Conservatives are up in arms over the fairness of increasing taxes on those making more than $250,000 a year. They should spare more than a thought for those who did not prosper so fabulously over most of this decade and then got whipsawed by the Bush recession that began in December 2007. President Obama certainly is.
According to the most recent census count, there are 37.3 million Americans living in poverty, all of whom could certainly benefit from the “helping hand up” offered by the Obama administration’s budget and appropriations proposals for fiscal year 2010, which begins next October. These investments to help those who want to help themselves—and especially those who only through the accident of birth will now face even greater deprivation amid a recession—at a time when our economy will still be struggling to grow once again.
Let’s first consider the basic needs of Americans in poverty. Rising unemployment and underemployment are making it difficult for many families struggling to provide for their most basic needs—food, heat, and shelter. In recent months, government agencies have reported spikes in requests for food assistance, energy assistance, and homeless services. Some of these immediate needs are addressed in the recently enacted American Recovery and Reinvestment Act, which is designed to help jumpstart the economy by providing government assistance those who both need it and will spend it quickly. But longer-term structural issues in our economy that help perpetuate poverty remain to be addressed.
President Obama’s budget outline identifies these long-term problems and proposes strong remedies for the basic needs of food, energy and shelter. The administration’s 2010 budget reiterates a commitment to end childhood hunger by 2015. It proposes an additional $1 billion to improve child nutrition programs such as school lunches and the Women, Infants, and Children, or WIC program, which provides food assistance to pregnant women and young children. The president also signaled support for the federal food stamp program, aiming to increase participation of underserved seniors.
The new budget blueprint would also maintain increased funding levels—currently $5 billion for 2009—for the Weatherization Assistance Program, or WAP, which lowers home energy bills through energy efficiency retrofits and repairs while creating new jobs. It would also elevate funding for the Low Income Home Energy Assistance Program to $3.2 billion, which is higher than the historical average for the LIHEAP program.
Furthermore, President Obama proposes a bold shift in energy policy by developing a carbon cap-and-trade system that would both address climate change and generate new revenues by establishing a price for polluting. This may increase energy costs for consumers. However, the president proposes to make the Making Work Pay tax credit of $400 to $800 dollars a year in the Recovery and Reinvestment Act permanent. The credit, along with increased expenditures for WAP and LIHEAP, will help low-income families manage new energy costs.
The budget would also provide $1 billion dollars for an Affordable Housing Trust Fund, which is designed to develop and preserve affordable housing. These funds are a step in the right direction, but with housing prices falling, rents climbing, and unemployment and underemployment also sure to rise, it is important to keep monitoring homelessness rates to see if additional funding is needed for emergency shelters. This is not mentioned in the budget blueprint, but will be included in the detailed White House budget that is scheduled to be released in March or April.
A particular highlight of the Obama administration’s fight to end poverty is this—the new budget blueprint seeks to expand current Veteran Affairs Services by extending more aid to veterans at risk of homelessness. According to the most recent data, which was produced in 2005, nearly 400,000 veterans experience homelessness at some point during the year. The story of the full impact of the current wars in Iraq and Afghanistan on homelessness has yet to be told.
Many other anti-poverty programs—besides the aforementioned ones—are receiving support in the president’s 2010 budget. Some of these proposals reflect recommendations that were made by the Center for American Progress’ Poverty Taskforce in its report, “From Poverty to Poverty: A National Strategy to Cut Poverty In Half.” Among them:
- Expanding the Child Tax Credit: President Obama’s budget would make the expansion of the child tax credit permanent, keeping an estimated 1 million children out of poverty.
- Childcare and early education: The 2010 budget suggests continued support of recent expansions in childcare, Early Head Start, and Head Start, which amounted to $4.2 billion in new spending.
- Job training: The president’s budget provides new funding for job training programs that will benefit disconnected youth and other low-income workers, including the transitional jobs, Youth Build, and programs targeting ex-offenders.
All of these efforts to fight poverty will help rebuild our economy from the bottom up. For the past eight years our government tried the trickle-down approach to economic development, enriching our nation’s wealthy at the expense of helping low-income Americans make their way into the middle class. Our entire economy benefits by ensuring greater resources to help Americans struggling with poverty to help themselves. As our report “The Economic Costs of Poverty” outlines, the costs to the U.S. economy associated with childhood poverty alone total about $500 billion per year, or the equivalent of nearly 4 percent of our gross domestic product.
President Obama’s first budget signals he intends to break this poverty cycle. It’s about time.
Joy Moses is a Policy Analyst in the Poverty Program at the Center for American Progress. To read more about our anti-poverty proposals, please go to the Poverty and Mobility page of our website.