Fighting Poverty to Stabilize the Economy

Hearing focuses on why a new stimulus must help Americans work their way out of poverty in order to stabilize the economy, writes Kate Bell.

The Joint Economic Committee held a hearing yesterday in front of a packed audience on how an economic stimulus package can be constructed so that poor and middle-income families will get the help they need.

Chair Congresswoman Carolyn Maloney (D-NY) opened the meeting thanking Senator Edward Kennedy (D-MA) for having requested the hearing, before drawing attention to the current economic crisis. The crisis on Wall Street might seem distant from poverty concerns, but the fate of the economy is clearly linked with poverty levels, particularly when unemployment rises. We need economic solutions that help every day Americans—not just Wall Street.

Poverty has risen in recent years. Dr. Rebecca Blank of the Brookings Institute pointed, for example, to recently released 2007 poverty figures showing that poverty rose since 2006, and figures for 2008 are likely to be even worse.

The current crisis should signal to lawmakers that we need to place greater focus on efforts to tackle poverty. Angela Glover Blackwell, CEO of Policylink, and chair of the Center for American Progress’s own task force on poverty, emphasized the importance of the goal to cut poverty in half in 10 years. Explaining the recommendations in the task force’s report, she emphasized the principles on which the report is based: promoting decent work, providing opportunity for all, ensuring economic security, and helping people to build wealth.

These goals are achievable. Experts at the hearing proposed a variety of solutions for helping American families and tackling poverty. Rep. Maloney drew attention to the British government’s commitment to halve child poverty in 10 years and end it in a generation. “Parenthood should not equal poverty,” she said, arguing for action to increase the Earned Income Tax Credit, raise the national minimum wage, guarantee childcare assistance, and encourage flexible working.

Mayor David N. Cicilline of Providence, Rhode Island, stressed the importance of cities to the nation’s economic prosperity. Cities are making a comeback as centers of growth and innovation, he said, but promoting economic mobility will be key to ensuring that cities can build on this prosperity. Poverty, he argued, should be seen as a war for opportunity.

John W. Edwards, Chairman of the Community Action Partnership and Executive Director of the Northeast Florida Community Action Agency, brought the discussion around to current, urgent poverty issues. He described the changing face of poverty in Florida. More and more “traditional” families with two working parents and children are coming to his agency for help as the economy spirals downward, he noted, and many of them are seeking basic assistance. Edwards stressed the need for extensions to the Earned Income Tax Credit, and the Low Income Home Energy Assistance Program, which helps with heating costs.

Blank also stressed the need for a stimulus package to include an increase in food stamp benefits and LIHEAP to help families facing high heating costs this winter. Mayor Cicilline seconded the appeal for LIHEAP expansions, and emphasized the importance of improvements in infrastructure both to the stimulus program and rebuilding cities. Angela Glover Blackwell argued that all such policies should be thinking about how best to tackle poverty.

Panelists also largely agreed that a stimulus will need to include provisions to help wages and make work pay. Proposed solutions included raising the national minimum wage, expanding the Earned Income Tax Credit, and extending unemployment insurance. But most important in terms of encouraging work will be ensuring that people have jobs to go to—and this will mean stabilizing the economy.

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