House Budget Committee Report Understates Effect of Safety Net for ChildrenPoverty & Family Economics
This week House Budget Committee Chair Paul Ryan released The War on Poverty: 50 Years Later, which examines a number of government initiatives important for reducing the number of children in poverty or alleviating the symptoms of poverty for children.
While we applaud Chairman Ryan for raising the issue of poverty, we are disappointed that much of the report is misleading in its analysis of the effect of these programs on reducing poverty. The report is particularly misleading when it comes to children because it often understates or outright fails to mention the effectiveness of these initiatives in improving outcomes for children and reducing the rate of child poverty. For example, in the section on Medicaid and the Children’s Health Insurance Program (CHIP), there is no discussion that due to these programs, the rate of uninsured children in the United States is at an all time low of just 8.9 percent.
Children are the age group most likely to live in poverty. In 2012, 21.8 percent (16.1 million children) lived in poverty in the United States. This is in comparison to 15 percent (or 46.5 million) of all Americans. While children continue to bear the brunt of the recession’s effects, the child poverty rate would be much higher if it was not for programs established in the War on Poverty and later years. We know from U.S. Census data that the Supplemental Nutrition Assistance Program (SNAP, or food stamps) reduced child poverty in 2012 by 1.67 million children, while the Earned Income Tax Credit (EITC) lifted 3.1 million children out of poverty in 2011.
The effect of these programs is evident when contrasting the official poverty measure with the more recent Supplemental Poverty Measure (SPM), which takes into account a number of factors not considered by the traditional poverty measure, including some of a household’s income and expenses and therefore presents a more detailed look at poverty in the United States.
Yet the Budget Committee report gives little mention to the SPM, despite numerous warnings from economists – including two that were invited by the House Budget Committee Chair as witnesses to a recent hearing – that the official poverty measure is not accurate when tracking changes in the poverty rate. This is despite the fact that the report focuses on marginal tax rates that take into account the same programs the SPM does, and therefore the report overstates the case of marginal tax rates that actually affect only a small number of families.
The 50th anniversary of the War on Poverty presents an opportunity to study the effects of the War on Poverty for children, yet such a study should be both comprehensive and accurate. The Budget Committee report is unfortunately neither, and instead understates the effects of existing initiatives at reducing child poverty while missing the opportunity to highlight strategies that work to reduce poverty for other age groups and could be applied to children.
We know what works to reduce child poverty. We can look to the United Kingdom, where in 1999 the government established a national target to reduce child poverty, which united the Tory and Labour parties behind a goal of halving child poverty in ten years. Through a mixture of investments for children, measures to make work pay, and efforts to increase financial support for families, the British government halved child poverty in 2009. While they have been struggling more recently to maintain this reduction in child poverty, there is much we can learn from the United Kingdom.
Now we just need to act, and start with what has had success here in the US. Let’s not miss this opportunity to build on what works and do right by our children.
Additional materials on the success of government initiatives in reducing poverty and improving outcomes for children in the United States:
CHIP Works for America’s Children
Education 50 Years Since the War on Poverty
War on Poverty Helps the Youngest Children, But We Can Do More
Child Abuse and Neglect:
Poverty and Child Neglect: What we Know and What we Need to Do