Center for American Progress

RELEASE: New Poverty Data Provide Crucial Information on Effectiveness of Public Policies and Offer Insights into Fiscal Cliff Negotiations
Press Release

RELEASE: New Poverty Data Provide Crucial Information on Effectiveness of Public Policies and Offer Insights into Fiscal Cliff Negotiations

Washington, D.C. — In response to the release of U.S. Census Bureau data on poverty and hardship today, the Center for American Progress released an analysis of how this new information should inform Congress’s approach to deciding the fate of many critical programs for low-income Americans during the year-end fiscal showdown.

In the analysis, CAP Poverty expert Melissa Boteach explains how the 2011 Supplemental Poverty Measure data show that public policy choices make a difference when it comes to lifting families out of poverty.

  • Refundable tax credits for working families lifted 8.7 million people out of poverty in 2011, and the child poverty rate would have been 6.3 percentage points higher without them.
  • The Supplemental Nutrition Assistance Program lifted 4.7 million people out of poverty in 2011. Without it, the child poverty rate would have been 2.9 percentage points higher.
  • The low-income home energy assistance program lifted more than 300,000 people above the poverty line in 2011.

At the end of 2012, though, the expansions to the earned income and child tax credits for working families—which kept hundreds of thousands of children out of poverty in 2010 and lessened hardship for millions more—are set to expire. Similarly, if Congress fails to act, the low-income home energy assistance program will be hit at the end of the year by automatic across-the-board cuts that would eliminate 734,000 households from help paying their utility bills. Without action from Congress, the millions of people who were lifted out of poverty by these successful public policies may be forced back below the poverty line.

In addition to shedding light on what is working to reduce poverty, the new data also indicate the types of expenses that, alternatively, are driving families into poverty.

  • Out-of-pocket medical expenses pushed 10.6 million people into poverty in 2011. In fact, the senior poverty rate would be nearly cut in half (8 percent as opposed to 15.1 percent) if not for these expenses, underscoring a need for Congress to avoid cuts to Medicaid and Medicare that would shift costs to seniors and low- and middle-income families.
  • Work-related expenses such as transportation and child care costs also undermined economic security for working families and children, with 5.2 million people pushed into poverty in 2011 due to costs related to their jobs.

“As policymakers consider deficit reduction, jobs, and tax plans over the coming weeks and months, it is important to understand how investments such as tax credits, nutrition assistance, housing, child care and early education, health, and transportation policies all affect the economic security of struggling families and their ability to meet other basic needs such as food and shelter,” writes Melissa Boteach, the Director of the Poverty and Prosperity Program at CAP. “The supplemental measure data released today show that these policies work in keeping families out of poverty and giving low-income families and their children the opportunity to enter the middle class and pursue the American Dream. With the stakes so high in the pending fiscal showdown, this is news that policymakers need to hear—and to which they must adhere.”

Read the full column here.

Infographic: Supplemental Poverty Measure calculates impact of federal programs

To speak with experts on this topic, please contact Katie Peters at [email protected].