New Census Report Proves Again That Anti-Poverty Programs Work

Only so much number crunching a lone blogger like me can do. So I’m behind the curve on the Census Bureau’s Supplemental Poverty Measure report, issued the same day as the report using the official measure.

As in the past, the SPM shifts poverty rates up and down. The overall poverty rate, for example, is higher — 14.3%, as compared to the official 13.5%. The child poverty rate drops from 19.7% to 16.1%, while the senior poverty rate rises from 8.8% to 14.3%.

These differences, as well as others derive from numerous differences between the measures. For example, the SPM includes the children who aren’t part of the official measure’s poverty universe.*

This is relatively minor, compared to other differences — thresholds among them. Instead of those I’ve nattered about, the SPM begins with consumer spending on four basic needs, plus a small additional for others.

It then deducts for work-related expenses, e.g., transportation, child care, and for child support payments and medical costs that individuals themselves must pay. (Those medical out-of-pockets largely explain the higher senior poverty rate.)

The annual threshold adjustments differ too — and in a way that may make yearly changes in the SPM poverty rates “confusing,” the Center on Budget and Policy Priorities says. It specifically cautions against comparing the new SPM figures to last year’s.

I’ll confine myself then to what we can glean from another major difference. For the official measure, only pre-tax cash income counts in determining whether a household and the members it recognizes were poor.

The SPM deducts for taxes. It also includes income derived from the refundable tax credits and the cash-equivalent value of a some safety net benefits that the federal government funds either entirely or in combination with states.

What we can see, because of an analysis the Bureau provides, is what poverty rates would have been without one or another of the safety net benefits — both cash and cash-equivalent. It folds in Social Security retirement and disability benefits, though they’re not for low-income people only.

As always, Social Security proves the most effective anti-poverty measure we’ve got. Without the benefits it provided, about 26.6 million more people would have been part of the poverty rate, boosting it to over 22.6%.

Well over a third of all seniors would have been poor — nearly triple the rate with those benefits factored in.

The Earned Income Tax Credit and Child Tax Credit again come in second. They lifted about 9.2 million workers and their dependents over the poverty threshold, including 4.8 million children. Their already-high poverty rate would have been 22.6% without the credits.

Not all low-income workers benefited, however. Current law denies the federal EITC to both young and elderly workers. And the credit is very small for age-eligible adults who don’t have children — or who do, but not in their homes for more than half the year.

In short, an anti-poverty measure that works, but could work better. One could say the same for other safety net benefits the SPM report accounts for.

SNAP (the food stamp program), for example, as I’ve often said. Yet even with its current limits, it lifted roughly 4.6 million people, including nearly 2 million children out of poverty last year.

Results for Temporary Assistance for Needy Families, which I’ve also often gone on about, were pathetic — a 0.2% nick in the poverty rate.

An even more pathetic impact from the Low Income Home Energy Assistance Program, which neither the administration nor Congress seems much interested in funding.

We don’t see a large boost over the poverty thresholds from federally-funded housing subsidies either — a generously rounded up 2.5 million fewer poor because of it. In this case, we do have an actively interested administration — and what seems moderate support from majorities in Congress.

But the SPM thresholds take account of what people must spend for housing. And, as everyone knows, housing costs have been rising virtually everywhere.

So federal budgets would need to do more to keep those costs from driving up poverty rates than merely ensure that as many households have vouchers as they do now — or the same chance to live in public housing.

The Census Bureau reports each of the anti-poverty programs separately. So we can’t see how many people were lifted out of poverty by, say, SNAP plus a housing subsidy.

The Center on Budget rolls all the programs together and concludes that they cut the poverty rate almost in half last year.

It also notes, as have other analysts, that households surveyed tend to under-report the benefits they’ve received — mainly just because it’s hard to recall exactly how much one gets, perhaps from multiple sources and usually over some period of time.

At a minimum then, the safety net benefits, plus Social Security lifted about 38.1 million people over their poverty threshold — more seniors than younger people, but still about 7.9 million children.

CBPP warns that cuts in the programs would plunge more people into poverty. That’s, I think, what any fair-minded person would conclude from the SPM analysis.

It shows, with hard numbers, that our major anti-poverty programs work, notwithstanding the constant drumbeat from the right about how they’ve failed. It also shows they could work better — some perhaps if just more amply funded, some surely if also reformed.

* The SPM report adjusts the official rates to include the missing children. So one finds a higher overall poverty rate and higher child poverty rate there.

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