Those Pesky Facts in the War on PovertyPoverty & Family Economics
Facts and evidence can be a mixed bag. There are facts and evidence that sometimes reinforce and other times dispute the thoughts, beliefs and ideology that each of us hold. We should all be open to hearing facts and evidence that challenge our preconceived notions and beliefs. As Mary Roach wrote, “In my experience, the most staunchly held views are based on ignorance or accepted dogma, not carefully considered accumulations of facts. The more you expose the intricacies and realities of the situation, the less clear-cut things become.”
In that light, House Budget Committee Chairman Paul Ryan (R-WI) and his staff are embarking on a review of whether President Johnson’s “War on Poverty” has been effective over the last 50 years. As they reviewed the evidence for the report titled “The War on Poverty: 50 Years Later,” their task was undoubtedly a difficult one and sometimes they were able to look at the evidence and recognize facts that challenged their deeply held notions.
For example, they specifically highlight how programs, including the Veterans Health Administration, the Child Tax Credit, the Earned Income Tax Credit, Title X Family Planning, Ryan White HIV/AIDS Program, Housing Opportunity for Persons with AIDS, Federal Health Centers, Homeless Assistance Grants, Low Income Subsidy for Medicare Part D, the Maternal and Child Health Services Block Grant, Elderly Nutrition Program, Supplemental Nutrition Program for Women, Infants, and Children (WIC), School Breakfast Program, Education for Homeless Children and Youth, the Child Care and Development Block Grant, and YouthBuild, are effective. Thus, they concluded, “Not every program is counterproductive or unnecessary; indeed, some are very important.”
This is significant because it flies in the face of the report’s overall conclusion, which is that, “Federal programs are not only failing to address the problem, they are also in some significant respects making it worse.” Therefore, the House Budget Committee staff is acknowledging, to some extent, that there are success stories with respect to the overall picture, even if their conclusion is far more one-sided.
The Budget Committee Report also highlights other important points for children, such as the problem that 21.8 percent of children live in poverty and the importance that education makes in reducing poverty. In short, we do applaud the Budget Committee staff for raising these points in the report.
But, in other cases, they failed to be open to clear evidence and facts that would challenge their preconceived conclusions and create what can best be described as “losey, goosey” categories to justify a conclusion.
In the hope that the report was issued to actually engage start and engage in a dialogue, there are at least five major problems with the report and the subsequent conclusions that are reached.
First, in order to reach the report’s conclusion that the program’s that are intended to “combat poverty” are largely ineffective and create a “poverty trap,” the 204-page paper completely ignores the dramatic role that Social Security, Medicare, and Medicaid — all cornerstone programs by President Lyndon Johnson in his “War on Poverty” — have played in dramatically driving down poverty, improving health and increasing longevity among our nation’s senior citizens. They are, in fact, significant success stories.
In 1966, a year after [President Lyndon] Johnson expanded Social Security and enacted Medicare and Medicaid, elderly poverty was 28.5 percent. By 2012, it had fallen to 9.1 percent, a decline of about 68 percent.
While the House Budget Committee report rightfully points that an unacceptably high “21.8 percent of children live below the poverty rate” today, how is it they completely ignore the roles played by Social Security, Medicare and Medicaid in reducing poverty among senior citizens by 68 percent? Since Social Security, Medicare are the two largest programs in the federal budget and could not be simply overlooked by the House Budget Committee staff, is it simply because these success stories runs counter to their overall conclusion? Major success simply cannot be acknowledged if your point is that government does not work.
So, to ignore successful “universal” programs like Social Security and Medicare, the House Budget Report only looks at “means-tested” programs as the focus of their report. But, in trying to make the case that means-tested programs can be “poverty traps” or a “hammock,” an obvious solution one might draw is that the nation should adopt universal entitlements instead.
Clearly, this would be a non-starter in conservative circles that have long pushed for means-tested programs rather than universal entitlements. It is conservatives, in fact, that are leading the charge to impose more means-testing into the Medicare program.
Interestingly, Chairman Ryan recently proposed that the country consider adopting a “Universal Credit” that would, as Rob Garver at The Fiscal Times wrote, “[B]oth streamline the various social safety net payments and tax credits the poor receive and, rather than cutting off abruptly when recipients cross a certain income threshold, would taper off as income rises, thereby reducing the disincentive to finding work.”
But, as Garver added:
Given the general animosity toward entitlement benefit recipients among a large segment of the voting public — including much of Ryan’s base — the likelihood of passing legislation that would increase the freedom of benefits recipients to spend money as they see fit is virtually nil.
Second and related to the first point, the report purposely understates the nation’s progress toward reducing the overall poverty rate by using misleading data. According to the report, “In 1965, the poverty rate was 17.3 percent. In 2012, it was 15 percent.” But then, the footnote to that statistic reads, “The Official Poverty Rate does not include government transfers to low-income households.”
While the footnote is appreciated, if you are measuring the impact that government programs have on reducing poverty, then the measure that really matters is the adjusted poverty rate. Buried on page 201 of the House Budget Committee Report, it is acknowledged that an anchored Supplemental Poverty Measure (SPM) is a much better measure than the Official Poverty Rate and that “researchers at Columbia indicate that poverty fell from 22 percent in 1969 to 16 percent in 2012.”
Unfortunately, even that buried acknowledgement in the report’s Appendix is a manipulation of the data. According to Garver, in another article for The Fiscal Times:
The Columbia researchers found that, using their model of the SPM, the poverty rate fell from 26 percent in 1967 to 15 percent in 2012. Ryan only cites data from 1969 onward, ignoring a full 36 percent of the decline.
Clearly, the “War on Poverty” has been far more successful than the House Budget Committee staff would care to acknowledge.
Third, the report misrepresents the purpose of a number of federal programs. For example, although the report states that there are “92 programs to combat poverty,” the fact is that programs like the Maternal and Child Health Services Block Grant, the Ryan White HIV/AIDS Program, and the Fresh Fruit and Vegetable Program appear to be counted among the 92 poverty programs to “combat poverty” when, instead, such programs were designed to either provide health services to certain targeted populations or healthy eating options among children.
Therefore, although the Maternal and Child Health Services Block Grant may not be effective at lifting people out of poverty, it is not the program’s intent. Instead, the program has been rated “effective” by the Office of Management and Budget in contributing to the reduction in infant mortality rates in this country. In Ryan’s construct, you might repeal it and roll it into some sort of “Universal Credit,” but at potential serious consequences to maternal and child health outcomes, including higher rates of maternal and infant mortality.
Fourth, since the House Budget Committee Chairman has long cited welfare reform and the enactment of Temporary Assistance to Needy Families (TANF) as a model for the reform of other programs such as Medicaid and food stamps, the report takes an unfortunate one-sided look at TANF. For example, according to the report, “Using the Supplemental Poverty Measure, Christopher Wimer et al. show that child poverty plummeted beginning in 1994. In fact, for almost all demographic groups (except the elderly) poverty begins a sharp decline in the early to mid-90s.”
However, according to Wimer, that would be a significant overstatement of his findings. As Garver again reported:
Chris Wimer, the lead author on the paper and a researcher at Columbia, said Ryan’s conclusion ignores the major expansion of the earned income tax credit in 1993 and the roaring dotcom economy of the mid-to-late 1990s. “While our data can’t disentangle those three things, attributing the decline in poverty after 1993 to the welfare reform of 1996 seems to go beyond what the data show,” Wimer said.
In addition, the Budget Committee Report professes to be a 50-year review of the “War on Poverty.” While child poverty did initially drop after the enactment of the Temporary Assistance to Needy Families (TANF) program, the fact is that child poverty today stands at 21.8 percent – hardly a resounding success story. In fact, using it as a model for block granting and slashing the Medicaid and food stamps would be a disaster.
And last, the report does a hatchet job on a few select programs of importance to children, including both Medicaid and the Children’s Health Insurance Program (CHIP). In the case of Medicaid, the House Budget Report is clearly trying to justify last year’s budget proposal to block grant and slash $810 billion out of Medicaid. However, the fact is that, for millions of Americans, “Medicaid works.”
Fortunately, within a few hours of the House Budget Report’s release, Aaron E. Carroll and Austin Frakt, editors of The Incidental Economist, had published a blog titled “Zombie Medicaid Arguments” that systematically and thoroughly counters the attacks on Medicaid in the Ryan report. There are over 25 hyperlinks in the Carroll/Frakt blog to reams of evidence about how Medicaid works to improve the circumstances of low-income children, the disabled and senior citizens.
The House Budget Report also cites a number of studies from the 1990s — some nearly 25-years-old — that simply cannot be taken seriously.
Furthermore, the report highlights the fact that Medicaid and CHIP serve a disproportionate number of children with disabilities, as if that is some sort of negative. Since Medicaid is specifically set up to serve low-income people with disabilities, foster care kids that have suffered enormous trauma in their lives, senior citizens in need of nursing home care, etc., this is obvious and an enormous positive about Medicaid — not a negative. Attacking Medicaid for this fact is akin to attacking a cancer center for having a disproportionate number of patients who have greater than average health care needs. Both Medicaid and cancer centers purposely serve people with special and serious health care needs and that is a great and important thing.
Although Medicaid certainly faces challenges such as low provider payment rates, slashing the program by $810 billion, as proposed by Chairman Ryan, would certainly not improve the program and would only serve to harm these most vulnerable citizens among us who, by definition, desperately need their Medicaid coverage.
Does anyone really dispute that having health insurance is better than not having health insurance? Anyone who does should put their money where their mouth is. Medicaid isn’t welfare. You don’t get cash. It pays for health care if you need it. And, like all health insurance, it makes people healthier and saves lives. Lots of people say so. Studies confirm this.
With respect to CHIP, the House Budget Report is simply ludicrous. Under a heading entitled “CHIP” on page 112, there is actually not a single bulleted reference below the reference to “CHIP” that has anything related to CHIP itself. All references are actually related to Medicaid, including two bullets citing studies recommending higher Medicaid provider payments (again, highlighting why the proposed Medicaid reform by the House Budget Committee to cut the program by $810 billion over 10 years makes no sense), a positive bullet emphasizing how Medicaid enhances access to care and reduces child deaths, and a final bullet that does not speak to CHIP either. The evidence in the report against CHIP is: zero, zilch and nada.
The fact is that CHIP does not even serve families living in poverty — Medicaid does. CHIP serves families above the poverty level and up to a median 235 percent of poverty in states across the country. What makes it unique is CHIP is child-focused — meaning that it includes pediatric-specific networks, benefits, and quality measures. As a result, CHIP has obtained enormous support with the parents of the children it serves, our nation’s pediatricians, our nation’s children’s hospitals, and the overwhelming majority of Americans, who supported its reauthorization in 2009 by a more than 8-to-1 margin (82-10 percent). And more recently, voters strongly oppose any cuts to CHIP to order to address the federal budget deficit (67-21 percent). The fact is that the American people simply do not believe that the health of children should suffer in order to address a budget deficit that children did not create. They see it as a false choice.
As for real research on CHIP, the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) summarized some of their research findings:
During the period from 1997 to 2012, the share of children with incomes at or below 200 percent of poverty who are uninsured was cut nearly by half, from 25 percent in 1997 to 13 percent in 2012.
The gains in coverage have been experienced among low-income children in all racial and ethnic groups, but are especially striking for low-income Latino children: the share of low-income Latino children who are uninsured fell from 34 percent in 1997 to 17 percent in 2012.
The availability of CHIP has improved children’s access to health care services: four-fifths of children received a preventive visit and 86 percent had a doctor or other health professional visit in 2012.
Most parents of CHIP enrollees (84 percent) were never or not very often stressed about meeting their child’s health care needs, and 92 percent of parents of CHIP enrollees never or rarely had problems paying their child’s medical bills for care. In contrast, almost half of the uninsured are not confident that they can pay for the health care services they need.
The ASPE report concluded:
Looking at the big picture, CHIPRA’s successes include:
Increased health insurance coverage;
Improved access to health care; and
Reduced financial burdens and stress for parents.
The important point here is that not all means-tested programs are strapped up as combatants in the “War on Poverty.” So no, CHIP does not lift children out of poverty, but that is because it is: (1) a child health program; and, (2) it does not cover a single child living in poverty (Medicaid does). Therefore, it should be judged based on what it was actually set up to do. And, on that measure, CHIP effectively improves the lives, health and well-being of 8 million children in our country, and thereby, is quite deserving of continued support.
If Chairman Ryan is serious about addressing poverty and we appreciate his raising the specific concern of child poverty, there are some very important lessons from the “War on Poverty.” Rather than suggesting that the nation eliminate the Maternal and Child Health Services Block Grant or block grant and slash Medicaid, CHIP and food stamps, which would only make the health and nutrition of our nation’s children much worse, Mark Shriver of Save the Children is absolutely right that we need a much different approach.
As one of many examples, both First Focus (see here and here) and the American Academy of Pediatrics have called for the adoption of a Child Poverty Target in the United States, just as has been successfully adopted by Great Britain. Such an approach would set in place a national commitment to reduce child poverty in half over 10 years and it is supported by American voters by an overwhelming 82-13 percent margin.
Therefore, those pesky facts show us that the “War on Poverty” has seen some incredible successes for seniors but has been a mixed bag for children. Fortunately, the American people understand that, just as we have done for seniors, improving the lives of our nation’s children is not the right thing to do, but it’s one of the best investments we can make as a nation. They recognize a pathway to progress when they see it. And, with a full set of facts and a dose of political will, maybe our nation’s political leaders will see it, too.