Where Will the House Budget Committee Go From Its War on the War on Poverty?

March 6, 2014

House Republican Budget Committee staff have been very busy. They’ve produced a 240-page report that summarizes — and provides snippets of research on — 92 programs creatively attributed to the War on Poverty.

“Creatively” because some of the programs have little or no bearing on efforts to reduce poverty, e.g., homeownership assistance, the fresh fruit and vegetable promotion program for elementary school children.

By and large, the research snippets are more balanced than one might expect — a triumph of low expectations, I suppose.

Ron Garver at The Fiscal Times cites four researchers who claim the report misrepresents or manipulates their findings. We get other examples of cherry-picking and misrepresentation in the Center on Budget and Policy Priorities’ commentary on the report.

There’s notable bias in presentation too — for example, the bolded conclusion that “Head Start does not improve student outcomes,” though the research cited shows it sometimes does, as Jonathan Cohn at New Republic notes.

And a HUGE exception to balance for Medicaid, as one might expect from a Committee that’s likely to again propose block-granting the program and slowly starving it. “Zombie Medicaid arguments,” proclaims the Incidental Economist‘s headline.

As this indicates, policy wonks of a progressive persuasion have already weighed in on the report — mostly, though not exclusively trying to set the record straight on what the research actually tells us.

I want instead to focus on a couple of the major messages, explicit and otherwise.

The report stretches to sweep in as many programs as possible in part because one of its messages is that there are far too many of them. Congress created them “to solve different problems — and at different times,” it says. As a result, “there is little coordination among them.”

Overall, this seems to me a reasonable assessment. Where it might take us is another matter.

The House SKILLS Act, for example, blows away 18 35 job training programs and rolls the surviving 17 into one big block grant. It also freezes funding for seven years — virtually ensuring that some of the formerly-targeted populations lose out to the more readily employable.

The larger problem, the report says, is that many programs are “a poverty trap” because they’re means-tested, i.e., provide benefits only to people below a certain income level.

They’re thus a disincentive to work — or at least to doing your best to get ahead because if you do, you face a “high marginal tax rate.” In other words, what you lose in benefits partially offsets what you gain in earnings.

No one, so far as I know, disputes the fact of marginal tax rates. They’re an inherent feature of programs that limit eligibility to people below a certain income level.

How big they are depends on who’s estimating and for what programs. Whether they actually “discourage … [people] from making more money,” as the report says, is less certain.

The Congressional Budget Office is inclined to think they do, though only for some people already in the workforce. Economist-blogger Jared Bernstein says that leading research has found the impact to be negligible.

Again, the question is where does this take us? Not, I trust, to the elimination of all means-tested programs. But like as not, to more expansive work requirements — and to time limits, since these would override any long-term disincentive.

Welfare “reform” is thus again pronounced a rip-roaring success — one of the instances of research misuse cited in the Garver article and by CBPP.

The report is surely a set-up for further spending cuts. Casting a wide net enables the Budget Committee to come up with a total anti-poverty bill of $799 billion in 2012 — and “trillions” over the last 50 years.

Ironically, as Cohn observes, the defects the report finds in a number of anti-poverty programs imply the need to spend more money.

But Budget Committee Chairman Paul Ryan seems to have something more grandiose in mind than fixing fixable problems, even when that might yield some savings — and something more grandiose than slashing here, slashing there.

In his view, federal anti-poverty programs need to be “entirely reimagined,” according to an indirect quote in the Washington Post.

We get a whiff of where he might be tending in a key test the report imposes whenever remotely feasible: Does the program encourage or discourage labor force participation?

Thus, for example, all the “evidence” cited to evaluate Supplemental Security Income relates to employment. Recall that adult SSI recipients under 65 are, by definition, blind or unable “to do any substantial gainful activity.”

SNAP (the food stamp program) is also viewed through the lens of labor force participation, as well as poverty reduction, based on the cash value of the benefit. “Evidence” for its effects on reducing hunger is apparently irrelevant.

But maybe there’s no real reimagining behind the words. As The New York Times editorial board observes, the report provides a “high-minded excuse” for Congressional Republicans “to eviscerate” major safety-net programs, as they’re already hell bent on doing.

Some also seem to cherish the notion that the reforms Ryan says it’s a precursor to will persuade us that they truly care about “people who’ve fallen through the cracks.”

Not, I think, if the report foreshadows what we’ll soon see in the House budget plan.


New Reports Provide Different Perspectives on Poverty

January 13, 2014

One thing you can say about last week’s War on Poverty anniversary. It sure produced a lot of grist for my mill. I’m having trouble wrapping my mind around it all.

So for now I’ll focus on two very different perspectives provided by new reports. Both speak in different ways to unfinished business. And both indicate needs to modify our strategies because conditions have changed and experience has illuminated our difficulties, as President Johnson foresaw when he proposed the War.

One, from the Census Bureau, tells us that poverty is a common experience and a usually temporary, though sometimes recurrent one. These findings are generally similar to research I wrote about earlier, but based on more current data.

The other report, from the Urban Institute, tells us that some portion of the population is not only persistently poor, but likely to cycle in and out of deep poverty — or to remain there.

Episodic Poverty

The Census Bureau carved out two three-year periods from its Survey of Income and Program Participation, which collects data from the same sample of individuals every four months for at least two and a half years.

Not surprisingly, poverty figures were higher for the second period — January 2009-December 2011. But the basic picture is the same as for the first, which ended shortly after the recession set in.

During the more recent period, 31.6% of the population lived below the applicable poverty threshold for at least two months — more than double the official annual rate. But only 3.5% was in poverty for the entire three years.

By 2011, 5.4% of people who hadn’t been officially poor in 2009 were. At the same time, 36.5% of those who’d been poor in 2009 no longer were.

The median length of time for any single spell of poverty was slightly over six and a half months. Only 15.2% of spells lasted more than two years.

We see a high degree of economic insecurity — and not only in the very large percent of Americans who suffered at least one spell of poverty within a relatively short period of time.

Nearly half of those who recovered sufficiently to rise above the applicable poverty threshold — 6.2 million people — still had family incomes below 150% of it. For a three-person family, this was less, on average, than about $26,875 in 2011.

An additional 11.9 million who didn’t fall into poverty dropped from 150% of the threshold to somewhere closer to it. So even within this relatively short period, some 18.1 million people were on the verge of poverty.

Deep and Persistent Poverty

“Deep poverty” here means having a household income below half the applicable poverty threshold — less than $9,249 a year for a single parent with two children in 2012. Well over 20.3 million people in the U.S. were that poor last year — about 6.6% of the population.

Urban Institute researchers have found that some portion of them are stuck in poverty — and worse. Many are “hovering around the deep poverty threshold, without ever earning enough to escape poverty altogether.”

Theirs is a “chronic state,” an Institute account of the research says. And it can persist from generation to generation. How many are bemired there the report doesn’t say — and perhaps couldn’t.

The main thrust is that deep, persistent poverty is rooted in a complex of serious personal challenges, e.g., drug and/or alcohol addiction, severe mental or physical disabilities, chronic illness.

Because of or in addition to these, persistently poor people have other “co-occurring challenges,” e.g., homelessness, functional illiteracy, a criminal record.

Our safety net programs aren’t designed for them, the researchers say. Many, in fact, are conditioned on work — the Earned Income Tax Credit, for example, and Temporary Assistance for Needy Families. SNAP (the food stamp program) has work requirements also, though only for able-bodied adults without dependents.

The report itself is addressed to foundations, which could contribute to solutions in various ways. But it points to the need for policy changes that run counter to the vision underlying virtually all plans for what to do about poverty in America.

Because it involves accepting the fact that “deeply poor adults may never be self-sufficient” or even able to work steadily. In some cases, perhaps not at all — and for reasons that don’t qualify them for disability benefits.

Policymakers may, however, take to the other piece of the Institute’s agenda — early and intensive interventions to break the cycle.

About 3% of children — and an alarming 15% of those who are black — spend more than half their childhoods in deep poverty. We have lots of research documenting the long-term damages of childhood poverty. They’re presumably more common and/or severe in cases of deep childhood poverty.

We also have studies indicating that some programs can do a lot to mitigate them — not only programs that address basic needs like good nutrition and health care, but early childhood education and home visiting programs.

The Urban Institute also mentions several small-scale holistic initiatives that may provide models for “blunting the effects” of chronic poverty. “We can sure make things better for the kids,” one of the researchers says.

But meanwhile, we’ve got a system based on expectations that may be wholly unrealistic for the parents instead of a commitment to provide whatever services and supports they need — and for however long they need them.


Year End Checkup for Shared Prosperity in DC

January 2, 2014

End of year seems a good time to look at how the District of Columbia is progressing — or not — toward becoming One City. So I turned to the indicators that the Half in Ten campaign published a couple of weeks ago.

We do see progress, especially if we look back to the first set, which, for the most part, shows where we were in 2010. But it’s a fragmentary picture — even more so if we focus only on the indicators Half in Ten could update, as I will here.

About the Indicators

Half in Ten chose the indicators in 2011, when it reset the clock for its original goal — cutting poverty in half in 10 years.

As I wrote at the time, they reflect a broader vision — not only less poverty, but more broadly-shared prosperity. For the latter, Half in Ten defined three priorities — creating good jobs, promoting family economic security and strengthening families and communities.

It picked 10 indicators for states and the District, presumably based in part on data it could directly access or secure from other organizations.

Even so, some of the data in latest set aren’t as current as one would wish. And the good job indicators are largely indicators of people who’d qualify for good jobs, rather than the extent to which such jobs are available.

The online report is still, so far as I know, the only single source of so many figures that allow us to measure progress toward social and economic justice.

The report also provides two bases for assessing each state-level figure — a best-to-worst numerical ranking and a better-or-worse figure, based on what Half in Ten calls the “U.S. average.” This is apparently another term for the nationwide rate.

I’m a bit queasy about comparing the District’s rates to the averages. (See note below.) But I’ll use the averages because they may provide a useful perspective. The rankings, as I’ve said before, are an apples-to-oranges comparison, so far as the District is concerned.

Poverty Reduction

As you may already know, the poverty rate in the District was 18.2% last year. This was about 3.1% higher than the U.S. average, according to Half in Ten.* But it was 2% lower than in 2010.

The child poverty rate shows more progress. It was 26.5% in 2012, as compared to 30.4% in 2010. But it was 5.5% higher than the U.S. average. And that, obviously, was alarmingly high too.

Access to Good Jobs

The unemployment rate in the District 8.9% last year — 0.8% higher than the U.S. average. The rate in 2010 was 9.9%.

How much of the dip indicates more residents working is an open question, since the rate doesn’t include jobless workers who’ve given up looking or potential workers who decided not to start. We know that they’ve been a major reason the national unemployment rate has dropped.

The disconnected youth rate, i.e., the percent of teens and young adults who were neither in school nor working, dropped from 17% in 2010 to 14% last year. This is 2% lower than the U.S. average, but the same as in 2011.

Economic Security

Health insurance coverage is one of the District’s strongest points. Only 9.14% of residents under 65 and below 138% of the federal poverty line (the cut-off for Medicaid eligibility under the Affordable Care Act) had no health insurance during 2012.

This is 8.6% lower than the U.S. average and 3.92% lower than the District’s own rate in 2011, the earliest year Half in Ten could report.

The District also does fairly well on food insecurity — at least in light of the poverty rate and the high costs of housing here. During 2010-12, 12% of D.C. households didn’t always have the resources to provide enough food for all members.

This is about 1.9% lower than the U.S. average and 1% lower than the District’s initial two-year rate.

On the other hand, only 17% of District residents who were jobless and looking for work in 2012 received unemployment benefits. This is nearly 11.7% lower than the U.S. average, though about 1.5% higher than in 2010.

It’s hard to know what accounts for such a low rate. One factor probably is that many laid-off workers in our thriving restaurant, hotel and home services sectors couldn’t meet the minimum earnings requirements for unemployment benefits.

Stronger Families and Communities

Just two updated indicators in this category — and neither altogether current. One is the teen birth rate, i.e., the number of births to women between the ages of 15 and 19 for every 1,000 in this age group. In 2011, it was 41.8 — about 10.4% more than the U.S. average. But it was 45.5 in 2010.

The other indicator is the number of children per 1,000 who were in foster care. In 2011, there were 16 — about 10.3% more than the U.S. average. But the rate was 20 per 1,000 only the year before.

These are not only indicators of family and community strength. The teen birth rate is linked to child and maternal health, to high school completion and thus to employment — and to poverty, though perhaps less as cause than effect.

Similarly, growing up in foster care has been linked to a host of later problems, including some flagged by the indicators here, e.g., poverty, disconnection from both school and work.

What’s true for these indicators is true for others as well. Each gives us a measure of individual and community well-being, but the measures are inter-connected in a variety of ways.

Which, I suppose, merely reaffirms the need for a holistic approach to both poverty reduction and a more equitable sharing of the prosperity in this very wealthy country.

* The source for the District’s poverty rate is the American Community Survey’s one-year estimate. However, the one-year estimate for the nation as a whole produces a smaller “worse than” difference than the Half in Ten figure I’ve replicated. By my calculations, the figure should be about 2.3%.


Survey Affords Insights Into Lives and Views of Low-Wage Workers

December 5, 2013

It’s no news that millions of workers in this country don’t earn enough to sustain themselves and their families. Or that low-wage occupations are among the fastest growing in our recovering economy. Or that they’re ranked among the highest for projected job growth through the rest of this decade.

Oxfam America decided to shed some light on the “harsh reality” of low-wage workers’ lives and their views on key issues related to their prospects and priorities. So it commissioned a survey. And now we have the results.

For the purposes of the survey, low-wage workers were those who earned less than $14 an hour or, if unemployed, had earned less at their last job. By this measure, at least a quarter of all American workers qualify, according to the shorter, more rhetorical survey report.

Some of the survey results are what you’d expect. Some not, I think. Here’s a sample.

Hard to Make Ends Meet

A majority of low-wage workers are barely getting by, at best. Forty-two percent said their households could just meet basic living expenses. An additional 17% said they couldn’t even do that.

What’s especially significant here is that we’ve reason to believe they have a more constricted view of basic expenses than most Americans do.

When asked how much they thought a family of four would need to get by, their median answer was about $37,000 a year. The median response to a recent Gallop poll of adults in the U.S. was $13,000 higher.

Nearly half (47%) of the low-wage workers said they’d had to borrow money to make ends meet at least once during the past four years. Thirty-two percent had sold or pawned personal items during the past two.

Not Much Help From Government Assistance Programs

Only 29% of the workers had received SNAP (food stamp) benefits, and only a quarter had been enrolled in Medicaid. The report doesn’t indicate why large majorities hadn’t.

One could guess that household earnings put at least some over the income thresholds. For many who were childless, however, Medicaid would have been out of the question, even with minimal earnings.

A mere 9% of the workers benefited from publicly-subsidized housing. Much of the explanation here surely lies in the long-term gap between federal funding and need, rather than income thresholds.

Only 14% had received unemployment insurance benefits. We don’t know how many of the rest had been jobless during some portion of the two-year period the survey asked about, but do know that 70% had been laid off at least once during the past four years.

With such a large gap, it seems reasonable to guess that many, especially the part-timers, didn’t qualify for UI benefits because of their state’s minimum earnings standard.

Not surprisingly, nearly half worried about not being able to afford healthy, nutritious food for themselves and their families and/or falling behind on housing payments.

Slightly over two-thirds worried about incurring unaffordable health care expenses. And the highest percent of all (69%) worried about not having enough money for retirement, Social Security notwithstanding.

Not Getting Ahead

Sixty-two percent of the low-wage workers believe that most people can get ahead if they’re willing to work hard.

But at the same time, 76% believe that people are more likely to fall out of the middle class than low-income people to rise into it. Only 12% thought the latter was more common today.

Just half said they were hopeful and confident they could achieve their economic goals.

Their experience undoubtedly has something to do with their dim view of prospects for upward mobility. Forty-one percent said that they and their families were worse off than they were five years ago. An additional 21% said no better off.

Over half the workers (52%) had formerly had a job that paid more than their current job. The figures are considerably higher for part-time workers and those who’d been laid off in the recent past (61% and 70% respectively).

Solidly “Middle-Class” Values Anyway

The survey results confirm what Professor Mark Rank recently wrote about the “mainstream” values and behaviors of people at the bottom of the income scale.

When asked what they would do with a $2 an hour raise, 34% of the workers who’d borrowed money said they’d use most of it to pay off debt. Sixteen percent of all the workers said they’d put most of it into retirement savings.

Only 6% said they’d spend it on things like going out more often or taking a vacation.

Ninety-four percent of the workers said that performing their job well was extremely or very important for them — a higher percent than those who said this of having a job that paid enough for them to live comfortably.

While somewhat over half (57%) said that getting a college degree was a high-priority goal, 81% ranked the goal as extremely or very important for their children.

Being in the middle class was that important for only 37%, but having their children better off financially than they was a top-priority goal for 89%.

Does Congress Care?

A solid majority (65%) believe that Congress mostly passes laws that benefit the wealthy, as compared to a (mystifying) 9% who believe most of the laws it passes are to benefit low-income people.

At the same time, majorities, of varying percents, believe the government should ensure that everyone has basic necessities, e.g., enough food, health care, a roof over their head.

Should Congress decide to care about measures low-income workers think would be helpful, the survey report includes a list.

Too lengthy to replicate here. But interestingly, the largest majority endorsed school-business partnerships to better prepare students for jobs when they graduate.

The hand-up-not-hand-out crowd should love this, though I doubt they’ll care for much of the rest.


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