Ending Poverty at Home

Harry J. Holzer Testifies to House Ways and Means Committee

House Ways and Means Committee opens discussion about the economic costs of poverty on the heels of a new report from CAP.

Tuesday night in his State of the Union address, President Bush talked about America’s obligation to end poverty worldwide. Noticeably absent was any call to end poverty at home, but an impatient Congress is taking the lead. The House Ways and Means Committee yesterday morning began a long overdue conversation about this critical national issue in a hearing on the economic and societal costs of poverty.

The hearing coincided with the release of a new report from the Center for American Progress that details the economic costs of poverty in America. Harry J. Holzer, lead author of the report and witness at the hearing, makes the case that reducing poverty is an economic issue as well as a moral one. Data suggests that the annual costs to the U.S. economy associated with childhood poverty total about $500B per year, or the equivalent of nearly four percent of GDP.

Holzer explained to the Committee that “the high cost of childhood poverty to the U.S. suggests that investing significant resources in poverty reduction might be more cost-effective over time than we previously thought.”

Holzer presented a range of options that have the potential to reduce poverty in cost-effective ways, including universal pre-kindergarten programs, expanding the Earned Income Tax Credit and other income supports for the working poor, implementing better job training for poor adults, raising the minimum wage and allowing for more collective bargaining, revitalizing low-income neighborhoods and housing mobility, and promoting marriage and faith-based initiatives.

Ron Haskins, a senior fellow at the Brookings Institution and witness before the committee, emphasized the individual’s responsibility in marriage, work, and education as keys to reducing poverty. He also suggested that Congress will play a vital role in enacting programs to reduce poverty, and that poverty reduction should not be left only to market forces.

When the Republican members agreed with Haskins’ assessment that encouraging marriage would play a major role in reducing poverty, Holzer reminded them that it’s “hard to raise marriage rates dramatically” without helping to increase marriageability, which might include programs to help young men secure jobs and increase earnings.

After hearing a summary of each witness’ official testimony, Committee Chairman Charlie Rangel (D-NY) challenged Congress to be fiscally responsible while also making investments for the future. “One size doesn’t fit all” when it comes to reducing poverty, he said, alluding to a desire for solutions tailored to individual populations and communities.

“Poverty isn’t a Democratic or Republican issue,” said Jim McDermott (D-WA). He’s right. Poverty in America is an issue we all need to address. President Bush can talk about ending poverty worldwide, but it’s about time he showed as much concern for poverty at home.

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