect the income that non-cash benefits and tax credits provide.
Unfortunately, the new majority party in the U.S. House hopes to cut these successful programs to pay, in part, for tax cuts that benefit the wealthiest Americans. That cannot be allowed to happen. Nonetheless, the poverty rate is obscenely high. 43.6 million Americans lived in poverty in 2009. Not to have that number increase is an achievement the White House can be proud of but a poverty rate that high indicates a moral crisis in America.
I still hope that President Obama will address poverty in his upcoming State of the Union Address and that he will lay out clearly for the American people a plan for reducing poverty by 50% over the next ten years.
