SOURCE: iStockphoto

A father and son work on repairing their bike.

Families have been changing and evolving over the past several decades. Increases in divorce rates and unwed pregnancies continue to drive the rise in single-parent households; the trend is most prevalent among families living in poverty and African American families. Unfortunately, policies have largely failed to keep up with these trends, and as a result, families suffer.

As we celebrate another Father’s Day, we should consider revising one federal program that could benefit fathers, as well as children and families: Child Support Enforcement, or CSE. As its name implies, the program is already working to help families with their child-support arrangements and issues. But it could play a greater role in visitation, a key to fostering and maintaining the connection between fathers and their children.

The need

Currently, 35 percent of families are headed by single parents, usually mothers, leaving many children to grow up in homes without their fathers. Those numbers are a lot higher for families living in poverty (69 percent) and African American families (63 percent). Various studies suggest that connections to active and nurturing fathers are associated with positive factors for children such as better verbal skills, academic achievement, and social connections with peers. Despite these findings, current systems don’t make it easy for low-income fathers to establish formal arrangements for spending time with their children. The combination of growing changes in family structure and the inherent value to a child of having a good connection with their father suggests a significant pool of families may be able to benefit from visitation assistance.

While there is limited information available about the demand for visitation assistance, we do know that the nation’s free legal-services providers turn away more than 390,000 requests for family-law help a year due to lack of resources. And localized efforts such as Texas’s Access and Visitation hotline are overwhelmed with requests for assistance.

Families currently have only one place to turn to get help with their visitation needs: state and locally funded family-court systems. But there is potentially a second place to turn: the Child Support Enforcement system.

Visitation help through the courts

The primary avenue for resolving visitation issues is through the state courts. Unfortunately, that system has its challenges.

In 2011 the American Bar Association passed a resolution declaring that state-justice systems were underfunded and in crisis. Court services were already being cut before the Great Recession; since then, additional cuts of 10 percent to 15 percent have meant serious consequences, including failure to fill judicial vacancies, staff layoffs, and case backlogs.

This funding crisis is affecting the courts’ ability to serve families, but there is another major issue at play: the rising costs of attorneys’ fees. This is a primary reason why more low-income and middle-class families are representing themselves in court, particularly in family matters. Pro se litigants, or people who represent themselves, must learn to navigate often-complex court processes without a lawyer. This can be frustrating for the individual, while also taking longer to resolve. And large numbers of these cases can clog the system, causing everyone to wait longer to have their issues heard.

The potential for visitation help from CSE

These court-system challenges suggest an unrecognized value of the Child Support Enforcement system: its potential to provide an accessible means of helping families with visitation agreements using a mixture of federal and state funding. But the key word is “potential,” since visitation or parenting-time agreements are currently not integrated into CSE services.

The Office of Child Support Enforcement does administer a small Access and Visitation Grant that has existed since 1997. But its nationwide budget has never increased above $10 million per year, despite bipartisan support to grow the effort from both former President George W. Bush and President Barack Obama. Recently, the Obama administration went a step further, recommending the incorporation of visitation arrangements in all new child-support orders.

Unless Congress acts on the administration’s recommendation, CSE families must continue to struggle with two separate processes: one for child support and the other for visitation. This stands in stark contrast to divorcing families who are not involved in CSE—they pursue just one court process that simultaneously resolves both child support and visitation questions. Ultimately, a bifurcated process wastes resources of the courts, as well as those of mothers and fathers.

Moving forward

CSE should integrate visitation assistance into its service model; however, it should be sure to do so in ways that most benefit children and families. Making mediation and other forms of alternative dispute resolution universally available to families is a great start.

Considered a best practice in family courts across the nation, mediation and similar forms of alternative dispute resolution involve both parents in the negotiating process, along with the help of a third party.  Parents are empowered to make their own decisions, creating individualized decisions that best suit the needs of their families.

When compared to adversarial court processes, various studies have associated family-law mediation with a whole host of positive outcomes that include higher rates of parental satisfaction, children spending more time with their fathers, and improved co-parenting relationships. In addition to this general research, limited federal investments in mediation through the federal Access and Visitation Program have demonstrated similar results for the populations already being served by CSE:

• Parenting-time increases. Forty-one percent to 42 percent of parents who reached an agreement reported that fathers were spending more time with their children post-mediation.
• Some children’s behavior improves. Thirty percent to 39 percent of mothers reported that their children’s behavior improved after mediation, although a smaller number reported the opposite—that their child’s behavior worsened.
• Co-parenting relationships showed signs of improvement. Fathers who reported that their relationship with the other parent was “hostile and angry” dropped from 39 percent to 17 percent post-mediation. Similarly, mothers reported a drop from 36 percent to 14 percent.
• Parents were more likely to pay support. Forty-four percent to 64 percent of fathers increased their child-support payments after participating in mediation to develop visitation arrangements. Even greater gains were made by fathers who were never married to the mothers, and by fathers who were not making full payments prior to mediation.

A growing number of families—not just fathers—stand to benefit from visitation or parenting-time assistance. The courts are one available resource but they are experiencing some significant crises. The nation should view Child Support Enforcement as another resource for meeting the need for visitation help. In doing so, however, they must change the CSE model to universally incorporate proven strategies that promote the well-being of families: mediation and other forms of alternative dispute resolution. Cultural shifts such as this are difficult, but with appropriate guidance from our lawmakers and the administration, it is possible.

Joy Moses is a Senior Policy Analyst with the Poverty and Prosperity program at the Center for American Progress.

SOURCE: iStockphoto

A father plays with his son.

As we celebrate Father’s Day on Sunday, it is worthwhile to reflect on the importance of fathers who too often go unrecognized in family and social policy: low-income fathers of color, who are frequently dogged by negative stereotypes.

More than two-thirds of Latino fathers reside in the same household with their children, cohabitating at rates on par with the national average of 68.6 percent. Although black men are the demographic group least likely to live with their children, noncustodial black fathers participate in their children’s upbringing at rates nearly double that of noncustodial white and Latino fathers, and their children are more likely to report positive contact and relationships with their fathers.

Improvements in a father’s economic security better prepare him to provide financial support to his children, who need to be lifted and kept out of poverty. Leaders from across the country, including President Barack Obama, are supporting efforts such as the Center for Urban Families, or CUF, in Baltimore, Maryland, which offers low-income fathers parenting and workforce-development services. These valuable community assets are providing ladders of opportunity, generating significant progress in helping low-income fathers improve their economic standing, and shifting the narrative on fathers of color.

More policy attention, however, must be paid to their needs and those of all low-income fathers. In terms of employment, health, housing stability, incarceration, and mental health, low-income fathers fall far behind other fathers, as the data presented below demonstrate.

Employment

• 13.7 percent: the nationwide unemployment rate for black men, compared to 8.6 percent for Latino men and 6.6 percent for white men in April 2013
• 4 million: the number of private-sector jobs lost between 2006 and 2012 for workers with only a high school diploma, an educational-attainment level in which Latino and black men disproportionately fall

Despite steady declines in the overall unemployment rate, disproportionate joblessness persists in low-income communities and communities of color. To avoid the long-term consequences of disparate economic distress, investments in jobs, as well as education and training, are critical supports for communities currently being left behind in the recovery. Assistance and services that improve work opportunities for disconnected men also support the well-being of children, women, and families.

President Obama’s proposed Pathways Back to Work Fund includes $8 billion for subsidized employment, as well as $2 billion to provide job training for low-income people and the long-term unemployed. CAP’s recently released report, titled “It’s Time to Hit the Reset Button on the Fiscal Debate,” includes this fund as a critical approach to faster long-term growth.

Health

• 53 percent: the percentage of men among the 15.1 million adults lacking health insurance who could gain coverage under Medicaid if all states expand eligibility
• 7 million: the approximate number of people without health insurance who qualify for the Supplemental Nutrition Assistance Program, or SNAP, but are not enrolled
• 40 percent: the rate of African American men who die prematurely, compared to 37 percent of Latino men and 21 percent of white men

The Patient Protection and Affordable Care Act, or ACA, will significantly improve access to health care coverage for millions of low-income men. Even when black and Latino men have coverage, however, they are less likely to receive consistent quality care and preventive services.

Sick fathers or fathers who die prematurely are unable to provide for their families. Low-income men of color could benefit from greater community-based outreach to boost enrollment and eliminate barriers to treatment. The ACA’s Prevention and Public Health Fund, if fully implemented, will reduce health care costs through improved detection and management of chronic conditions and the promotion of wellness in underserved communities.

Housing stability

• 8.48 million: the number of low-income renters spending 50 percent or more of their household income on housing in 2011
• 104 hours: the number of weekly hours a minimum-wage worker must earn to rent a two-bedroom apartment in 2013
• $18.79: The minimum hourly wage one must earn in order to afford the average cost of rent in the United States
• 60 percent: the proportion of the largely male sheltered-homeless population that is a racial minority, a population that is composed mostly of African Americans (38.1 percent) and Latinos (16.4 percent)

Because men of color face high levels of homelessness, unemployment, underemployment, and wage gaps, housing affordability is critically important. Housing instability negatively impacts health outcomes, recidivism, employment opportunities, and family stability, as well as the ability of fathers to be present in their children’s lives. “Making the Mortgage Market Work for America’s Families,” a recent joint report by CAP and the National Council of La Raza, outlines opportunities to improve housing affordability, including investments in the construction and preservation of affordable rental units and the launch of a Market Access Fund to provide targeted lending to communities of color and low-income people.

 Incarceration

• One in nine: the number of black children who have an incarcerated parent, compared to 1 in 28 Latino children, and 1 in 57 white children
• 54 percent: the number of incarcerated fathers who were primary providers for their families
• 21 percent: how much slower wages grow for formerly incarcerated black men, compared to their white counterparts

Given persistent incarceration disparities and the deep effect it has on communities of color, more should be done to support alternatives to incarceration and to improve community re-entry services. The removal of fathers and the wage gap they encounter upon return affects entire families. Due to workplace discrimination, returning fathers often face limits to their ability to support their children. Often in order to make ends meet, fathers will repeat the very crimes that led to their initial incarceration.

Social impact bonds provide a source of funding to support programs that lower recidivism through family planning, drug treatment, employment, and mentoring services. President Obama’s fiscal year 2014 budget includes a request for $500 million to support this innovative funding approach.

Mental health

• 4.1 times: the rate at which Latino men face post-traumatic stress disorder when compared to white men, while black men face rates 2.5 times greater than white men
• 1 in 10: the number of men of color who will face major depression, and the number of depressed men who will receive adequate care for their condition

Most Americans with a mental illness remain untreated or receive poor treatment, and this is especially true for men of color, who are less likely to be connected to mental-health services. One significant but particularly overlooked cause of mental illness in men is sexual violence, including rape. Male victims suffer from similar mental-health disorders as women who are sexual assault victims, but men are far less likely to disclose the assault. Consequently, it is highly likely that they must cope with the psychological impact on their own.

Untreated mental illness in fathers means the whole family is likely to suffer, as fathers are severely incapacitated in their ability to parent when dealing with mental trauma. The president’s requested $235 million provides critical resources to improve mental-health detection and train and expand the mental-health workforce.

Conclusion

Fathers of color need increased access to vital wraparound services. Programs such as the Center for Urban Families in Baltimore are critical to addressing the challenges mentioned above and should be supported on a much greater scale. Additionally, to ensure progress for our nation’s fathers of color, policymakers and program directors must eliminate systemic barriers that actively prevent fathers from supporting their families.

A number of proposed policies offer significant opportunities to improve the circumstances of fathers of color and low-income fathers. This Father’s Day, our leaders should seize the opportunity to move beyond the stereotypes and protect and strengthen economically vulnerable fathers, their children, and their families.

Zach Murray is a Bill Emerson National Hunger Fellow with the Poverty and Prosperity program and Progress 2050 project at the Center for American Progress.

SOURCE: AP/Jae C. Hong

Marchers walk along during a rally for immigration reform in downtown Los Angeles, Wednesday, May 1, 2013.

This week the Senate began debate on an immigration-reform plan that includes a road map to citizenship for the 11 million undocumented immigrants striving for a formal place in American society. The Border Security, Economic Opportunity, and Immigration Modernization Reform Act of 2013, or S. 744, proposed by a bipartisan coalition of senators, outlines an arduous 13-year pathway to citizenship through which undocumented immigrants may gain legal status and citizenship. Opponents of reform have already proposed amendments that would undermine the basic economic security of people on the road to citizenship.

In particular, senators have proposed limiting the eligibility of immigrants in Registered Provisional Immigrant, or RPI, status—a temporary legal status that is the first step on the path—to receive the earned income tax credit and the child tax credit. In addition, senators have proposed amendments that would bar even legalized immigrants who adjust to legal permanent resident status from receiving supplemental nutrition assistance (formerly known as food stamps) and have in the past attempted to bar anyone from receiving supplemental nutrition assistance unless every member of their family is a citizen or permanent resident (green-card holder).

But traveling the road to citizenship will already be a financial challenge for most families. Under S. 744 an undocumented immigrant will have to pay a total of $2,000 in fines—$4,000 for a couple—just to obtain a green card, in addition to hefty application fees. These fines and fees also come on top of a stringent requirement that immigrants, in order to adjust to permanent resident status, must either prove that they have worked throughout their entire time in RPI status or have resources totaling at least 125 percent of the federal poverty line. Denying these aspiring Americans access to critical tax credits and vital nutrition assistance would severely undermine their financial security and would make the path to citizenship impossible for some.

What’s more, legal status for the 11 million undocumented immigrants will lead to economic gains for the country in terms of growth, earnings, tax revenues, and jobs, resulting in a $832 billion cumulative increase in U.S. gross domestic product in 10 years. But if fewer undocumented immigrants acquire citizenship, the potential economic gains for our nation will be far less than they otherwise could be. Curbing access to supports such as supplemental nutrition assistance and the earned income and child tax credits therefore not only undermines economic security for millions of undocumented immigrants, but also denies potential economic gains to millions of Americans.

We cannot allow newly legalized immigrants to go hungry

The Supplemental Nutrition Assistance Program, or SNAP, provides nutrition assistance to 47 million low-income people in a typical month, helping fight hunger and keep millions of families and children out of poverty. But SNAP is also a net gain for American communities and businesses: Every $5 in federal SNAP spending generates $9 in economic activity, while every $1 billion in SNAP benefits creates 3,000 new farm jobs alone. These benefits arise as people spend their money at supermarkets, local food and retail stores, and farmers’ markets, creating jobs for those who grow, process, ship, and sell food. In turn, these jobs lead to increased taxes paid by workers, and increased spending by workers, which further stimulates the economy.

No family, whether composed of current citizens or those on the road to citizenship, should be left to go hungry, for both moral and economic reasons. Hunger has detrimental effects on children’s long-term development, from performance in school to future work preparedness and performance, which threatens the economic success and output overall of the nation.

Currently, most immigrants are eligible for SNAP benefits after they have been a lawful permanent resident for at least five years, though all U.S. citizen children, even of undocumented parents, are eligible. One amendment from Sen. Rand Paul (R-KY) would bar even legalized immigrants who adjust to lawful permanent resident status from SNAP benefits. Moreover, previously proposed amendments, such as those proposed on the 2012 Farm Bill, attempted to limit the ability for anyone—even a U.S. citizen child—to receive supplemental nutrition assistance unless everyone in their family is a citizen or a legal permanent resident. Making such a change would mean that even native-born citizen children of Registered Provisional Immigrants would be ineligible to receive SNAP benefits.

Allowing access to supplemental nutrition assistance and other forms of food assistance is necessary to promote family economic security and the economic health of the nation. We should not be playing political football with hungry children.

Tax credits are vital for working families and children

The earned income tax credit and the child tax credit keep families from slipping into poverty by helping working families make ends meet, as well as encouraging and supporting work. In 2011 the earned income tax credit and the child tax credit lifted nearly 9.5 million people, including nearly 5 million children out of poverty. Most taxpayers who claim the earned income tax credit do so for no longer than two consecutive years and end up paying hundreds of billions of dollars more in net federal income taxes than they receive from the credit over time.

Both credits boost the economy, as low-income families use their refund checks to purchase groceries and school supplies, child care, housing, and more, supporting local businesses. In fact, for every earned income tax credit dollar received, $1.50 to $2 is generated in the local economy. Both credits also enable and encourage families to save and build their assets in order to lay the foundation for future economic security.

It is extremely troubling that legislators seek to deny these credits to newly legalized working immigrants throughout the at least 10 years they must spend in RPI status, since these credits increase access to basic needs and improve the financial well-being of low- and middle-income families and children, the majority of which are native-born U.S. citizens. The benefits of the earned income tax credit also extend to future generations, as children of families who claim the credit are more likely to attend college and earn more as adults, and are less likely to succumb to disabilities or illnesses—consequences disproportionately associated with child poverty.

Currently, all legal workers in the United States are eligible to receive the earned income tax credit when they meet the income-eligibility requirements—and note that the word “earned” in the title means that this credit is only given to people earning income and filing their taxes. Failing to extend the credit to immigrants on the long road to citizenship would create two tiers of legal workers in the tax code, and more importantly, would create an incentive for people to continue working in the underground economy, knowing that without the credits, working in the legal economy could end up costing them more in taxes.

Denying legal workers this credit would in effect make them second-class residents who will have to pay higher taxes then their native-born counterparts. Failing to extend these credits to legalized workers—considering how difficult the path to citizenship already is, as well as the high penalties, fees, and work requirements the bill already contains—may constitute too high a burden for these immigrants, ultimately knocking them off of the path to citizenship and back into unauthorized status. Denying tax credits in an attempt to save money may therefore in practice do nothing more than undermine the broader goals of immigration reform. Instead we should work to ensure that the greatest number of people can become full and equal members of our society.

Perhaps most importantly, though, restricting eligibility for the child tax credit would jeopardize families’ ability to provide their children with basic necessities. As it is now, many families living in poverty are either ineligible for the credit or only eligible for a partial credit, and those that are eligible for the full credit only get an annual maximum credit of $1,000 per child, which covers a mere fraction of the expenses associated with having a family. The brunt of the consequences of denying eligibility will fall on the children—the majority of whom are U.S. citizens—who will not reap the long-term benefits of claiming the credits, including better health, better jobs, and higher incomes. Both credits, contingent on work, would position newly recognized immigrant families on more stable economic footing.

Conclusion

Immigration reform and a road map to citizenship must include access to effective services and tax credits that promote family economic security. Denying this access would betray the nation’s commitment to its people and would be detrimental to the well-being of future generations. By removing supports such as the Supplemental Nutrition Assistance Program, the earned income tax credit, and the child tax credit, the nation would be placing additional and unnecessary obstacles on the long road to citizenship and hurting our nation’s future economy as a result.

We must seize the economic and moral opportunities that come with reform. It is crucial that our focus remains on the big picture and that we prioritize investments in potential, rather than jeopardizing economic security by removing the first few rungs on the ladder to economic prosperity and the American Dream.

Sarah Baron is Special Assistant for Poverty and Half in Ten, and Philip E. Wolgin is Senior Policy Analyst for Immigration at the Center for American Progress.

SOURCE: AP/Patrick Semansky

A boy shoots a basketball into a makeshift basket made from a milk crate and attached to a vacant row house in Baltimore, Maryland, April 8, 2013.

The Brookings Institution recently released a new book, Confronting Suburban Poverty, chronicling the increase in poverty beyond the urban core, which has gone largely unnoticed by policymakers. The book reveals that poverty has been growing faster in the suburbs than in cities or rural areas: Nearly 16.4 million poor people now reside in suburban communities, compared to 13.4 million poor people in big cities and 7.3 million poor people in rural areas.

This finding is significant, as poor suburban residents face a unique set of challenges that our community-development systems are not designed to address, including limited public-transit options, a largely dispersed population, and fewer nonprofit service providers, to name a few. The book is already serving as an important message in the fight against poverty, calling for a renewed look at our community-development system, and it reveals the need for new strategies to address a problem that is not contained by city limits.

While the authors call for a balanced approach to addressing suburban and urban poverty, many of the headlines responding to the trend discuss the “suburbanization” of poverty or declare that poverty is “moving from the city to the suburbs,” as though poverty is no longer an urban problem. In fact, the opposite is true: A larger share of the population in cities—20.9 percent—is poor compared to the population in suburbs—11.4 percent. While suburban poverty presents a unique set of challenges, we have yet to win the war on urban poverty, and several challenges persist for poor city residents, including concentrated poverty, crime, affordable-housing shortages, a lack of investment in good public-transit systems, job loss, and segregation.

Concentrated poverty

While it is easier to target densely populated, poor urban areas for solutions, concentrated poverty is not an advantage for the poor living in cities. Studies consistently show that concentrated poverty exacerbates the challenges of being poor, as residents face higher crime rates, underperforming schools, poor health outcomes, and substandard housing options. The effects are particularly hard on children, who face increased levels of stress that can lead to emotional and behavioral problems. According to a study by the Annie E. Casey Foundation, two-thirds of children living in concentrated poverty reside in cities.

Crime

As stated above, crime is a problem that particularly affects people living in concentrated poverty, which is more frequent in urban settings than in rural or suburban areas. While the crime rate in American cities has on average been declining, it is markedly higher than in suburban areas, which continue to be ranked among the safest places to live.

Affordable-housing shortages

One contributing factor to the increase in suburban poverty is the lack of quality affordable-housing options in urban areas. Since the housing crisis, families are increasingly opting to rent instead of purchase their homes, driving up the demand in an already-strained rental market. Further, across the country, the number of extremely low-income renters exceeds the number of affordable units available.

Public-transportation investment

The affordable-housing crisis is complicated by the fact that housing tends to be more expensive in areas with good public transportation. As a result, low-income people in cities tend to live in neighborhoods in which public transportation is underinvested and unreliable. Historically, many transportation planners and policymakers have dedicated resources toward constructing highways and commuter-rail lines serving suburban populations over low-income urban communities. This contributes to a higher so-called time penalty—the amount of time waiting for public transit—that low-income people face each year.

Job loss

Transportation has become even more critical because every major metropolitan area has lost jobs to the suburbs over the past decade. According to another Brookings analysis, “the suburbanization of jobs obstructs transit’s ability to connect workers to opportunity and jobs to local labor pools.” This reveals how the economic futures of both the suburbs and urban areas are becoming increasingly linked.

Segregation

While the 2010 Census showed that many black families moved to the suburbs over the past decade, this trend was mostly among affluent blacks, not those living in poverty. In fact, poor whites and Latinos are more suburbanized than poor blacks, who are still mainly concentrated in urban areas and may face barriers to pursuing suburban job opportunities. As Margery Turner of the Urban Institute stated, “Today’s poverty map reflects the legacy of discrimination, legally sanctioned segregation, and racial inequality.” She explains that as we develop place-based interventions to fight poverty, we must remember that urban poverty is still a problem and recognize this enduring legacy so we ensure that our policies acknowledge the links between race, poverty, and geography.

Conclusion

The authors of the Brookings analysis have it right: Poverty is a problem that is not limited by geography, but rather is impacted by it. As we reassess how to approach place-based responses to poverty, it is important to acknowledge not only that poverty is, in fact, a suburban problem, but also that the unique challenges of urban poverty persist. While the community-development system that was designed in the 1960s does not address the realities of suburban poverty, it is not currently working for the urban poor either. Changing demographics, advances in technology, and a globalized economy require us to rethink how we address poverty in our communities.

This crisis won’t be solved by one program, but instead requires a new way of working that breaks down silos and acknowledges the interconnected nature of issues. Efforts such as the Sustainable Communities Regional Planning Grant Program, which coordinated resources from the U.S. Department of Housing and Urban Development, Department of Transportation, and the Environmental Protection Agency, do just that. By supporting multijurisdictional planning efforts to integrate housing, land use, economic and workforce development, transportation, and infrastructure investments, communities were challenged to work together by leveraging resources, aligning policy goals, and solving problems together.

As we continue to address poverty, we can’t turn our back on cities while searching for solutions to the next frontier of poverty. Cities are still the engines of the U.S. economy and have the potential to create opportunities for people throughout their regions. Policymakers must look beyond the headlines and take this analysis as a renewed call to address poverty in comprehensive ways across all jurisdictions.

Tracey Ross is a Senior Policy Analyst for the Poverty to Prosperity Program at the Center for American Progress.

Read the full report.

In that spirit, I held a Twitter “town hall” on April 8, 2013, to answer questions about the High-Level Panel process and priorities for the post-2015 world. This Storify summary presents the Twitter town hall in its entirety.

John Podesta is Chair of the Center for American Progress.

SOURCE: AP/Jacquelyn Martin

Allen Robinson and his wife Nancy King Robinson pose for a portrait in their store, Books and Other Found Things, in Leesburg, Virginia. King Robinson, who has multiple sclerosis, receives Social Security disability.

Endnotes and citations are available in the PDF of this issue brief.

Nearly one out of every six working-age Americans—29.5 million people—has a disability, making them much more likely to experience economic hardship than people without disabilities. Many people with disabilities are able to work, although they face greater challenges finding work than people without disabilities. But many individuals with severe and long-lasting disabilities have no or only limited capacity to work and are particularly vulnerable to economic hardship.

For roughly 12 million people with disabilities, Social Security Disability Insurance and Supplemental Security Income, both core components of our nation’s Social Security system, provide critical lifelines. The modest but vital assistance that Disability Insurance and Supplemental Security provide makes it possible for individuals with severe disabilities and health conditions to live independently, keep a roof over their heads and food on the table, and pay for needed, often life-sustaining medications and other basic expenses.

This issue brief answers some of the common questions about Disability Insurance and Supplemental Security. Our focus in this brief is on nonelderly adults with severe disabilities. It is important to note, however, that Supplemental Security also provides vital support to some 1.2 million children with severe disabilities, as well as more than 2 million low-income seniors.

How many people currently receive Social Security disability benefits, and what is the value of the benefits they receive?

About 8.8 million workers with disabilities currently receive Disability Insurance. The amount of Disability Insurance benefits that a disabled worker receives is based on his or her earnings before becoming disabled. As Table 1 shows, Disability Insurance benefits typically replace less than half of a disabled worker’s previous earnings.

As of March 2013, the average monthly benefit for a disabled worker was about $1,129, with male workers receiving $1,255 per month and female workers receiving $993 per month on average. About 1.9 million children of disabled workers and 160,000 spouses of disabled workers also receive supplemental benefits from Social Security—roughly $300 a month on average.

For most beneficiaries of Disability Insurance and Supplemental Security, disability benefits make up most or all of their income. For the vast majority of Disability Insurance beneficiaries—about 71 percent—half or more of their income comes from Disability Insurance. And for nearly half of beneficiaries, 90 percent or more of their income comes from Disability Insurance. Given the modest extent to which benefits replace lost earnings and the limited sources of other income upon which they can depend, people who receive Disability Insurance are rarely able to maintain the same standard of living they had before becoming disabled. Disability Insurance provides a floor, however, that moderates the decline in their living standards.

About 4.9 million nonelderly adults currently receive Supplemental Security. Nearly one-third—31.3 percent in 2011—also receive very modest Disability Insurance benefits. On average, nonelderly adults who receive Supplemental Security currently receive a Supplemental Security benefit of $525 per month. Most of them have no other source of income.

People who receive disability benefits are generally eligible for public health insurance. People who receive Disability Insurance are eligible for Medicare but only after a two-year waiting period. And in most states, people who receive Supplemental Security are automatically eligible for Medicaid. Some states, however, use more restrictive eligibility criteria for Medicaid coverage than those used by Supplemental Security.

How are Disability Insurance and Supplemental Security benefits funded?

Disability Insurance is funded by payroll tax contributions from workers and their employers. Workers currently pay a tax of 0.9 percent of their wages up to $113,700, and their employers pay an equal amount. These tax contributions go into the Disability Insurance trust fund. Funding for Supplemental Security comes from the federal income tax and other federal revenues.

The Social Security Administration administers both of these programs. State agencies, usually called disability determination services, make the initial determination of whether applicants meet the disability standard. These state agencies are federally funded and follow federal guidelines.

What is the disability standard for Disability Insurance and Supplemental Security?

Disability Insurance and Supplemental Security are reserved for workers with the most severe disabilities and conditions, and both use the same strict disability standard: inability to engage in “substantial gainful activity”—defined as being able to earn $1,040 a month in 2013—due to one or more severe physical or mental impairments that are expected to last at least a year or could result in death. A worker’s impairment or combination of impairments must be so severe that the applicant is not only unable to do his or her previous work but also unable—considering his or her age, education, and work experience—to engage in any other kind of substantial gainful work that exists in significant numbers in the national economy.

Medical evidence is the cornerstone for the determination of disability in both programs. To qualify, there must be medical evidence from a doctor, specialist, or certain other licensed or certified medical sources that documents a severe impairment. Evidence from other health care providers—such as nurse practitioners or clinical social workers—is not sufficient to document a severe medical impairment. And statements from the applicants themselves, their families, co-workers, friends, or neighbors are not treated as medical evidence.

Most applications for Disability Insurance are denied under this strict standard, and many workers with significant disabilities do not qualify. Between 2006 and 2008 only about 40 percent of applications were ultimately approved. The level of severity required by the disability standard is apparent when one considers how poorly workers who have been denied Disability Insurance subsequently fare in the labor market. A recent study found that among people whose Disability Insurance applications were denied by the Social Security Administration, the vast majority—70 percent to 80 percent—did not go on to work in jobs with annual earnings above the substantial gainful activity level.

Further underscoring the strictness of the disability standard are the considerably elevated mortality rates for disabled workers found eligible for benefits. One in five men and nearly one in six women die within five years of being approved for benefits. Disability Insurance beneficiaries have death rates at least three times higher than other people their age.

What other requirements are beneficiaries required to meet?

In order to receive Disability Insurance, a worker must have worked during at least one-fourth of his or her adult lifetime and during at least 5 of the 10 years before disability onset. There is also a five-month waiting period before a worker can qualify for benefits.

Supplemental Security provides assistance to people with severe disabilities who have very low incomes and assets and who either lack sufficient work history to be covered for Disability Insurance or receive only a very small Disability Insurance benefit. It is important to note that many Supplemental Security beneficiaries, although lacking the sustained work history necessary to be insured under Disability Insurance, have worked and paid into the Disability Insurance system. And others, particularly women, are not eligible for Disability Insurance because they took time out of the paid labor force to care for children or other family members.

Workers must apply for and exhaust all other available benefits before qualifying for Disability Insurance or Supplemental Security. Accordingly, Social Security’s disability programs serve as a true last resort for people with severe disabilities and little to no ability to work.

How common is it for beneficiaries to return to work?

Both Disability Insurance and Supplemental Security provide incentives for beneficiaries to work. Disability Insurance beneficiaries are encouraged to work up to their full capacity and can earn an unlimited amount for up to 12 months without losing any benefits. Beneficiaries who work for more than 12 months and have earnings above the substantial gainful activity level cease to receive a monthly benefit. If at any point in the next five years their condition worsens and they are not able to continue working above the substantial gainful activity level, however, they are eligible for “expedited reinstatement” of their benefits. This means they do not need to repeat the entire, and typically lengthy, disability-determination process that they initially went through to qualify for benefits.

Supplemental Security beneficiaries who are able to work are encouraged to do so as well. Their benefits are reduced based on their earnings—after the first $85 of earnings each month, which is not counted against the benefit—but by only $1 for every $2 of earnings. Beneficiaries who are able to do some work will therefore always be better off with both earnings and a reduced benefit than just the benefit alone.

Supplemental Security beneficiaries who are able to sustain work above the program’s income limit can generally do so without risk of losing the health insurance that they receive through Medicaid. Moreover, if their condition worsens and they no longer have earnings above Supplemental Security’s income limit, they can start receiving benefits again without having to go through the initial disability-determination process.

These incentives are helpful for beneficiaries who are able to do some work or whose conditions improve. Due to the program’s strict disability standard, however, most beneficiaries have such severe impairments and health conditions that they are not able to work at all—and most beneficiaries do not have earnings.

The best available data on annual employment rates among working-age beneficiaries of Disability Insurance and Supplemental Security come from a recent report that linked Social Security data and earnings records in 2007, before the onset of the Great Recession. This report found that 16.9 percent of all disability beneficiaries worked at some point during the year. Disability Insurance beneficiaries were somewhat more likely to have worked than Supplemental Security beneficiaries: 19.5 percent of the former worked during the year, compared to 12.6 percent of the latter. The vast majority of beneficiaries who did work had extremely low earnings—just 2.9 percent earned more than $10,000 during the year.

How have the number and share of people receiving disability benefits changed over time, and what accounts for these changes?

There has been little change over the past two decades in the share of nonelderly adults receiving Supplemental Security due to a disability. In 2011, 2.4 percent of nonelderly adults received Supplemental Security for a disability, compared to 2.1 percent in 1996. This comparison does not, however, take into account demographic and economic changes, particularly the aging of the population and the increase in poverty, which both have increased the number of people who are potentially eligible for Supplemental Security.

Controlling just for income, participation in Supplemental Security by working-age adults who are potentially eligible because of low income has actually declined over the past decade and a half. In 2011 there were 17.6 nonelderly adults receiving Supplemental Security for every 100 nonelderly adults with incomes below 100 percent of the poverty line, compared to 18.5 nonelderly adults in 1996. In other words, the number of nonelderly adults receiving Supplemental Security grew at a slower rate than the number of nonelderly adults with very low incomes.

The share of nonelderly adults receiving Disability Insurance has increased over time. This is largely due to demographic factors, including:

• The aging of the Baby Boom generation: Disability risk increases considerably with age—an individual is twice as likely to be disabled at age 50 as he or she is at age 40, and twice as likely at age 60 as at age 50. As a result, a workforce with a greater share of workers in their 50s and early 60s will include many more workers with severe disabilities.
• The long-term increase in women’s employment, which means more women are meeting the work-history standard required to qualify for Disability Insurance: Since 1980 the share of working-age women who meet the work-history standard for Disability Insurance has increased considerably, from 50 percent to 68 percent.

Because these demographic factors are so important, the preferred way to assess trends in Disability Insurance is by looking at the “age-sex adjusted disability prevalence rate” used by actuaries at the Social Security Administration, since it controls for changes in the age and sex distribution of the insured population. The disability-prevalence rate, adjusted for age and sex, was 4.5 percent in 2011, compared to 3.5 percent in 1995.

A number of factors account for this one-percentage-point increase in the disability-prevalence rate after accounting for the changes in the age and gender distribution of the workforce, including the following:

• The increase in the Social Security retirement age means that more people who would have received Social Security as retirees under previous rules are now receiving Disability Insurance. About 5 percent of Disability Insurance beneficiaries are now ages 65 or 66.
• Among workers who are insured for Disability Insurance, the gender gap in rates of receipt of Disability Insurance has closed. Until the mid-1990s women who met Disability Insurance’s work-history test were substantially less likely than men to receive benefits on their own work records. Since then the gender gap has narrowed steadily and now no longer exists. A factor here may be the overall increase in female “breadwinners”—women who earn as much as or more than their husbands.

Finally, declining job opportunities for older workers, particularly older workers with severe physical limitations, have likely contributed to the increase. Currently, the number of U.S. jobs is roughly 10 million below the number we need to reach prerecession employment levels while also absorbing the people who enter the labor force each month. It is important, however, to not overstate the impact of the Great Recession or of economic recessions generally. While the economic downturn is believed to have led more unemployed workers to apply for Disability Insurance, the program’s stringent disability standard bars the door to benefits for most of them.

Why is there a shortfall in the Disability Insurance trust fund, and what can be done about it?

As described above, Disability Insurance is funded by a dedicated share of payroll tax contributions—0.9 percent of taxable wages paid by workers and the same amount by employers. Since the mid-1990s the Social Security Administration has consistently projected that the Disability Insurance trust fund would have sufficient reserves to cover all scheduled benefits until 2016, but that after that date, additional funds would be needed to avoid a shortfall in the necessary funds to continue paying full benefits. If no action is taken to address the shortfall, the Disability Insurance trust fund will only be able to pay 80 percent of scheduled benefit levels after 2016.

Congress has addressed similar shortfalls—in both the Disability Insurance trust fund and the Old Age and Survivors Insurance trust fund, which pays retirement benefits—nearly a dozen times in the past by temporarily reallocating the share of overall payroll tax revenues that is dedicated to each trust fund. In some cases, they have reallocated funds from the Disability Insurance trust fund to the Old Age and Survivors Insurance trust fund; in others, they have reallocated funds from the Old Age and Survivors Insurance trust fund to the Disability Insurance trust fund.

According to the Social Security Administration, the current shortfall could be closed through 2033 by temporarily reallocating a modest share of funds from the Old Age and Survivors Insurance trust fund to the Disability Insurance trust fund. Alternatively, the shortfall could be closed over the long term by a small—0.2 percent—increase in the payroll tax rate paid by both employers and employees.

Absent increased revenues or decreased costs, both the Disability Insurance and Old Age and Survivors Insurance trust funds face shortfalls in the mid- to late 2030s. Long-term—75-year—solvency for both programs could be achieved through an increase in the payroll tax rate from 6.2 percent for workers and employers (12.4 percent in total) to 7.6 percent each (15.2 percent in total). Another frequently discussed option is raising or eliminating the cap on earnings that are taxed for Social Security. This would mean that the 5 percent of workers who currently earn more than the cap—$133,700—would pay into Social Security through the entire year, as other workers do.

How does the United States compare with other countries?

According to a recent analysis by the Organisation for Economic Co-operation and Development, or OECD, the United States has the least generous disability-benefit system of all OECD member countries except Korea. The OECD describes the U.S. disability-benefit system, along with those of Korea, Japan, and Canada, as having “the most stringent eligibility criteria for a full disability benefit, including the most rigid reference to all jobs available in the labor market and the shortest sickness benefit payment duration.” In addition, the United States spends less as a share of its economy on incapacity-related benefits than other nations. In 2009 public expenditures on incapacity-related benefits comprised just 1.5 percent of U.S. gross domestic product, or GDP, compared to an average of 2.4 percent for all OECD nations.

Proponents of cutting disability benefits in the United States sometimes point to particular elements of disability program reforms in Europe—particularly in Germany, the Netherlands, and the United Kingdom—as potential models for changes to the Social Security disability programs. In general, however, such proposals fail to take into account that these nations have much more generous disability systems, less rigorous disability standards, higher levels of social expenditures—not just on incapacity benefits but on social assistance generally—and more regulated labor markets than the United States.

How can the Social Security disability programs be improved to increase economic security and work opportunities for beneficiaries?

Disability Insurance and Supplemental Security increase economic security for millions of disabled workers. For beneficiaries whose conditions improve, the programs also provide important incentives and supports for returning to work. Still, the programs could be further strengthened to increase disabled workers’ economic security and provide a more seamless transition for those who are able to return to work.

Modernize Supplemental Security

The value of Supplemental Security benefits has eroded considerably since the program’s inception in 1972, as the program’s income exclusions and asset limits have not kept pace with inflation and living standards. The current maximum benefit is equivalent to just three-quarters of the also-outdated federal poverty line for a single person. The general income exclusion ($20 per month) and earned income exclusion ($65 per month) have never been increased. To address this erosion, H.R. 1601, the Supplemental Security Restoration Act, sponsored by Rep. Raul Grijalva (D-AZ) and introduced in Congress in April 2013, would increase the monthly maximum benefit to $937, which is 100 percent of the current federal poverty line, and would increase the general income disregard to $110 per month and the earned income disregard to $357 a month. Increasing the income exclusions and indexing them to inflation going forward would restore the monthly benefit amount to its intended value and significantly increase beneficiaries’ economic security.

Additionally, Supplemental Security’s asset limits—$2,000 for a single person and $3,000 for a couple—have only been increased once, in 1989, and are not adjusted for inflation. These out-of-date restrictions make it impossible to maintain even a modest amount of savings, forcing beneficiaries to remain asset poor and unprotected in the event of an unexpected dental bill, leaky roof, or other unforeseen emergency expense. H.R. 1601 would address these out-of-date restrictions as well, increasing the asset limit to $10,000 for a single person and $15,000 for a couple.

Support a more seamless transition for beneficiaries able to return to work

Many disabled workers who receive disability benefits have made repeated attempts to work in spite of their impairments before finally turning to Disability Insurance or Supplemental Security as a last resort. Due to the strictness of the disability standard, many beneficiaries are terminally ill, and most are in poor and declining health. As discussed above, however, for beneficiaries whose conditions improve, the Social Security disability programs encourage beneficiaries to work up to their capacity and return to work if and when they are able, with protections in the event of failed work attempts.

But more should be done to ensure that beneficiaries are aware of the work incentives, supports, and protections that Disability Insurance and Supplemental Security provide. Additionally, consideration should be given to further enhancing these incentives, supports, and protections. Options include:

• Make work pay more for Supplemental Security beneficiaries: Permitting Supplemental Security beneficiaries who work to keep more of their earnings by reducing benefits by $1 for every $3 of earnings, rather than the current reduction of $1 for every $2 of earnings, would provide enhanced support and encouragement for beneficiaries who are able to do some work.
• Simplify work incentives: The disability programs’ work incentives are complicated, and it can be difficult for beneficiaries to understand how working will impact their benefits. This is especially the case for “concurrent” beneficiaries, who receive both a small amount of Disability Insurance and Supplemental Security. Demonstration projects such as the Work Incentive Simplification Pilot, or WISP, hold promise for testing major simplifications to the Disability Insurance work incentives, which would make them easier for beneficiaries to understand and less costly for the Social Security Administration to administer. The Social Security Administration’s authority to test the WISP, however, as well as other proposed demonstration projects related to Disability Insurance, expired in 2005 and has not yet been renewed by Congress. This authority, which already exists in Supplemental Security, should be renewed for Disability Insurance.
• Support benefits counseling for disability beneficiaries: The Work Incentives Planning and Assistance, or WIPA, and Protection and Advocacy for Beneficiaries of Social Security, or PABSS, programs provide crucial support for disability beneficiaries who are considering employment and should be reauthorized on a multiyear basis. These programs inform beneficiaries about how employment will affect their disability income and medical coverage and address many of the real fears that individuals have about going to work at the risk of losing health coverage. They offer a wide range of services to beneficiaries, including information and advice about obtaining vocational rehabilitation and employment services, information and referral services on work incentives, and advocacy or other legal services that a beneficiary needs in order to secure, maintain, or regain gainful employment.
• Provide the Social Security Administration with sufficient administrative funding to process disability beneficiaries’ earnings reports in a timely fashion: Currently, when beneficiaries report earnings, it can take the Social Security Administration several months—and sometimes even years—to adjust benefits based on the report. This late adjustment often results in beneficiaries being told that they have been overpaid benefits in past months, which they may then be required to repay. Many individuals are wary of attempting work for fear of incurring this kind of overpayment.

Shawn Fremstad is a consultant on social policy and a senior research associate at the Center for Economic and Policy Research in Washington, D.C. Rebecca Vallas is an attorney and policy advocate specializing in disability law and policy at Community Legal Services in Philadelphia.

SOURCE: AP/Pablo Martinez Monsivais

Carolyn Schapper poses in her home in Washington, D.C., July 3, 2008. Schapper was harassed in Iraq by a fellow Army National Guard soldier.

Lately it seems there is a never-ending stream of stories in the media about victims of terrible crimes, such as the three women and one of the women’s daughter who were recently rescued from a home in Cleveland, Ohio, after being kidnapped and held as prisoners for a decade. Some of them were also allegedly raped repeatedly. But for victims of such crime around the country, a series of recent budget cuts—including the reckless automatic across-the-board cuts known as sequestration—are a serious threat to their recovery and ability to seek justice.

When law enforcement responds to crimes, it relies on critical federally funded programs, as well as an invaluable network of service providers who can support victims in crisis. These service providers are a vital component of our justice system, giving victims the mental, physical, and emotional support they need to get back on their feet and the resources to seek their own justice.

Congress recently sprang into action to fix inconveniences for air travelers caused by automatic spending cuts, but victims of crime are left wondering where they fit into Congress’s priorities. The automatic cuts under sequestration are only the latest in a terrible trend of cuts to law-enforcement and victims services. Sequestration and related cuts in fiscal year 2013 alone will reduce or cut services to more than 955,000 victims. Automatic cuts are also threatening the U.S. Army’s ability to hire 829 military and civilian sexual-assault response coordinators as a result of an epidemic of sexual assault in the U.S. military.

Here are three things you need to know about how Congress is continuing to shortchange law enforcement and victims of crime through reckless deficit reduction and automatic cuts.

Cutting services for victims of domestic violence, child sexual abuse, adult sexual assault, and other crimes

Due to sequestration, 337,000 victims of domestic violence, child sexual abuse, adult sexual assault, and other crimes will lose critical support and services they receive through the Crime Victims Fund to help them recover from the heinous crimes committed against them.

Every year, the Crime Victims Fund—established under the Victims of Crime Act, or VOCA—provides millions of crime victims in communities across the country with vital services in times of crisis. VOCA funds provide sexual-assault services, support for crisis intervention, assistance with the criminal-justice process, counseling, investigation and prosecution of child and elder abuse, and more. It also provides compensation to victims of crime.

Federal criminal offenders pay into the VOCA Crime Victims Fund through fines and penalties levied against them, meaning that it is budget neutral, doesn’t cost taxpayers anything, and doesn’t add to the national debt or deficit. But even a funding stream such as the one VOCA provides hasn’t escaped Congress’s reckless budget cutting: Sequestration is expected to reduce VOCA victims-service-assistance grants to states by $37.2 million, resulting in the more than 377,000 victims losing access to these services in FY 2013 alone. These grants fund services for victims of child sexual abuse (38,767 fewer served), domestic violence (178,894 fewer served), and adult sexual assault (21,363 fewer served). And the list goes on.

But it doesn’t end there. Due to the irresponsible budget-cutting environment, Congress this year asked the Department of Justice, which administers these funds, to cut management and administrative expenses from the VOCA fund for the second year in a row, compounding the cuts to victims services already set to take place under sequestration. Last year was the first year Congress had ever instructed the department to cut the fund for this purpose. This cut to VOCA funding is expected to reduce the number of victims served by nearly 578,000 on top of the sequester reductions, resulting in an estimated total of 955,843 fewer victims served in FY 2013.

Congress finally passed the Violence Against Women Act and then cut its funding

Countless victims of domestic violence and sexual assault waited and waited as Congress dragged its feet for nearly two and a half years to reauthorize the Violence Against Women Act, or VAWA, which provides for services and law enforcement for victims of domestic violence and sexual assault. Congress finally reauthorized the landmark law this year, but just as the victims thought they had finally scored a victory, sequestration slashed funding for the programs authorized under this vital law.

VAWA and the Family Violence Prevention and Services Act, or FVPSA, provide two of the most reliable sources of funding for domestic violence and sexual assault. At least 106,000 fewer victims are expected to receive services through these sources due to sequestration. And these cuts come at a time when a recent survey by the National Network to End Domestic Violence reports that 88 percent of state domestic-violence coalitions reported an increase in demand for services and 69 percent of these coalitions reported funding decreases.

Agencies and facilities across the country serving these women are grappling with how to handle the budget cuts. Most find themselves choosing between cutting services or staff, or closing down altogether. A recent report by the Police Executive Research Forum found that 56 percent of 700 responding agencies reported that the poor economy is driving an increase in domestic violence, up from 40 percent in a similar 2010 survey.

Early estimations of the effect of sequestration are now becoming reality. In the military, which has been plagued by rising and epidemic levels of sexual assault among its ranks, the U.S. Army has reported that sequestration may hinder its ability to hire 829 military and civilian sexual-assault response coordinators. In Louisiana, an organization that provides 11 specially trained nurses who travel the area to collect DNA evidence from rape victims at hospitals may have to close its doors due to sequestration-related funding shortages. And the Kentucky Domestic Violence Association may have to eliminate sexual-assault-prevention staff from its ranks due to a lack of funds. The combined impact of sequestration on VAWA, FVPSA, and VOCA alone is crippling the critical support system upon which victims of domestic violence and sexual assault rely.

Federal funding cuts to law-enforcement programming may be virtually unfunded by 2021

These devastating cuts to victims services come on the heels of two years of drastic and unprecedented cuts to federal public-safety programming. Programs such as the Byrne Justice Assistance Grant, or Byrne JAG, and the Community Oriented Policing Services, or COPS, hiring grants are some of the vital federal sources of funding that state and local law agencies rely on for law enforcement, prosecution, crime prevention, education, corrections, and victims assistance.

A recent survey of 714 organizations, mostly local and state law-enforcement agencies, done by the National Criminal Justice Association and the Vera Institute of Justice found that over the past two years alone, federal support for criminal-justice assistance-grant programs has decreased by 43 percent. Left unchanged, the cuts mandated through sequestration could leave these vital federal programs virtually unfunded by 2021. These federal programs provide substantial funding for components of the criminal-justice system, including the National Instant Criminal Background Check System, which saw its funding cut by 75 percent in FY 2012, and juvenile-justice and delinquency-prevention programs, which were cut by more than 50 percent in FY 2012.

The real effects of these cuts are emerging. One respondent to the National Criminal Justice Association and the Vera Institute of Justice survey from Ohio, for example, said that, “If projected cuts in government funding proceed, we anticipate that our court advocacy program will be greatly curtailed, if not virtually eliminated. That means we will not be able to offer hands-on assistance in accompanying victims to court proceedings and in assisting clients obtain protection orders.”

A law-enforcement respondent from Kentucky said that personnel and equipment needs were cut in half in FY 2012 due to funding cuts. “It’s hard to estimate the devastation these cuts will make to an already horrible condition,” said the respondent.

Cutbacks in funding to law-enforcement programming are on a dangerous trajectory. Through funding cuts and sequestration, Congress is asking law-enforcement agencies across the country to choose between a terrible set of options, none of which provide any comfort to victims of crimes such as sexual assault and domestic violence. These cutbacks are already hindering the ability of local criminal-justice systems to respond to crimes and provide support to victims.

Conclusion

Responding effectively and responsibly to crime requires an entire system of justice—one that provides adequate resources to law enforcement and victims-service agencies so that they can respond in times of crisis and help victims get back on their feet and seek justice. Unfortunately, there is nothing effective, responsible, or adequate about how Congress is treating victims of crime today. The current reckless budget-cutting environment threatens this entire system due to the immediate effects of sequestration and the further troubling trend of declining public-safety and victims-service funding.

Before boarding planes to go home on recess last month, Congress rushed to fix sequestration-related inconveniences for air travelers, but victims of crime and the law enforcement and other agencies that serve them remain dangerously shortchanged. Victims of crimes such as sexual assault and domestic violence have nowhere else to turn, and they deserve to be a priority every bit as much as air travelers do.

Erik Stegman is the Manager of the Half in Ten Education Fund at the Center for American Progress.

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Transcript

Good afternoon. I want to begin by sincerely thanking Dean Bill Treanor for inviting me here to speak with you all today. It’s truly an honor to be here on the day that you celebrate each other’s scholarship. I think the depth and breadth of research, analysis, scholarship, and policy advice at Georgetown Law is amazing. I deeply enjoy being able to participate in this faculty as a visiting professor and look forward to each semester I’m able to teach here at my alma mater.

If you’ll indulge me, I want to talk today about two topics that I am currently immersed in but that don’t usually get linked in the same conversation: ending extreme poverty abroad and the deep challenges we face around inequality here at home.

To give you some context, last summer I was named by U.N. Secretary General Ban Ki-moon as 1 of 27 members of a high-level panel on the post-2015 development agenda. The panel is tasked with making recommendations for a framework to guide global development after the Millennium Development Goals [or MDGs] expire at the end of 2015.

Some people think of me as more of a domestic-policy person since I have spent my career on Capitol Hill and at the White House working on issues from federal budget and tax policy to government secrecy. But that little bit of Jesuit DNA in me has always drawn me to work on addressing the needs of the poorest of the poor, so it has been a real honor and privilege to serve on the high-level panel alongside government officials, activists, academics, and business leaders from around the world. And I’ve learned so much about the rapidly shifting paradigm of development and in such a short time that I sometimes feel I’ve earned a Ph.D. in development studies over the past year.

What has surprised me is that I am finding that while there are, no doubt, differences, the international development context and the lessons drawn from the successes and failures of the Millennium Development Goals in particular can help inform political and economic decision making in the United States.

The high-level panel has met four times over the last eight months in New York, in London, in Monrovia, and in Bali. In comparison to the process that created the Millennium Development Goals, which was very much like a monologue spoken by the U.N. development experts to the member states and civil society, the post-2015 process has been a dialogue of many passionate and distinct voices. As a member of the high-level panel, I’ve done more than 100 consultations with civil society, activists, women, the disabled, the private sector, and young people about their priorities for development.

The Millennium Development Goals, of course, focused on a wide range of targets, goals, and indicators—everything from cutting the number of people living on less than $1 a day in half to reducing child mortality rates to increasing access to clean drinking water to increasing access to drugs to combat HIV and AIDS. The consultations the high-level panel has participated in around the world have found a similar shopping list of proposals to help end extreme poverty: clean cookstoves, reproductive health care, universal literacy, banking and financial services.

But over and over again, we on the high-level panel hear the message that we won’t bring an end to extreme poverty if we ignore the forces and factors that drive inequality.

It’s the issue of inequality and its solution—the goal of equitable, sustainable growth and shared prosperity—that I ultimately want to consider today. As you all know, inequality, and particularly inequality of income and of wealth, is a topic that has received an incredible amount of attention in the domestic context in recent years. And I do want to talk about our country—about inequality, isolation, and distrust in the United States.

But first, I want us to consider the Millennium Development Goals because I think we can take important lessons from what has and has not worked in this agenda and apply those lessons not only to the post-2015 framework but to the challenges we face here at home.

It’s important to remember that the success of the Millennium Development Goals—where we have seen success was not entirely expected. There were plenty of MDG skeptics back in 2000 and 2001. Nothing resembling a comprehensive global development agenda—an agenda for which the nations of the world would be held accountable—had been attempted before. There were questions about what, if anything, the MDGs would achieve.

With a little less than 1,000 days until the end of the MDGs, I think it is safe to say that this agenda has made the world rethink how we approach development. The MDGs have shown us that international aid can be accountable, progress can be tracked and compared between regions and populations, and we can achieve some remarkable progress together.

The World Bank tells us that the goal of halving the proportion of people living on less than $1.25 per day has been achieved ahead of schedule, for instance. This alone moved some 600 million people out of extreme poverty, a figure we can surely improve upon before the end of 2015. The most recent U.N. progress report on the MDGs says that poverty rates have continued to fall, even in the aftermath of the global economic downturn and, perhaps most significantly, in every region of the world.

And after rising precipitously in the first part of the decade, the number of people dying from AIDS-related causes has fallen by 24 percent since its 2005 peak. This is significant progress and puts us well on our way to achieving an AIDS-free generation.

But there are goals and targets where progress has been uneven and where progress has not been broadly shared. Child mortality is one of these. Overall, we are only halfway toward meeting the Millennium Development Goal of reducing the childhood-mortality rate by two-thirds. Under-five mortality has fallen worldwide, but 82 percent of deaths among very young children now occur in sub-Saharan Africa and southern Asia. These regions now account for a higher overall percentage of child deaths than they did before the MDGs were enacted.

What lessons can we take from these experiences? One is that we need to be considerably more deliberate in the post-2015 agenda about ensuring that the poorest and most marginalized populations and nations are able to share in the world’s progress.

The extreme poor lead lives of extreme isolation. And unfortunately, within countries, the MDGs alone have often been insufficient to reach traditionally disenfranchised populations. Geography, ethnicity, gender discrimination, caste, religion, and conflict have all contributed to this problem. Marginalization does more than hurt the affected individuals, though the harm, deprivation, and fear these groups often face are tragic. But the isolation of traditionally marginalized groups and the extreme poor also hinders and inhibits economic growth. We know, for instance, that as women achieve greater levels of social and political participation, living conditions and public polices improve accordingly. Countries that still systematically exclude women from public life are limiting themselves economically and socially.

We’ve learned the hard way that even the very best and most well-financed programs that intend to lift the poor out of poverty won’t make a dent in some places if families don’t have the right to own land, if women can’t inherit land, if individuals lack a legal identity, and if people are under constant threat of violence. We know we won’t achieve broad-based and inclusive economic growth if government budgets remain cloaked in secrecy or if a country’s natural resources are looted by a kleptocracy.

This broad agenda of combating the isolation faced by the poorest of the poor by better connecting them to the economic, social, and political lives of their countries is one that I have repeatedly advocated at the high-level panel meetings. Given the enormous disparities between regions and countries in progress toward achieving the Millennium Development Goals, this message of improving connectivity in order to address the root causes of poverty, and not just its symptoms, is one that resonates.

We on the high-level panel are now in the process of preparing our report to the secretary general, which is due at the end of May. Including new proposals for specific, measurable goals and targets—as in the Millennium Development Goals—is important for accountability to the agenda. But in addition to a set of goals, the post-2015 agenda needs a unifying vision—a series of aspirations that cut across and tie together individual targets for a broader purpose.

Addressing inequality, boosting livelihoods with social protection, and ensuring that marginalized populations are reached by development efforts is one part of that vision. Connectivity to economic, physical, and social infrastructure is another. Making development both environmentally and economically sustainable is similarly important. Each of these broader narratives ought to have its place in the post-2015 agenda.

The Millennium Development Goals have also demonstrated something that will be familiar to many of you. We can take an important lesson in economic policy from the MDGs, namely that increasing GDP is insufficient in and of itself to guarantee widely shared prosperity. Equitable growth is difficult to achieve without a trusted and transparent government, without a social safety net to provide resilience in the face of economic shocks, and without active investments in education, health care, and infrastructure.

This is as significant for policymaking and politics in the United States as it is overseas. For generations America’s economic dynamism has been shaped and sustained by the strength of a broad and prosperous middle class and by the efforts of lower-income families to move up the economic ladder. But over the last 30 years, with one brief interruption in President [Bill] Clinton’s second term, changes in the distribution of income, wealth, and provision of opportunity have altered the formula that helped make the United States a global economic powerhouse. Economic inequality has returned to levels unseen since the Roaring ‘20s, putting the United States squarely in the top one-quarter of the world’s most unequal countries.

It seems as though the American Dream is disappearing before our eyes. We tell our children that if they work hard, stay in school, respect one another, and play by the rules, they will be successful. We tell talented children from low-income families that they can move into the middle class through education and entrepreneurship. But in recent decades, economic mobility—which is the measure of a child’s ability to occupy a different position on the income ladder than his or her parents did—has fallen well behind mobility in Canada, Britain, and other advanced economies.

As the wealthiest Americans accrue ever more income and wealth; as middle-class wages stagnate and indeed fall; as the costs of important services like health care and education rise faster than the rate of inflation; as the poor face ever more stringent rules governing food, housing, and cash aid; as all of these trends continue, our common vision as a country becomes tested and frayed.

I don’t think it’s a coincidence that today, with income inequality at an all-time high, trust in government is at an incredible low. Washington must look strange indeed to the single mother working two jobs to make ends meet or for the service worker who has been out of work for more than a year or the college student who didn’t finish his degree but still faces a mountain of debt.

We urgently need to find policies that will promote sustainable, equitable economic growth. Conservatives in Congress and on cable news like to say that “we can’t afford” this program or that one—spending on education here, low-income heating assistance there. The sequester really doesn’t matter until it interferes with the shuttle to New York City. What we really cannot afford is to allow our middle class, the most powerful engine of economic growth the world has ever seen, to continue to stagnate and decline.

We need to find policies that are actionable and accountable, much as the post-2015 development agenda will need specific, measurable goals and targets. But I would go further and say we also need a new vision for our country and our politics.

The think tank I founded, the Center for American Progress, bills itself as a progressive organization, and I think of myself as a progressive. Progressivism at the turn of the 20th century, of course, with roots in both major parties, was born out of a response to the sweeping social changes of the industrial revolution. The Progressive Era helped bring down political corruption and curb the labor and economic abuses of robber-baron capitalism. The Progressive Era helped create the regulatory regime that we still rely on today to make sure our food and consumer products are safe. The Progressive Era saw the beginnings of the American tradition of land conservation under [President] Teddy Roosevelt. And the Progressive Era saw the rise of an expansive American middle class.

Progressives today, of course, differ somewhat from progressives of the early 20th century. But we need a vision that maintains individuality and individual agency but also acknowledges the enormous debt we owe to one another. None of us has made it on our own. We are in this room today because of common investments we and our forebears made—investments that were both deliberate and accidental. We didn’t die from smallpox or polio because vaccines were developed and paid for. I attended public schools in Chicago and received a public scholarship to help pay for my college education. Closer to the present day, some of us, I’m sure, took the government-run Metro to get here, while others drove on government-financed roads.

But the more unequal we become as a country, the harder it is to garner public support for investments like these. Sometimes I worry we are trapped in a negative feedback loop: As inequality increases, trust in government declines, enabling the most antigovernment forces to justify cutting public programs, thereby exacerbating inequality and further decreasing trust. Daron Acemoglu and James Robinson’s important book, Why Nations Fail, provides a chilling analysis of where that cycle ends.

The Law Center is a somewhat unusual institution in that so much of our scholarship here is already very policy-oriented and very engaged in the debates of the day. But I think the academic community more broadly—here at the Law Center and particularly in the more cloistered law schools and economics departments around the country—have an enormously powerful role to play in informing this conversation. While researchers have done a great deal to document the rise in inequality over the last 30 years, we know less about what has been driving those trends and even less about what we can do to reverse them. We need better information on the relationship between inequality and economic growth because we need to know what effect our increasingly unequal society will have on our prosperity as a nation. And we need to know which policy levers are best equipped to make our economy work for all Americans again.

As we’ve seen from 30 years of trickle-down ideology and as we’ve seen from the uneven progress of the Millennium Development Goals, we simply cannot count on progress to be widely shared unless we are deliberate about ensuring that it is.

The Center for American Progress is launching a new initiative focused on spurring academic research into inequality and economic growth. It’s time for academics to help bridge the gap between rigorous research and public policymaking. The parameters of the work we will undertake and support under this new initiative are still being finalized, but I’m enormously excited by what I think the intellectual energy of American academia can bring to these issues.

[University of Massachusetts] economists Samuel Bowles and Herbert Gintis have shown that 50 percent of wealth variation in the United States and 35 [percent] to 43 percent of income variation is due to the wealth and income of a person’s parents. Of course, we’ll never have a perfectly egalitarian or meritocratic society. I am not sure any of us would want such a world even if it was achievable. Competition can be beneficial, and families and friends will always strive to help their own.

But I think that we certainly do not need to accept this status quo. The American public in my view will support concerted public efforts in education, in research and development, in infrastructure, and in health care if they believe that they will work—and specifically, that these investments will work to build shared prosperity. But we need academic research to demonstrate to the public that the empirical evidence shows what their hearts already believe: that the American economy and our American democracy is at its strongest when we’re playing on a level field and when all parts of society can enjoy the fruits of progress. We need academic research to help policymakers identify those investments that will make our eventual success less dependent on who our parents happen to be, whether we’re from Milwaukee or Monrovia.

Thank you again for having me here today, and I look forward to taking your questions.

John Podesta is Chair of the Center for American Progress.

SOURCE: AP/Robert F. Bukaty

Secretary of Agriculture Tom Vilsack speaks at Maine Medical Center, Thursday, March, 14, 2013 in Portland, Maine.

A panel at CAP tomorrow will examine the interrelation between hunger, obesity, and nutrition, a trifecta that impacts millions of Americans and merits significant public policy attention. Residents of cities such as Pittsburgh must travel considerably long distances to use their Supplemental Nutritional Assistance Program, or SNAP—formerly known as food stamps—benefits to purchase healthy foods frequently unavailable to them in their own communities. The unavailability of healthy foods in turn puts these residents at risk of obesity.

When considering the impact of obesity on the nation’s future, the value of U.S. Department of Agriculture programs and federal and state efforts such as the Healthy Food Financing Initiative is quite clear. Local solutions—such as expanding the number of community gardens to improve vacant community spaces and provide local sources for fresh produce, and ensuring that individuals and families can use SNAP benefits at farmers’ markets selling fresh produce—are important as well.

Research recently sponsored by the Emerson National Hunger Fellows Program and Just Harvest in Pittsburgh combines the USDA’s two indicators of food access—neighborhood poverty and distance—with a number of other critical indicators to develop a more inclusive and locally relevant list of “food desert” communities, the poor rural and urban communities lacking access to fresh fruits and vegetables. Assessments of SNAP retailers in more than 20 towns and neighborhoods in Allegheny County and Pittsburgh offer a clear picture of what types of food are available to area residents. Of the 74 stores assessed in food deserts, only 13 retailers offer a mostly limited selection of fresh produce. And of the 21 communities visited, only three had a grocery store.

In most of the assessed communities, more than 90 percent of the local grocery dollars are “leaked” into other distant, and often more affluent, communities. This means that vulnerable low-income families and individuals without vehicles or reliable access to public transportation must shell out additional cash for transportation to a grocery store. This unique surcharge on the poor, known locally in Pittsburgh as a “jitney,” cuts into valuable dollars that could be spent on more costly healthy foods or other vital household needs such as rent and energy bills.

Many residents regularly travel more than a mile or as much as 3.5 miles to access a nearby grocery store. Elderly residents and young parents frequently speak of their difficultly in accessing fresh foods and indicate clear dissatisfaction with the lack of walkable access to healthy food retail. Additionally, some communities in Allegheny County lack direct public transportation access to grocery stores. Residents of Clairton, Pennsylvania, for example—a heavily impoverished and low-vehicle-ownership community—must cross a dangerous highway to transfer between the two buses providing the most direct access to a grocery store. And to get to the nearest supermarket, they have to catch a bus and walk nearly a mile from the bus stop to the store.

As pointed out in multiple studies and two recent articles in The New York Times and Los Angeles Times, many experts disagree as to whether a causal link exists between food deserts and the likelihood of residents being obese or overweight. There is not and may never be a definitive answer to this important research challenge. The experience in places such as Pittsburgh, however, makes it perfectly clear that communities with disparate access to healthy and affordable foods for all are setting up their residents for poor health outcomes.

The current focus of national-level food-desert measures on distance and poverty in neighborhoods as opposed to individual experiences overlooks important barriers and conditions that impede food access for many. Although the Hill District and Homewood are subjects of one of the largest studies of food deserts to date and are notoriously known in Pittsburgh for the lack of fresh food and for the distances residents must regularly travel for grocery shopping, the USDA currently does not recognize either community as a food desert. While both communities are located within a mile of grocery stores, as the crow flies, anyone who has ever spent some time in Pittsburgh knows that within that mile are burdensome elevation shifts, often of several hundred feet. Unfortunately, the USDA metric used to locate food deserts leaves out important locally relevant indicators of food access such as topography, transportation accessibility, and rates of vehicle ownership. To more effectively inform future policies and target resources to people and neighborhoods with the most critical needs, the USDA should continue to revisit its approach to measuring food deserts to account for important local factors that affect food access.

Infrastructure barriers similar to those found in parts of Pittsburgh and in towns such as Clairton undoubtedly contribute to some local residents’ inability to maintain a healthy diet. If these families and individuals lack the resources or time necessary to travel to distant grocery stores, they are left to cope with dollar-store diets. While very few neighborhoods are left entirely without food sources, the stores in low-income communities and communities of color often offer mostly processed and preserved foods and limited fresh and nutritionally dense foods.

In recognition of the challenges these barriers pose to healthy food access, the USDA recently announced implementation of a SNAP nutrition education grants program. This initiative will provide full federal support to states for local organizations and SNAP retailers to promote nutrition education and increase the number of healthy options available to low-income residents.

There are also a number of indigenous solutions in the Pittsburgh area that could benefit significantly from support for healthy food initiatives and interventions from sources such as the USDA. Last year Just Harvest successfully advocated for the city to accept Electronic Benefit Transfer, or EBT, at each of the seven Citi Parks farmers markets. And the Loaves and Fishes buying club, an initiative developed by dedicated community members such as Rev. Les Boone, delivers fresh foods to residents of Hazelwood, a local food desert severely burdened by a lack of access. What’s more, the city of Pittsburgh is building upon a growing local urban agriculture movement by launching several edible gardens in low-income communities throughout the city.

In February 2011 CAP made the case for state action food plans that would enable states to identify food system needs and undertake such efforts to maximize the economic and nutritional impact of school meals and supplemental nutrition assistance. With federal funding and increased flexibility to support nutrition education efforts, states such as Pennsylvania can work with municipalities to develop initiatives that increase and incentivize EBT redemption at farmers markets and healthy food retailers, support homegrown models such as Loaves and Fishes, and allow even more community gardens to blossom.

In a visit to his hometown in 2008, Secretary of Agriculture Tom Vilsack recalled his own struggles of being tormented about his weight as a child growing up in Pittsburgh and how it presaged his lifelong battle with weight control. Today just blocks from where Secretary Vilsack grew up, new generations of Americans still encounter conditions that perpetuate obesity and poor health. The rapid increases in hunger and obesity affect us all and pose a threat to the future prosperity of the nation as a whole.

Although there may never be agreement on whether food deserts are a direct cause of obesity, Pittsburgh offers an instructive lesson: Access to affordable healthy food should be more than just a privilege for some; it should be a right for all. People have no chance to improve their health outcomes if they lack access to the resources that make better healthier choices possible.

Zach Murray is a Bill Emerson National Hunger Fellow with the Poverty and Prosperity program and Progress 2050 project at the Center for American Progress.

It is a pleasure to be with you all today. Let me begin by thanking Kathy Calvin and her team at the U.N. Foundation for graciously hosting and organizing this event today, and being terrific partners throughout my tenure serving on the U.N. High-Level Panel developing a post-2015 agenda. We’re partners on many things. I want to do a shout out to my friend Tim Wirth, the founding president and CEO of the U.N. Foundation; Kathy has just recently taken over both titles. Tim and I both had the good sense to turn the whole kit and caboodle over to outstanding women leaders in the organizations we founded to take those organizations to a whole new level.

I also want to thank Jim Kolbe, who I had the pleasure of getting to know during my days in the Clinton administration. Jim has always been a voice for well-reasoned international engagement, first in Congress and now at the German Marshall Fund, and his common-sense approach to these issues is something I’ve always appreciated.

Today marks an important milestone. One thousand days away from the end date of the Millennium Development Goals, we should take stock of what we’ve accomplished—and should consider what remains to be done. And in defining the post-2015 agenda, we should reflect on the ways in which our world today is different than the world in 2000.

Why should America care about the Millennium Development Goals?

The response, I think, is quite simple, even in our poll-driven culture: We should care about the MDGs because it’s the right thing to do.

And I would go further and say Americans already do care about this agenda, even if they don’t know what “MDG” stands for.

We all know the conventional wisdom. The American public hates foreign aid. Polls show it is the least popular item in the budget and the only area where people consistently support spending cuts.

But when asked about targeted programs for health care, education, and poverty reduction, a very different picture emerges. And Americans are personally supporting the development agenda in record numbers. American private giving to international development is far greater than that of any other country.

Official development assistance is critical to achieving the ambition of the MDGs. Indeed, the United States has made an enormous effort to move us toward these goals through our bilateral aid programs and our contributions to multilateral institutions. And that effort is supplemented and is sometimes surpassed by the enormous dynamism of our NGOs, universities and private philanthropies, and through the power of the private sector.

What I am saying is, we shouldn’t despair because the American public knows little about the MDGs, or assume that Americans are opposed to lifting up the poorest people in the world based on polling questions of dubious reliability.

What’s more, I believe this is the very moment to make those arguments and to show Americans that the MDGs and the development agenda are something they already believe in. We can do that without resorting to the strategic arguments for development, although those are true and important as well. After all, everyone in this room knows that gross underdevelopment fuels instability. We all know that stable, democratic countries with healthier, better-educated populations make better allies and better trading partners.

And trying to address the real causes of poverty and give people the tools they need to succeed suddenly has resonance. As a Catholic, Italian American, Georgetown alum, I am glad to see that an Italian-Argentinian Jesuit became pope. It was refreshing to learn that Cardinal Bergoglio told his countrymen that instead of flying to Rome for his installation ceremony, they should instead donate the money to organizations that work with the poor. As Pope Francis said when asked why he chose his name, “He is the man who gives us this spirit of peace, the poor man. How I would like a Church which is poor and for the poor!”

The MDGs began as a monologue of expert opinion directed at development professionals. Over the next 1,000 days, organizations like the U.N. Foundation, the Center for American Progress, the ONE Campaign, Save the Children, and many others need to turn that monologue into a national and, indeed, a global dialogue.

We need to bring attention to the MDGs using tools that were certainly not available in 2000, like the #MDGmomentum global social media rally taking place today and through the weekend to spark global conversation. I recently took the leap to Twitter myself, and I don’t want to sound like the recently converted, but I am hopeful that initiatives like this online rally will help ensure broad public discussion on these issues going forward.

The process of developing the post-2015 agenda has deliberately been open and collaborative. I’ve felt incredibly fortunate as a member of the High-Level Panel to be able to hear from civil society, activists, women, the disabled, the private sector, and young people about their priorities for development.

The post-2015 agenda will be shaped by input from all of these groups and by the changes we’ve seen in the world since the MDGs were adopted. And that agenda will obviously also be shaped by the lessons we’ve learned from the MDGs.

But before looking beyond 2015, I want to talk briefly about the near term. I am convinced that we can accomplish a great deal in the next 1,000 days.

I think U.S. efforts will be particularly crucial in several areas between now and 2015. Reducing extreme poverty is one. While the goal of halving the proportion of people living on less than $1.25 per day has already been achieved—moving more than 600 million people out of extreme poverty in the process—we must not let up on pushing this target forward. Evidence suggests that economic growth is the main, but certainly not sole, determinant of poverty reduction. The U.S. government is committed to continued support for broad-based economic growth and democratic governance as a foundation for poverty reduction. The United States has been thoughtful in its approach to poverty reduction, building and implementing key partnerships to tackle some of the biggest development challenges of our time.

The United States has been a cornerstone of the effort to combat infectious diseases, bringing together partner governments, donors, and pharmaceutical companies to make an AIDS-free generation a reality. Through PEPFAR, the United States is currently directly supporting more than 5.1 million people in treatment—up from 1.7 million in 2008.

As a result, the number of people dying of AIDS-related causes has fallen by 24 percent since its peak in 2005. This falls short of the current MDG target but it is nevertheless a substantial step forward.

To combat global child mortality, last year the United States partnered with UNICEF and the governments of Ethiopia and India to create the Child Survival Call to Action, a hugely ambitious joint partnership to end preventable deaths for children under 5. This partnership has created a global road map to reduce under-5 mortality to below 20 deaths per 1,000 live births in every country by 2035.

This effort exists alongside other partnerships, including the Every Woman Every Child initiative, which aims to save the lives of 16 million women and children by 2035. The U.N. secured $40 billion in commitments from 243 partners for the Every Woman Every Child initiative, and has helped to distribute more than $118 million in funds. Although much progress has been made, the world has more to do in the fight to end needless deaths of mothers and their children.

Maternal mortality has declined 47 percent since 1990 but that level is far short of the 2015 target and developing regions still have maternal mortality rates 15 times higher than developed regions. Likewise, the world is still only halfway to reaching the MDG target of a two-thirds reduction in the under-5 mortality rate. We need to accelerate our efforts in the next 1,000 days to bring maternal and child mortality rates in line with the MDG targets.

This is by no means the sum of all the important work the U.S. government and its partners will be undertaking in the next 1,000 days to realize the ambition of the MDGs. But I wanted to highlight these examples because they all utilize broad and cooperative partnerships—between government agencies, other countries; between the public, nonprofit, and private sectors—to achieve their goals. By working with bilateral and multilateral partners, leveraging the capital and expertise of the private sector, and engaging with nonprofits and with civil society, each of these efforts can have a far greater impact than if the U.S. government tried to do it alone.

This growing emphasis on partnerships reflects the changing nature of development and the context in which we must frame the post-2015 agenda. For years, the debate about poverty, development, and sustainability was framed around divisions between North and South, developed and developing nations. That bipolar world simply no longer exists.

Nations like Brazil and India still have sizeable populations living in extreme poverty, but these countries are now donors themselves as well as political and economic dynamos. In 2000 conversations about development focused largely on official development assistance. Today we recognize that private capital, domestic resource mobilization, philanthropy, public-private partnership, and technology innovation and transfer are equally important parts of the equation.

And the profile of global poverty is changing as well. In 1990, 80 percent of the world’s poor lived in stable low-income countries. Today roughly half of the poor live in stable, middle-income countries, while 41 percent are living in fragile and conflict-affected states. This means that ending extreme poverty in our time will require us to assist the marginalized poor in middle-income states while helping fragile states put in place the political and economic systems that will help break repeated cycles of crisis and violence.

Within countries the MDGs have often been insufficient to reach traditionally marginalized populations. Geography, ethnicity, gender discrimination, caste, religion, and conflict have all contributed to this isolation. This marginalization harms more than the affected individuals—it hinders and inhibits economic growth. We know, for example, that as women achieve greater levels of social and political participation, living conditions and public policies improve accordingly. Countries that still systematically exclude women from public life are limiting themselves economically and socially.

To ensure that our efforts truly stimulate inclusive economic growth, we must increase GDP and also deliberately focus on breaking down the barriers that prohibit individuals, families, and entire communities from connecting to opportunities within their countries.

This is perhaps the greatest philosophical shift from the original MDGs. We now know that sustainable economic growth is not simply about increasing the size of national economies but about shaping enduring systems and institutions that respect the rights of individuals and give them the tools they need to help lift themselves out of poverty. Sustainable economic growth requires ensuring the poor have what I call “connectivity.” Connectivity broadly encompasses issues like access to health care, education, and job opportunities; connections to physical, financial, and energy infrastructure; and the opportunity to actively participate in the civic and economic lives of their countries and to be recognized legally by their governments.

The High-Level Panel has made significant progress in crafting a vision for a post-2015 development agenda over the course of our four meetings in New York, London, Monrovia, and Bali. Our mission is “to end extreme poverty in all its forms in the context of sustainable development and to have in place the building blocks of sustained prosperity for all.” Given this vision, I was pleased when President Obama’s State of the Union speech staked out very similar ground. The president said:

… progress in the most impoverished parts of our world enriches us all. … In many places, people live on little more than a dollar a day. So the United States will join with our allies to eradicate such extreme poverty in the next two decades by connecting more people to the global economy; and empowering women; by giving our young and brightest minds new opportunities to serve, and helping communities to feed, power, and educate themselves; by saving the world’s children from preventable deaths; and by realizing the promise of an AIDS-free generation.

President Obama’s bold vision can be realized. The MDGs show it is possible to unite the nations of the world in the pursuit of a broad and ambitious development agenda and to strive to ensure accountability for those goals and targets. But now we should move beyond the framework of eight separate silos, which are insufficient for the world we live in today.

To meet the post-2015 challenge, and to meet President Obama’s ambitious call to action and address the needs of the poorest of the poor, the post-2015 agenda should:

1. Take into account the changing distribution of poverty and the end of the donor-recipient paradigm
2. Be focused on sustainability—the creation of sustainable economies, the sustainable management of natural resources, and the use of sustainable development practices
3. Recognize that it isn’t enough to try to mitigate the symptoms of poverty; we must also be honest about its sources and dedicated to addressing its root causes

The poorest of the poor operate on a very uneven playing field and remain highly disconnected from the societies and economies around them.

We have learned the hard way that even the very best and most well-financed programs meant to lift the poor out of poverty won’t make a dent in some places if families don’t have the right to own land, lack a legal identity, and are under constant threat of violence. We know we won’t achieve broad-based and inclusive economic growth if government budgets remain cloaked in secrecy, or if a country’s natural resources are looted by a kleptocracy.

This goes back to the need for the post-2015 agenda to focus on connectivity and sustainability. The extreme poor lead lives of extreme isolation. It is difficult to be included in an economy that is growing when you have no points of connection to that economy or to the larger society.

Think about the deep economic and social isolation experienced by a young couple trying to scratch out an existence in a rural village. They may not have secure land rights, meaning that if the husband dies, his wife may not inherit the land and will be dispossessed. And if the land is degraded by environmental damage, severe weather, or climate change, food insecurity can quickly morph into hunger or starvation.

They cannot access a road to get to a market to sell the food they grow. And they don’t have access to electricity, so their children are unable to study at night. They make an enormous effort to gather fuel, which they use to cook in stoves that fill their home with soot and smoke and poison their children. The government may provide a skilled birth attendant if the wife gets pregnant, but our disconnected couple has no practical way to travel to the see the attendant when she goes into labor.

Their choice is often to remain in hopeless conditions in their rural village or move to an urban slum. Once they get to the city, there is a good chance they will lack access to sanitary facilities. If they try to work, they may lack a legal identity, which means they will be taken advantage of by their employers. The women and girls may be subject to sexual exploitation. The entire family certainly will have little or no access to social protection or to a justice system that can redress abuse.

Individual goals and targets—to increase school enrollment, say, or to provide that trained birth attendant—aren’t sufficient on their own to address the breadth and depth of extreme poverty. This isn’t to say that the post-2015 agenda shouldn’t be specific; indeed, I strongly believe that specific, measurable targets are important for accountability and for tracking progress. But as I’ve said to my fellow panelists, individual goals have to be embedded in coherent national strategies to connect that couple to economic opportunities, to jobs, to justice, to reproductive health care, and to broader society that in turn will engender greater equity and opportunity—particularly for women—and will create the conditions for stronger, more sustainable growth as well.

I should note that the High-Level Panel is more like the first chapter rather than the last word on the post-2015 agenda. Our work and recommendations are just the beginning of a process that will eventually grow to involve every U.N. member state. Certainly, the High-Level Panel will not be a substitute for the series of other ongoing negotiations on crucial issues such as international trade and climate change. And I anticipate our recommendations will emphasize the linkage between poverty alleviation and sustainability, and will be harmonious with the conclusions of the concurrent Rio+20-mandated Open Working Group on Sustainable Development Goals.

Without taking on tasks that are beyond our purview, I believe the High-Level Panel can pursue a number of sustainability goals and targets that are universal in their nature, have direct links to extreme poverty, and would help shape a far better world by 2030.

For example, I would like to see the High-Level Panel embrace the existing G-8 and G-20 commitment to eliminate fossil fuel subsidies. The world currently spends roughly $700 billion a year underwriting fossil fuels. A meager 7 percent of these subsidies actually benefit poor households. Ending fossil-fuel subsidies would not only benefit the planet; it would also free up much-needed financing to be redirected to the poor and the post-2015 agenda.

Similarly, I think efforts to reach zero net deforestation and zero net desertification deserve serious consideration in the new agenda, as do efforts to dramatically reduce food waste, replenish fish stocks and sustain fisheries, improve energy efficiency and rely more heavily on renewable sources of energy. We need to understand that ending extreme poverty and promoting sustainability are not at odds with each other but are indeed mutually reinforcing and beneficial.

There is a firm commitment within the High-Level Panel to keep goals and targets measurable, specific, and accountable, as in the original MDGs. But the emerging post-2015 vision is different from the original goals in very important ways. The post-2015 vision moves beyond the artificial divide between North and South. It is a vision that recognizes the need to foster and support the kind of open, transparent public institutions and private-sector businesses that engender inclusive and sustainable economic growth. And it is a vision which takes account of different capacities, but in which every nation has a responsibility to contribute to the development agenda, a vision of a true global partnership which holds all of us accountable to one another.

The world has changed considerably since the U.N. Millennium Declaration was signed in 2000. But the need for an ambitious and far-reaching development agenda is just as keen as before. The difference is that we know now that such an agenda can be successful. For the next 1,000 days, governments, international organizations, NGOs, the private sector, and philanthropic actors around the world will continue to pursue the Millennium Development Goals—improving maternal health and reducing hunger, striving for gender parity in education, and reducing the incidence of malaria and HIV.

Beyond those 1,000 days, we will have a new agenda—one that builds on what we have learned from the MDGs. It will be an agenda tailored to some very new and the very old social, environmental, and economic challenges we face. It will be an agenda that I think the American people will support, whether they know the details of its programming and the genesis of its ideas or not. And it will be an agenda that moves us closer—ever closer—to eradicating extreme poverty in our time and for all time.

Thank you.

SOURCE: AP/Gregory Bull

A woman who only gave her first name, Ally, and said it was her first time applying for supplemental nutrition assistance waits to be called for an appointment at a city building in El Cajon, California, in 2010. Cuts to the Supplemental Nutrition Assistance Program proposed by the House Republican budget could affect up to 13 million people and cost the economy hundreds of thousands of jobs.

The House Republican budget for fiscal year 2014 proposes converting the nation’s bedrock nutrition-assistance program into a capped block grant to the states that would result in approximately $125 billion in cuts over the next 10 years. Forcing the Supplemental Nutrition Assistance Program, or SNAP, to become a block grant, in addition to the extra $10 billion in cuts to the program within the budget proposal, could result in up to 12 million to 13 million people—mainly children, seniors, and people with disabilities—losing their nutrition aid.

These cuts, however, would not just harm households that are struggling to put food on the table. They would also hurt many businesses’ bottom lines and would cost our economy hundreds of thousands of jobs by reducing demand for certain goods and services.

The proposed block grant would go into effect in 2019, forcing draconian cuts to the program in just the five years from 2019 to 2024. Assuming that these cuts will be spread out evenly over the five years, our analysis of a 2012 Center for American Progress study estimates that the House Republican budget nutrition block grant would cost the economy 342,950 jobs in the first year alone and hit the food industry especially hard.*

Nutrition cuts reduce the purchasing power of low-income families, who are in turn forced to spend less on basic needs such as putting food on the table. This reduced purchasing power ripples throughout the economy: Fewer families buying less food means less demand for grocery stores and retail, which in turn require less support from trucking and warehousing and need to make fewer purchases from food manufacturers and farmers.

While these direct, indirect, and induced job losses ripple throughout the entire economy, they have a disproportionate impact on a few sectors of the economy. According to our analysis of the 2012 CAP study, the 2019 SNAP cuts, for example, would result in approximately 11,300 jobs lost in retail including grocery stores, 21,000 jobs lost in food manufacturing and agriculture, and 8,250 jobs lost in trucking and warehousing.

The House Republican budget proposal presents a double hit for low-income families. The cuts to the Supplemental Nutrition Assistance Program would hit the pocketbooks of the families struggling most in this economy, exacerbating hunger and poverty for households mainly composed of children, seniors, people with disabilities, and working parents. But the proposal also cuts off pathways to opportunity by causing hundreds of thousands of job losses, which would hit young workers especially hard since they constitute a disproportionate share of workers in the food industry.

It doesn’t have to be this way. The $135 billion in proposed nutrition cuts to families struggling to put food on the table could be more than offset by eliminating the special write-offs for corporate meals and entertainment in the tax code, which total $140 billion over 10 years.

Congress can invest in jobs and lend a hand to struggling families, but it all comes down to choices and priorities.

Melissa Boteach is the Director of the Poverty to Prosperity program at the Center for American Progress.

* These estimates are based on a 2011 analysis showing that every $1 billion in SNAP cuts equals approximately 13,718 jobs lost. Because the production functions, costs of labor, and other inputs could change over the next five years, these numbers are an approximation.

SOURCE: AP/Tsvangirayi Mukwazhi

Faustine Janjira prepares food at her home in Highfields, a high-density suburb of Harare, Zimbabwe, October 17, 2006. Janjira, who lives with her sisters and their 10 children in a two-room house, struggles to feed the big family as only one member of the family works.

President Barack Obama pledged during his January 2013 State of the Union address that the United States would join with its allies to “eradicate” extreme poverty over the “next two decades” by connecting more people to the global economy and empowering women.

Putting an end to extreme poverty requires providing opportunities for all individuals, especially women, to thrive through education, nutrition, and health. In order to achieve this goal, a greater emphasis must be placed on gender equality and the removal of barriers that disproportionately affect women.

A great deal of progress has been made in the fight against poverty, particularly since the adoption of the U.N. Millennium Development Goals, or MDGs, in 2001. From 1990 through 2008, the number of people worldwide living in extreme poverty fell by more than 800 million. Yet barriers to prosperity still remain—such as inequality and discrimination against marginalized populations—and new challenges continue to emerge that impede goals to reduce poverty.

Approximately 1.3 billion people still don’t have access to electricity, and overcoming the lack of reliable sources of energy is an absolute hurdle to getting out of poverty. Other threats to the economic well-being of individuals and families—including climate change—endanger development gains and threaten to reverse them. And where there has been measurable progress alleviating poverty, that progress has been uneven: The most disadvantaged and poorest of the poor have not received the same benefits of development.

While the poverty rate has declined in many developing countries, much of that improvement has been concentrated in China. Worldwide, rural populations, ethnic minorities, the disabled, and women have not benefitted from the rising economic tide. From a global perspective, women own only 1 percent of property, earn 10 percent of all income, and yet they produce half of the world’s food.

Any poverty agenda must focus on women because they are 70 percent of the world’s poor. Women comprise two-thirds of the global illiterate population and all women face additional hurdles to their economic and social well-being, including the pay gap and the fact that women are much more likely to hold vulnerable jobs.

Because women constitute the majority of the world’s poor and because development goals have not been achieved—particularly where gender inequality thrives—women’s empowerment and gender equality must a focus of the U.N. development agenda beyond 2015 when the Millennium Development Goals are set to expire. The expiration of the Millennium Development Goals and the development of new Sustainable Development Goals are stimulating global conversations about how to address poverty and sustainable development. This issue brief looks at gender equality and women’s empowerment in the post-2015 U.N. development agenda framework.

Why focus on women?

The vital role of women in sustainable development has long been recognized. The 1995 Beijing Declaration from the United Nations’ Fourth World Conference on Women and the 1992 Rio Declaration recognized that empowering women is essential to sustainable development. Yet gender discrimination continues to be a key driver of poverty.

Meeting Millennium Development Goals to address poverty and gender inequity

Global gender discrimination gained further attention when the U.N. General Assembly considered a new agenda for addressing global poverty in the beginning of 2000. The Millennium Development Goals were introduced in September 2001 after a mandate by the U.N. General Assembly for its secretary-general to prepare a roadmap on how to implement the Millennium Declaration that was agreed to in 2000.

While the Millennium Development Goals stimulated investments, improved measurements of inequality, and informed ways to accelerate progress, not all of the goals are on track to be fulfilled, including two gender-related Millennium Development Goals: Goal 3—which aims to promote gender equality and empower women; and Goal 5—which pledges efforts to improve maternal health.

The Millennium Development Goals Report Gender Chart 2012 provides a status update on Goal 3:

• The average gap in primary education has been closed, however, disparities persist regionally and the poorest girls are not enrolled in school. There has been little progress in secondary and tertiary education gender parity since the 1990s.
• Women’s employment outside the agricultural sector increased from 35 percent to 40 percent between 1990 and 2010, but women’s participation in the labor market lags behind men, regardless of education and skills.
• Women make up less than 21 percent of parliamentarians worldwide. According to the report, “At the pace registered during the last 15 years, it will take nearly 40 years to reach the parity zone.”

Thus Millennium Development Goal 3 has not been achieved. A lesson learned from the Millennium Development Goals is the need to focus on the underlying barriers of educating young women and making opportunities available to women.

Progress on MDG Goal 5 also has not kept pace with global trends. The prevalence of contraceptives worldwide has increased since the 1990s but the expansion of contraceptives has slowed and remains low among the poorest and uneducated women. In half of the 48 countries in sub-Saharan Africa where data is available, the rate of contraceptive use is under 20 percent, according to a 2009 U.N. report.

The reduction in the adolescent birth rate, which is perpetuated by poverty and lack of education, has also progressed at a slow pace. Wealth and geographical gaps also impact the availability of prenatal and maternity care such that wealthy urban women are three times more likely than poor rural women to have skilled assistance during delivery. Only one in three rural women in developing regions receive adequate prenatal care. Inadequate funding for family planning is a major impediment to women’s reproductive and maternal health, yet the need for these services remains high in most regions, especially in sub-Saharan Africa where one in four women in relationships desire contraceptives but do not have access to them.

United Nations Development Programme Administrator Helen Clark pointed to a range of social, cultural, and economic factors preventing MDG Goal 5 from being achieved, including “gender inequality; poverty; poor or little protection of the human rights of women and girls; food insecurity and poor nutrition; and inadequate infrastructure and services, including lack of access to energy or to transport to health services.”

The need to address such structural factors was underscored in the U.N. System Task Team report to the secretary-general, titled, “Realizing the Future We Want for All.” According to the report:

The global development agenda should seek not only to address and monitor the elimination of specific gender gaps, but also to transform the structural factors that underpin the widespread persistence of gender inequalities, gender-based violence, discrimination and unequal development progress between women and men, girls and boys. The empowerment of women and girls and the protection of their rights should be centre-pieces of the post-2015 agenda.

The U.N. Secretary-General’s High-level Panel on Global Sustainability, co-chaired by the former Finland President Tarja Halonen and South Africa President Jacob Zuma, was meant to be one input feeding into various international bodies and forums, including the U.N. Conference on Sustainable Development, or Rio+20, and the United Nations Framework Convention on Climate Change, or UNFCCC, and the post-2015 development agenda. U.S. Ambassador to the United Nations Susan Rice was appointed to be the U.S. representative on the panel.

The panel’s 2012 report, “Resilient People, Resilient Planet: A Future Worth Choosing,” concluded that promoting human rights and advancing gender equality were fundamentals of development. According to the report:

Any serious shift towards sustainable development requires gender equality. Half of humankind’s collective intelligence and capacity is a resource we must nurture and develop, for the sake of multiple generations to come. The next increment of global growth could well come from the full economic empowerment of women.

The panel recommended that governments repeal discriminatory laws and reform institutions and cultural practices to ensure that women have equal access to jobs, markets, reproductive and health services, and property. It also recommended that women have an equal role in decision-making processes.

The June 2012 Rio+20 conference was aimed at renewing political commitment for sustainable development and addressing new and emerging challenges that had been identified since the first Rio+20 summit in 1992. The Rio+20 outcome document, “Realizing the Future We Want for All,” was adopted by the U.N. General Assembly in 2012 and highlighted the need to address the structural causes of poverty by addressing inequalities. The document notes:

Transformative change will require recognizing and tackling both manifested gaps and their structural causes, including discrimination and exclusion, widely faced by women and girls, persons with disabilities, older people and members of indigenous and minority groups.

Some of the key obstacles to women’s empowerment, as outlined in the document, are threats and acts of violence against women. In “The Future We Want,” the elimination of all forms of violence against women and girls is recognized as integral to development.

The prevention and reduction of all forms of violence and abuse—and protection against their specific manifestations, including trafficking in human beings, torture, organized crime, the press-ganging of children, drug-related criminality, sexual abuse and labour exploitation—should be at the heart of any agenda which fully recognizes the centrality of human security, both as a human rights imperative and as integral to development.

Michelle Bachelet, executive director of UN Women, speaking on gender equality and the post-2015 developmental framework at a conference in Dublin, Ireland, said, “There is no country in the world where women and girls live free of the fear of violence. No leader can claim: This is not happening in my backyard.” According to Bachelet, between 40 percent and 50 percent of women in the European Union report being sexual harassed at work. In some countries, up to 70 percent of women will suffer violence in their lives, and one in three women worldwide will experience sexual violence in their lifetime. “As long as women face violence and discrimination, our efforts to eradicate poverty, achieve equality, and advance human rights and democracy will not succeed,” said Bachelet.

The way forward

Because the Millennium Development Goals will expire in 2015, the United Nations has now begun the process of evaluating them and deciding whether to renew or rework them. After several reports were published on the current state of achieving the goals, U.N. Secretary-General Ban Ki-moon last July created a High-level Panel on the global development agenda for the period post-2015. The panel is tasked with providing recommendations on continuing the U.N. global development framework. The High-level Panel is being chaired by Liberia President Ellen Johnson Sirleaf, Indonesia President Susilo Bambang Yudhoyono, and U.K. Prime Minister David Cameron. The panel is comprised of 27 leaders from civil society, the private sector, and government.

To date, the panel has convened three times—September 2012 in New York at the opening of the U.N. General Assembly; November 2012 in the United Kingdom; and most recently in Monrovia, Liberia, in January 2013. The panel’s final report is expected to be released at the end of May 2013 at the conclusion of two more meetings—one in Indonesia at the end of March, and one final meeting in New York at U.N. headquarters.

The communiqué from the third panel meeting in Monrovia indicates that there is agreement among panelists that a development agenda should extend beyond economic growth to focus on equality, sustainability, and reaching populations that were left behind in the Millennium Development Goals. The communiqué emphasizes that any post-Millennium Development Goals global development agenda must include the empowerment of women and girls, the expansion of social protection schemes, and universal access to health care—including sexual and reproductive health. In addition, growth must be inclusive and accompanied by strong institutions and transparent government to protect rights. The next meeting of the High-level Panel will be in Bali, March 25–27, and will focus on methods of implementation.

Expectations for the panel giving due consideration to women’s issues runs high. President Sirleaf and another panel member Tawakkul Karman, a women’s rights activist, jointly received a Nobel Peace Prize in 2011 for their promotion of women’s rights and peace. President Sirleaf, a long-time champion of women’s rights, is the first democratically elected female president in Africa. Karman, who became the face of the 2011 uprising in Yemen as part of the Arab Spring uprisings, and is known as “mother revolution,” is at the forefront of the fight for democracy in Yemen.

Lifting the earnings of 1 billion people who currently live on less than $1.25 a day is a key part of addressing extreme poverty. But alleviating poverty among the most marginalized populations requires moving beyond traditional measures of gross domestic product and focusing on the roots of poverty from discrimination against marginalized populations to the poor’s lack of access to markets, property, and employment. John Podesta, a member of the U.N. High-level Panel on the post-2015 development agenda, as well as the founder and current Chair of the Center for American Progress, explained in a recent issue brief on inclusive economic growth that “Sustainable economic growth is not simply about increasing the size of national economies but about shaping enduring systems that respect the rights of individuals and give them the tools they need to help lift themselves out of poverty now and forever.”

Podesta prescribes an inclusive approach to economic development, one that combats discrimination, provides economic opportunities, and improves the infrastructure—access to energy, property rights, and employment—to allow individuals and families to thrive.

Of particular significance to women, Podesta points out that reproductive and sexual rights and land tenure property rights are two components of development. Only between 10 percent and 20 percent of women in developing countries have land rights, and women hold fewer assets and face more difficulty attaining credit. Yet according to the U.N. Food and Agriculture Organization, if women had the same access to land, technology, financial services, education, and markets as men, yields on women’s farms could increase from 20 percent to 30 percent, which would feed between 100 million and 150 million more people—children, women, and men who would otherwise go hungry.

A World Economic Forum report titled, “The Global Gender Gap Report 2011,” underscored the imperative of women’s empowerment for national prosperity:

Because women account for one-half of a country’s potential talent base, a nation’s competitiveness in the long term depends significantly on whether and how it educates and utilizes its women … in order to maximize competitiveness and development potential, each country should strive for gender equality—that is, should give women the same rights, responsibilities and opportunities as men.

Looking forward, there are a number of other intergovernmental processes and civil society engagement processes surrounding the post-2015 development agenda preparations, which will also eventually impact the outcome of these deliberations.

During the Rio+20 conference, world leaders agreed to a process to consider the creation of a set of companion Sustainable Development Goals, which will focus on priority areas for the achievement of sustainable development that were laid out in the outcome document—including gender equality and women’s empowerment. A U.N. Open Working Group of 30 representatives shared by 70 member states has been created and will seek to develop a proposal for Sustainable Development Goals, which “should be coherent with and integrated in the United Nations Development Agenda beyond 2015.”

There are a number of other relevant intergovernmental processes for the post-2015 development agenda from now until 2015, such as the 2015 World Conference on Disaster Reduction and the 20-year review of the Program of Action of the International Conference on Population and Development in 2014. In addition, world leaders and civil society are gathering at the 57th Session of the Commission of the Status of Women at U.N. headquarters in New York over the next two weeks to discuss how to eliminate and prevent all forms of violence against women and girls, which is this year’s priority theme in line with International Women’s Day. They will also assess progress on the Millennium Development Goals and key gender equality issues to be reflected in the post-2015 development agenda.

Besides these processes, the United Nations plans to garner input from a variety of stakeholders, including the private sector, philanthropic organizations, and citizens, as it formulates the post-2015 agenda. Thus far civil society has responded with thoughtful proposals outlining the need to focus on addressing underlying inequalities and how to avoid uneven results. For example, Save the Children’s vision for a post-2015 framework recommends zero-based goals to tackle persistent inequalities, and think tanks such as the Overseas Development Institute are offering similar approaches to ensure the next development approach reaches everyone.

Globally, significant economic, social, and cultural barriers remain that prevent women from participating in economic development, which hinders the broader efforts to combat poverty and pathways toward sustainable development. Further progress will require a sustained effort to ensure that women around the world have greater economic rights, including the right to own property, as well as security to ensure they are protected from violence. Establishing these conditions will hinge on international development processes making women’s empowerment and gender equality pivotal to their efforts.

Rebecca Lefton is a Senior Policy Analyst working on international climate policy at the Center for American Progress.

SOURCE: AP/J. Scott Applewhite

From left, Sen. Jeanne Shaheen (D-NH), Sen. Dianne Feinstein (D-CA), and Sen. Patty Murray (D-WA) talk to reporters about the reauthorization of the Violence Against Women Act that was passed originally in 1994, Wednesday, April 18, 2012, on Capitol Hill in Washington.

Americans across the country are bracing for the impact of the sequester, the automatic across-the-board spending cuts to domestic programs—including vital human-needs services—set for this Friday, March 1. The nation faces dire consequences should these cuts take effect, but it’s even worse for low-income women and their families suffering from domestic violence.

Poor women and their families are facing a super storm of grim outcomes. Not only will the severe cuts to critical domestic-violence, sexual-assault, and human-needs services devastate low-income victims and the providers that serve them and their families, but the reauthorization of the Violence Against Women Act also remains held up in Congress after its expiration more than a year ago. This lack of needed legislation combined with severe funding cuts will seriously undermine the support services and assistance from law enforcement that low-income women rely on to escape abusive situations, protect their families, and seek justice.

This is particularly troubling because low-income women are uniquely at risk for domestic violence. Though women of all income levels can experience domestic violence, women who live in economically distressed households and neighborhoods are more likely to experience domestic violence. Women without their own financial resources or who are economically dependent on their abuser are more likely to stay with their abuser or return to their abuser if they have already left, and they are less likely to get a restraining order against their abuser. This situation leaves low-income women trapped by their lack of financial resources, a circumstance that is often exploited by abusers to keep these women and their children in a cycle of violence. To make matters worse, children who witness domestic violence are more likely to perform poorly in school, experience behavioral problems, and develop longer-term problems such as depression and a tolerance for violence in relationships.

The House continues to drag its feet on the Violence Against Women Act

This Thursday the House of Representatives will vote again on reauthorizing the long-stalled Violence Against Women Act. Originally enacted in 1994, and subsequently reauthorized in 2000 and 2005, the Violence Against Women Act was the first comprehensive effort in our country to tackle domestic violence and provide new law-enforcement tools and support services to victims. The law provided programs for violence prevention, investigations, and prosecutions. It also provided new service resources for victims that are particularly important to low-income women, including court-appointed special advocates, a national domestic-violence hotline, services for runaway youth, new funding for domestic-violence shelters, and programs for battered immigrant women, Native American women, and other underserved populations.

Because the need was so great, the Violence Against Women Act sailed through Congress three times with overwhelming bipartisan support—until now. For the first time in its history, the legislation failed to make it through Congress and to the president’s desk. Why? House Republican leadership dug in its heels and refused to include new protections for Native American women, gay and transgender individuals, and immigrant women who were included in the Senate version of the bill that passed with a rare bipartisan supermajority of 68 senators, including the affirmative vote of every female member.

During this Congress, the Senate fast-tracked a nearly identical bill and passed it with even stronger support—78 votes to 22 votes. In a move even more cynical than before, House leadership proposed a watered-down alternative bill that fully stripped the gay and transgender provisions and added a loophole—essentially a “get out of jail” toolkit for non-Native men who abuse Native women. But due to this partisan hardline position, 19 Republican House members are now standing up to House leadership demanding the passage of a fully inclusive Violence Against Women Act similar to the Senate version. It now seems more promising that Congress will finally do the right thing and get a bill to the president’s desk.

The ability to call a national hotline for support, escape a violent spouse, protect a sexually abused child, or be represented properly in court without an abuser’s interference—all of these services are in danger without the bill’s reauthorization. The anticipated new version of the Violence Against Women Act would even expand housing support, which is critical considering that violence against women is one of the primary causes of women’s homelessness. These housing protections are crucial and are often the primary pathways out of violence for low-income women who lack economic independence from their abusers.

Sequestration will devastate low-income victims of domestic violence and their children

The still uncertain reauthorization of the Violence Against Women Act is only one of the major ways in which low-income victims of domestic violence are in danger. Current funding for vital domestic-violence and sexual-abuse programs, as well as other federal programs that support victims of domestic abuse, are also under threat due to sequestration.

If sequestration goes into effect, funding for the Violence Against Women Act could be slashed by more than $20 million, preventing nearly 36,000 victims of violence from obtaining shelter, legal assistance, and services for their children. The primary funding stream for domestic-violence shelters, the Family Violence Prevention Services fund, may see as much as $9 million cut from its budget, reducing services to as many as 113,000 victims. These cuts would come at a time when domestic-violence centers that provide much-needed assistance are already scrambling. Florida, for instance, may see a cut in its STOP Violence Against Women Program of more than $400,000, potentially leaving 1,500 victims in the state without services.

Other federal programs that support pathways to economic independence for low-income women are also threatened by sequestration. According to the Department of Health and Human Services, child care assistance—which eliminates a major barrier to work for low-income women and provides social and emotional development services to low-income children—would be slashed under sequestration, resulting in more than 30,000 children losing access to these vital subsidies. And more than 600,000 people would be cut from the Special Supplemental Nutrition Assistance Program for Women, Infants, and Children, or WIC, an essential program that provides low-income expectant mothers and their infants with the healthy food, nutrition, and care they need during this critical phase of their lives. These and other federal programs provide women and their children with the support they need to escape violent situations.

The bottom line

No woman should be forced to stay in a violent situation because our country lacks the political will to provide them with the resources that they desperately need to protect themselves and their children.

Failing to reauthorize the Violence Against Women Act and allowing sequestration to take effect will have real consequences for low-income victims of domestic violence and their families. We know programs funded by the Violence Against Women Act work. These important programs save lives and provide women with the services they need to escape abuse. Tomorrow the House should vote down their partisan bill and pass the strongly bipartisan Senate bill.

With International Women’s Day approaching on March 8, there will be tremendous worldwide discussion about violence against women. The United States should take the opportunity to look back on what it has done in the past to improve the lives of women and children caught in the cycle of domestic violence—and determine what more can be done to put an end to domestic violence once and for all. We can continue toward that goal by making sure that the sequester and the stalled Violence Against Women Act do not further shrink the programs that provide low-income women and their children with pathways to free them from violence.

Erik Stegman is the Manager of the Half in Ten Education Fund at the Center for American Progress. Katie Wright is a Research Associate at the Center.

SOURCE: AP/Danny Johnston

A sign promoting loans for instant tax refunds is displayed in a window in Little Rock, Arkansas, Tuesday, January 26, 2010.

Endnotes and citations are available in the PDF version of this issue brief.

For many Americans, tax time is also savings time—whether a family is working with an accountant to maximize deductions or debating how to use a tax refund.

This should not come as a surprise. The tax code encourages people to save through billions of dollars in tax incentives for homeownership, retirement, and other goals, including the Saver’s Credit, which rewards low- and moderate-income families who make contributions to retirement accounts. Yet the vast majority of benefits from retirement-tax incentives—about 80 percent—go to the top 20 percent of income earners. Some have suggested, however, that savings incentives help low- and moderate-income families increase how much they save—which generates net new savings—while higher-income earners are more likely to simply move existing savings into tax-advantaged accounts.

More can be done to help working families build wealth so that they can better deal with emergencies. In 2009 about 27 percent of all American households—more than 80 million Americans—were considered “asset poor” according to the Corporation for Enterprise Development. Asset poverty means that these households lack sufficient resources to get by at the poverty line for three months in case of job loss or other loss of income. Excluding houses, cars, and other types of assets that are not typically liquidated in a crisis, however, this number increases to 43 percent of all households. This is nearly three times the national poverty rate of 15 percent.

Similarly, roughly half of all Americans—at all income levels—would “probably not” or “certainly not” be able to come up with $2,000 in 30 days to deal with an emergency, according to a recent nationwide survey by the market research firm TNS Global. This was true not only for about three-quarters of those with incomes of less than $20,000 per year, but also for about 20 percent of respondents earning more than $100,000 annually.

In short, many Americans who may not technically be considered “in poverty” still run the risk of financial ruin. Having even small amounts of savings, however, can help families weather their crises. Without savings, families may seek out predatory loans and fall deeper into debt, or they may become more dependent on government assistance. Savings are also key to planning for the future, whether buying a house or a car, preparing for college expenses, or thinking about a secure retirement.

Tax refunds can help provide a savings opportunity—a “savable moment”—where refund money can be set aside to meet future financial needs. More than 110 million tax filers—77 percent of all American households who file taxes—received a federal income-tax refund in 2010. This includes 76 million tax filers who earned less than $50,000 a year—an average refund of more than $2,300 per filer in this income group. Many tax filers overwithhold during the year—in other words, they have more money taken out of their paychecks than is actually necessary to meet their tax liability. Some economists suggest that this is because taxpayers have not properly filled out their tax forms at work or do not adjust them as circumstances change. But taxpayers may also be attracted to receiving a refund instead of having to worry about paying their taxes in April.

For about 27 million low- and moderate-income tax filers—mostly families with children—this tax refund moment is made more attractive by policies such as the earned income tax credit, or EITC. The credit, which was first enacted in 1975 and expanded in the 1990s, provides families with modest incomes—less than $36,000 to $50,000 per year, depending on family size—with a credit ranging from $3,000 to more than $5,000. Most importantly, the earned income tax credit is refundable: If the credit is greater than the tax filer’s federal income-tax liability—the filer’s obligation to the Internal Revenue Service—the IRS refunds the difference. Since low-income tax filers may not have an income-tax liability, this can provide a sizable financial boost to these families.

Behaviorally, “mental accounting” suggests that larger, less common payments like bonuses and tax refunds are treated differently from regular, small amounts like paychecks. Tax refunds for EITC filers are a prime case. In one study of EITC recipients in two cities, 84 percent used part of the tax refund to pay off debt or cover bills. Sixty-one percent used a portion of their refunds on child-related expenses, and one-third used at least part of their refunds to purchase or repair a car. But nearly half—47 percent—also put aside part of their refund for goals such as a security deposit on an apartment, a down payment on a home, or to cover emergencies. The tax refund moment is an opportunity to put aside hundreds of dollars that may have been more difficult to save during the year.

But to make the most of tax time, savings is only half the battle. Fees for tax preparation and expensive financial products such as refund-anticipation checks—temporary holding accounts for tax-refund dollars—can take hundreds of dollars out of a working family’s tax refund. The National Consumer Law Center reported that in 2008 more than $1.5 billion in EITC payments went toward tax-preparation and refund-anticipation fees. What’s more, some tax refunds are loaded onto prepaid cards that may charge fees just to access refund dollars.

At the same time, some progress has already been made to make tax time a better wealth-building opportunity for working families. In recent years the Internal Revenue Service has made it possible for consumers to automatically split tax refunds into multiple bank accounts, and it has gone after some of the most nefarious and costly tax-refund loans. Pilot programs across the country have also demonstrated that matching incentives and creative messaging can help increase savings rates.

Congress should build upon these initiatives to help working families save at tax time. First, tax reform should create a stronger savings incentive—a refundable, matching Saver’s Credit—and make it available to more low- and moderate-income families. Congress should also make sure that savings opportunities—such as savings bonds and safe, affordable accounts—are available to all tax filers, and it should support free and low-cost tax-preparation opportunities such as Volunteer Income Tax Assistance sites, which saved families receiving the earned income tax credit an estimated $90 million in tax-preparation fees in 2011.

Other government actors should also take action. The Internal Revenue Service and the Consumer Financial Protection Bureau should continue to monitor financial products targeted to consumers with tax refunds, such as refund-anticipation checks and prepaid cards. And state lawmakers should consider whether asset tests, which force agencies to comb through all financial aspects of potential public beneficiaries’ lives—from bank accounts to the values of used cars to life insurance policies to, in some cases, prepaid burial plots—are discouraging families from saving because saving would threaten their access to public assistance. Encouraging savings could actually reduce dependency.

This issue brief looks at some of the problems low-income families face in building wealth at tax time, the pilot programs and policy developments that have been able to potentially increase savings, and current proposals to make tax-time savings more popular and effective.

Problems

The Saver’s Credit has limited reach

To encourage savings by low-income families, Congress passed the Saver’s Credit in 2001, which rewards saving in employer-sponsored retirement plans like 401(k)s as well as Individual Retirement Accounts, or IRAs. For single filers earning less than $28,750 and joint filers earning less than $57,500 in 2012, the Saver’s Credit is a tax credit of up to 50 percent of the amount saved, with a maximum of up to $2,000 in savings.

In 2010 more than 91 million tax filers reported annual incomes of less than $50,000. Only 6.1 million tax filers claimed the Saver’s Credit—a small fraction of all low- and moderate-income tax filers. One of the main obstacles to broader reach is that the credit is nonrefundable. Unlike the earned income tax credit, the Saver’s Credit cannot exceed the tax filer’s federal tax obligation. As a result, tax filers who pay little or no federal income tax—such as many low-income workers—are generally not able to benefit from it. The credit also only applies to contributions for certain types of retirement accounts, such as 401(k)s and IRAs. Low-income savers may not be familiar with or have access to these accounts. And as income increases, the credit drops off very quickly: It starts at 50 percent for the lowest-income filers, before phasing down to 20 percent for joint filers earning more than $34,500 and 10 percent for joint filers earning more than $37,500. (see Figure 1)

The Office of Management and Budget estimates that the Saver’s Credit cost the government slightly more than $1 billion in foregone revenue in 2011. This is a tiny fraction of an estimated $142 billion in retirement-tax expenditures—dollars that would otherwise be taxed but are not because of credits in the tax code. The vast majority of retirement-tax expenditures help higher-income earners, who also benefit more from tax-advantaged saving because higher tax brackets reduce tax liability more for each dollar saved.

Potential savers have a “leaky bucket,” and may have disincentives to save

Having a tax refund is one thing, but committing it toward saving is another. This is known as the “leaky bucket” problem: With a large refund, it may be tempting to spend the money rather than put a portion of it aside. Knowing that a windfall is coming, tax filers may have already decided to use their tax refunds for a specific purpose, such as paying off debt or taking care of pressing household needs. Looking at planned and actual uses of low-income families’ tax refunds, researchers found that 69 percent of tax filers intended to save a portion of their refunds when they filed their taxes, but only 47 percent actually reported doing so six months later. Pressing financial needs may threaten a savings goal.

Moreover, many states create a disincentive to save by disqualifying people from welfare benefits or food assistance if they exceed certain “asset limits.” If a tax refund is saved rather than spent, in some cases it may trigger these limits, which restrict how much public-benefit recipients can have in their bank accounts as well as other types of holdings, including vehicles, property, and even burial plots. This means that while spending a tax refund has no penalty, potentially saving part of it in a bank account for future needs can threaten access to benefits. Policies vary widely across states and programs, but even when these limits do not apply—or are very high—the belief that families are punished for having savings can discourage public-benefit recipients from putting tax refunds into a bank account.

Even maximized refunds can be eroded by fees

The National Consumer Law Center estimated that of the $49 billion in earned income tax credits in 2008, more than $1.5 billion went toward refund-anticipation and tax-preparation fees. In other words, 3 percent of EITC dollars—government funds designed to help cash-strapped families make ends meet—went directly into tax preparers’ pockets, not to the recipients. Nearly $1 billion went to tax-preparation fees alone. Refund-anticipation loans and refund-anticipation checks may give consumers access to their expected tax-refund dollars faster than they would otherwise be available, but at a high cost. In 2008 the typical refund-anticipation loan cost about $65—in addition to tax-preparation fees—to receive cash one to two weeks before the refund would arrive from the Internal Revenue Service. Some, however, could cost more than $100. For tax filers without bank accounts, a refund-anticipation check offers a temporary account for receiving tax refunds that is faster than waiting for a paper check, and automatically deducts tax-preparation fees, at the cost of $30 or more. But for tax filers with bank accounts, refund-anticipation checks deliver refunds no faster than they would otherwise be directly deposited.

In 2010 the average tax refund for filers earning between $10,000 and $50,000 was more than $2,500. Overall, $300 or more of the tax refund could go to these fees—while low-income filers using free options such as Volunteer Income Tax Assistance sites or Free File software could receive their refunds in one to two weeks by direct deposit. Yet roughly 20 million tax filers in 2008 used a refund-anticipation loan or refund-anticipation check, including roughly half of all filers claiming the earned income tax credit. In fact, a 2008 Government Accountability Office report found that the refund-anticipation loan market was so lucrative that in some cases, car dealers and shoe stores would offer tax-preparation services in order to make the loans and encourage the tax filers to use their loan proceeds to buy goods.

Refund-anticipation checks still exist today, but recent actions by banking regulators and the Internal Revenue Service have greatly cracked down on banks offering refund-anticipation loans. But some nonbank actors, such as check cashers and payday lenders, are starting to offer these services. And some tax preparers have found another opportunity to gain revenue from low-income families’ tax refunds—high-cost prepaid cards. Prepaid cards can be a valuable alternative to bank accounts, since they generally cannot be overspent and are an effective substitute for cash. While innovative, some card offers may be far better than others that have high initial opening or monthly maintenance fees.

Progress

The Internal Revenue Service has taken steps to make savings easier

In 2007 the Internal Revenue Service made available a new tool to facilitate savings through Form 8888, which enables a tax refund to be split into multiple accounts. This change addresses the “leaky bucket” issue, in which a taxpayer might intend to save part of a tax refund but end up spending the entire refund instead. A tax filer receiving a $1,000 refund, for example, can have $500 automatically deposited in a checking account and the other $500 deposited in a savings account. Prior to this change, the same taxpayer would have to choose one account or the other in which to deposit the entire amount.

Since 2010 Form 8888 has allowed tax filers to use part of their refund to buy U.S. savings bonds in $50 denominations as well. This is not the first time the IRS has promoted savings bonds: From 1962 to 1968 tax refunds were available either as a check or as a savings bond. As of January 2012 this is the only remaining way to buy paper savings bonds; the U.S. Treasury now almost exclusively sells them electronically. Yet savings bonds remain attractive to some consumers who may not have a bank account or home Internet access, leading to controversy over the move away from paper bonds.

The IRS has also helped rein in high-cost refund-anticipation loans. Tax preparers making these loans face some risk that a portion of the tax refund will be garnished to pay for outstanding federal debts. In the early 1990s and again from 1999 onward, the IRS provided a “debt indicator” that helped tax preparers identify if refunds were likely to be recaptured. Starting in the late 2000s, banking regulators informed sponsoring banks that the loans were too risky, and in 2011 an IRS administrative change eliminating this indicator made it difficult for tax preparers to determine the risk of these loans. As a result, refund-anticipation loans have largely disappeared from mainstream banking actors, although some nonbanks continue to make these loans.

Public and private actors have demonstrated new ways to boost savings

Several pilot programs around the country have looked at the role of matching funds as a behavioral “nudge” and more popular alternative to tax credits. Matching funds are more concrete than credits—and demonstrations have shown that they may help boost savings by low- and moderate-income families at tax time.

In 2005 14,000 low-income tax filers at H&R Block offices in the St. Louis metropolitan area were randomly offered a matching contribution if they opened an Express IRA—the retirement savings account that H&R Block marketed at the time. Of those who were offered no match at all, 3 percent still decided to open an account and save. Of those who were offered a 20 percent match, 8 percent opened an account, and of those who were offered a 50 percent match, 14 percent opened an account. In other words, the match made tax filers between two and five times as likely to save. Amounts saved also increased dramatically in the presence of a match, with savers offered a match contributing four to eight times as much as those not offered a match.

In 2008 New York City launched SaveNYC, a pilot program in collaboration with select free Volunteer Income Tax Assistance sites, which matched 50 cents of every dollar saved, up to a maximum of $500 in matching funds—provided that the savings was not touched for one year. Roughly 9 percent of eligible tax filers participated from 2008 to 2010, even though matching dollars were limited. Over this three-year period, more than 2,200 people chose to open savings accounts through SaveNYC, collectively saving more than $1.7 million. Eighty-one percent kept their savings for the full year, yielding a total of $2.3 million in savings, including matching funds. In 2010, with support from the U.S. Social Innovation Fund, the pilot program was expanded to Newark, New Jersey; Tulsa, Oklahoma; and San Antonio, Texas, under the name SaveUSA. The evaluation is still underway, but during its first year, 73 percent of participants across the four cities were able to open a savings account and keep their savings untouched.

A new savings pilot program called Refund2Savings also looks at the role of messaging and behavioral defaults. Researchers at Duke University and Washington University in St. Louis teamed up with tax preparer Intuit to test the potential for marketing savings through split refunds. Launched in 2012, the Refund2Savings demonstration reached more than 80,000 low-income tax filers who used Intuit’s TurboTax Free File software.

After completing their tax returns, filers saw a motivational prompt, such as “Would you like to save for a rainy day?” After the prompt, they may also have viewed a suggested tax refund divided up into checking and savings amounts, such as 75 percent in checking and 25 percent in savings, or vice versa. Those behind the pilot program hope to reveal how likely tax filers are to save based on different default amounts and savings messages. While official findings have not yet been released, providing a default savings suggestion has shown greater savings than the study’s control group, in which no motivational prompt or savings suggestion was given. In its 2013 pilot, Refund2Savings will also be offering savings bonds as an alternative to accounts.

Tax preparers have an interest in these types of activities because they ultimately add value for clients who have a number of tax filing options. Intuit has expressed interest in the Refund2Savings pilot program because it is “a unique opportunity to build savings while filing a tax return, making saving easier and, in turn, generating customer satisfaction and loyalty.” Helping working families save at tax time can be attractive to both the preparer and the client.

Common-sense Saver’s Credit reforms have been proposed

Recognizing the limitations of the Saver’s Credit, President Barack Obama’s 2011 budget included a proposal to expand the credit to more low- and moderate-income families. The proposal would increase eligibility to joint filers earning as much as $85,000, and would convert the current nonrefundable credit into a refundable credit.

Along similar lines, the Aspen Institute’s Initiative on Financial Security recently proposed the Freedom Savings Credit. The Freedom Credit would also extend the Saver’s Credit to joint filers earning up to $85,000, make it refundable, and eliminate the “cliffs” in the existing credit so that a much larger share of tax filers would be able to receive the maximum amount of savings. Most importantly, the newly refundable credit would be automatically deposited into the tax filer’s retirement account—effectively turning the credit into a matching fund. This credit would build opportunity for sizable retirement savings; matching the savings of an individual putting aside $13 per week, over 30 years the portfolio could grow to as much as $150,000 based on a target-date investment strategy. The annual cost to the government of the Freedom Savings Credit is approximately $3 billion.

The New America Foundation has taken a somewhat more ambitious approach. Its Financial Security Credit proposal would provide a dollar-for-dollar government match on savings up to $500 for low- and moderate-income tax filers. Most notably, the match would be available to savings vehicles other than retirement accounts. The match would include tax-advantaged education savings accounts such as Section 529 higher-education plans and Coverdell accounts, as well as U.S. savings bonds and certificates of deposit, or CDs. Savers would also be able to open an account directly on the tax form if they do not already have one.

Under the Financial Security Credit proposal, the match would be available to tax filers earning up to 120 percent of the earned income tax credit’s eligibility level—for example, approximately $44,000 in 2012 for a single parent with one child, or $56,000 for a married couple with two children. By rewarding a wide range of savings behaviors, the proposal would facilitate savings for different life goals at an estimated cost to the government of $4 billion per year.

Members of Congress have been receptive to the idea of Saver’s Credit reform. In 2008 Sen. Robert Menendez (D-NJ) introduced the Saver’s Bonus Act (S. 3372), which largely follows the Financial Security Credit proposal. And in 2012 Rep. Richard Neal (D-MA) proposed a version of the Freedom Savings Credit, entitled the Savings for American Families’ Future Act (H.R. 6472). Unfortunately, neither of these bills made it out of committee.

All of these proposals have a modest cost in the overall government framework of more than $140 billion in annual tax expenditures for retirement savings. They address the existing Saver’s Credit’s limitations and build on research that shows how to generate new savings—not just transitions from one type of account to another.

Recommendations

Pilot programs by local governments and tax preparers have made it easier for some working families to save at tax time through matching incentives and behavioral nudges. The Internal Revenue Service has also played an important role by enabling automatic refund splitting and greatly reducing the presence of costly refund-anticipation loans. But making tax-time savings work effectively for more low- and moderate-income families will require additional action by Congress and the executive branch.

1. As part of tax reform, Congress should convert the Saver’s Credit into a refundable credit that is deposited directly to the tax filer’s account

As a refundable credit, the Saver’s Credit would reach low-income workers who would otherwise be unable to claim the credit because they may not have a tax liability. And depositing the credit into the tax filer’s account reduces the possibility of leakage and effectively matches the tax filer’s savings. This not only encourages working families to save—whether at tax time or throughout the year—but it also allows savings contributions to increase more quickly.

A proposal to make the Saver’s Credit refundable was included in President Obama’s fiscal year 2011 budget. The president’s budget proposal also recommended extending the credit to joint tax filers who earn up to $85,000 per year and eliminating cliffs in the credit as it currently stands so that more tax filers would be able to receive the maximum match. These changes would cost the government approximately $3 billion per year out of the more than $140 billion in tax expenditures for retirement—a modest investment.

Policymakers should also consider what types of accounts should be eligible for the Saver’s Credit. Some have proposed expanding eligibility for the credit to include not only retirement accounts but also education savings in Section 529 higher-education plans, Coverdell accounts, savings bonds and CDs. They argue that retirement is not an attractive savings goal for low-income families and that savings for other life goals may be more appealing. But regardless of whether a converted Saver’s Credit can be used only for retirement accounts or for broader savings opportunities, reforming the credit will make savings more attractive to millions of low- and moderate-income families.

2. Consumers should have access to a savings vehicle at tax time even if they do not already have a savings account

Consumers expecting a tax refund should have the ability to automatically save a portion of their refund before they have an opportunity to spend it. Tax filers who already have checking and savings accounts can automatically split their refunds. And some tax preparers, such as Volunteer Income Tax Assistance sites, may have banks or credit unions on hand to open new savings accounts for filers who may not have them. But not all tax filers currently have the ability to open an account.

The Internal Revenue Service has enabled tax filers to purchase U.S. savings bonds at tax time, and it should continue to do so. Savings bonds are attractive to consumers who may not have or want other savings vehicles. But other types of accounts should be made available to consumers at tax time as well. One possible approach, as advocated by the New America Foundation as part of their Financial Security Credit proposal, would be for the Treasury Department to allow banks to competitively bid for the opportunity to offer savings accounts for tax refunds. All savings and investment vehicles that may receive federal tax refunds must be safe and affordable for consumers.

3. Congress should support free and low-cost tax preparation services, such as Volunteer Income Tax Assistance sites

The president’s budget for fiscal year 2013 recommended appropriating $12 million to matching grants for these nonprofit tax preparation sites, which prepare millions of tax returns for filers with an average adjusted gross income of $21,000. Given that low-income tax filers may lose several hundred dollars of their refunds to tax-preparation fees, these volunteer-staffed sites help consumers keep their maximum refund—dollars that can then be either saved or spent.

Other opportunities can also reduce the costs of tax preparation. An improved online free-file program could also help broaden outreach to working families. As demonstrated by the Refund2Savings pilot, this may present a low-cost savings opportunity. Paid preparers, too, may wish to seek out lower-cost opportunities. All tax preparers have an important role to play in building financial stability at tax time, but a balance must be struck between reasonable tax-preparation costs and fees and practices that ultimately erode the value of the tax refund.

4. The IRS and the Consumer Financial Protection Bureau should continue to monitor tax-refund financial products such as refund-anticipation checks and prepaid cards

While high-cost refund-anticipation loans have largely disappeared from the landscape as a result of IRS actions and the activity of banking regulators, refund-anticipation checks remain a very expensive way to receive a refund. Moreover, prepaid cards that receive government payments must already meet many stringent requirements, but some cards may still have high fees depending on how the card is used. Again, dollars that are not directed toward fees can be better spent on necessities or saved for a rainy day.

5. Federal and state lawmakers should ensure that asset limits in state programs do not threaten small amounts of savings

In some states, holding as little as $1,000 in savings can disqualify someone from receiving public benefits. While this may seem like an attempt to steer benefits toward the truly needy, it also discourages those receiving public assistance from attempting to save and move out of poverty. State human-services agencies must remain aware of the power of asset limits to discourage savings. Even after policies change, perceptions may remain, as public assistance recipients continue to believe that their benefits are threatened if they attempt to save money.

Conclusion

Tax time presents an opportunity for low- and moderate-income families to put a portion of their tax refunds toward emergencies and save it for future goals. While the current Saver’s Credit seeks to reward savings, its limitations mean that many of the families intended to benefit from the credit ultimately do not. But innovations by the Internal Revenue Service, like Form 8888, have made it easier for families to save, and cracking down on refund-anticipation loans has helped millions of families keep more of their tax refunds.

When Congress considers tax reform, it should look to facilitate tax expenditures that can ultimately change behavior, such as matched savings for working families. Stronger supports for tax-time savings can make American households more financially capable to deal with emergencies and plan for the future.

Joe Valenti is the Director of Asset Building at the Center for American Progress.