The Common Good Forum, November 17, 2010
Our article from Sister Simone Campbell three weeks ago garnered so many favorable comments, we decided to return to the issue of poverty and how it challenges a politics dedicated to the Common Good. The issue of poverty was virtually unaddressed in the recent election which only goes to show how desperately needed our Catholic voice is. This week, we feature three commentaries, each from a different perspective. Reid Cramer is director of the Asset Building Program of the New America Foundation, a nonpartisan think tank based in Washington D.C., Robert Blancato is currently President of Matz, Blancato and Associates. He was the Executive Director 1995 White House Conference on Aging and served on the Policy Committee 2005 White House Conference on Aging. And, Melissa Boteach is the Manager of the Half in Ten Campaign at the Center for American Progress Action Fund. Her submission was written with the help of the Half in Ten Campaign's intern Jeremy Wolfe.
Reid Cramer: Crafting a Response to the Incredible Rise in Child Poverty
The new poverty numbers recently released by the Census Bureau show that almost 44 million Americans were officially classified as poor. That's the highest number, with the largest yearly increase, since the Census Bureau began tracking poverty in 1959. For many families 2009 was particularly difficult. But there is a high probability that the impacts of the recession will be felt for years to come. One figure that should stop policymakers in their tracks is the rising child poverty rate. Last year, one in five children spent the year in poverty.
Unlike other economic statistics, child poverty isn't just an indicator of how the economy is doing at a moment in time. It is a forecaster of things to come. And the costs are real. Georgetown professor Harry Holzer estimates that child poverty costs the economy almost $500 billion a year in lost productivity, increased health expenditures, and other factors. The recession is expected to extend these losses further. That's because too often children born into poverty grow up to become adults living in poverty. Sustained levels of child poverty will send ripples through the economy for years to come, especially if we don't see a concerted policy response.
It will be essential that policymakers do not concede investments in policies that target child poverty to concerns over the deficit. Given the long run costs of inaction, this is a false choice. Recent history can also be instructive. The Recovery Act passed early last year helped mitigate the impact of the recession for many families and infused badly needed capital into the dwindling economy. Investments in targeted programs like SNAP (food stamps), unemployment benefits, and refundable tax credits offered resources to cover immediate needs and bolstered the economy as they were immediately spent. It turns out that what was good for poor people was also smart for the economy. These provisions must be extended to support the economy and keep households from falling further behind.
But we also need a long-term strategy to confront the limits of opportunity, information, and resources that allow poverty to pass from one generation to the next. Families rely on income to provide for their daily needs, but they often draw upon a stock of assets in the form of savings, investments, and access to other resources to move forward in their lives. This underscores the necessity for a complementary set of policies that promote savings and asset building over the long term.
Fundamentally, we should be focusing on ways to help families gain economic stability by rebuilding their balance sheets. This means reducing levels of debt, overcoming barriers to savings, and connecting with safe and appropriate financial products. One place to start is by reforming the eligibility rules governing public assistance programs which require families to spend down their savings before qualifying for critical services and support. Asking families to jettison their savings runs at cross purposes with the goal of providing stability in times of need. Given the breadth of the recession, this makes more sense now than ever. The Obama Administration has proposed substantially raising the asset limits for the primary federal safety net programs and Congress should implement the administration's proposal.
In the future we should combine social insurance policies with ones that create long-term pathways to economic security and social development. Savings-based policies can help families increase the resources they have to withstand future crisis, whether systemic or personal, and build ladders of opportunity so poverty isn't a default that's set at birth. Fewer children in poverty will strengthen the economy over time. In this economic climate that's a return which more than justifies the investment.
Robert Blancato: Poverty and Seniors
The poverty rate for the 65 and over population in 2009 reached the lowest level since the poverty rate was initiated according to the Administration on Aging. The rate dropped to 8.9 percent. The previous low was 9.7 percent in 1999. By contrast, poverty rates increased by 1.7 percent for those under 18 and 1.3% for those aged 18-64. This data on senior poverty reinforces the importance and prevalence of Social Security and other fixed income sources which provide the essential safety net to insulate seniors from some of the effects of the economic downturn.
Other data suggests there are a growing number of near poor seniors who live at levels just above the poverty line. In addition, poverty rates continue to be higher among minority older Americans in our nation. The absence of a 2010 cost of living increase for seniors on Social Security and continued higher health care and housing costs could portend a different result and a higher poverty rate among seniors when 2010 figures are released.
The social contract between the government and its older citizens as begun with Social Security and continued with Medicare and Medicaid was never intended to be qualified or voided by political whim. At a time when among the fastest growing sector of our older population are those in economic need, we never to reinforce the core values of Social Security and Medicare and not sacrifice them to achieve artificial deficit reduction goals.
Melissa Boteach: How Poverty Afflicts Latino Families & Children
Data released by the Census Bureau in September confirmed what many communities already knew from first-hand experience: the Great Recession is pushing more families into poverty and economic hardship. Between 2008 and 2009, nearly four million new people fell into poverty, over a third of whom were children. But hardly any community experienced a more dramatic increase in poverty than Latino children.
It is in our nation's interest to look out for the well-being of Latino children, 91 percent of whom are U.S. citizens. They are tomorrow's workers and taxpayers, and investing in their well-being is critical to our country's future prosperity. However, the recently released brief, "A Challenge to Our Nation; Improving the Economic Well-Being of Latino Kids" by Half in Ten and the National Council of La Raza, revealed that Latino children experience poverty at a disproportionate rate. 22.7 percent of American children are of Latino heritage, but as of 2009 they account for 36.7 percent of poor children. The Population Reference Bureau expects this percentage to increase to 44 percent over the next 20 years.
Just about one in every three Hispanic American children lived in poverty in 2009, and an additional third of the Latino American population are low-income, meaning they live in households earning below 200 percent of the poverty line or below $44,100 a year for a family of four. Many of these families are working full-time. Nearly 42 percent of Hispanic workers earned poverty-level wages and 13 percent of Hispanics living in poverty over the age of 16 worked full time the entire year.
However, despite elevated levels of poverty, many crucial safety net programs and work supports do not reach Latino children. Unpublished data by the Center on Budget and Policy Priorities show that the safety net lifted a total of 7.3 million American children out of deep poverty (50 percent of the poverty line or $11,000 for a family of four) in 2005, including 67 percent of deeply poor Latino children and 76 percent of all deeply poor children. This demonstrates that these safety net programs are critical. But it also reveals that the safety was less effective for Latino children than for others, and that our safety net has weakened over time, since in 1995 these programs lifted 90 percent of Hispanic children out of deep poverty.
Here are a few ways we can improve critical safety net programs so that they help more families weather hard times.
♦ Make the tax code work for working families: Because Latino parents are more likely to work in lower-wage jobs, policies like the Earned Income Tax Credit (EITC) and Child Tax Credit are incredibly important tools for increasing family economic security and making work pay. Approximately one-third of Hispanic families utilize the EITC. Last year, Congress improved these programs by allowing low-income working families to count more of their earnings in determining their child tax credit, allowing for a larger EITC for families with three or more children, and reforming the provision that penalizes marriage. These reforms have rewarded work and have been proven to improve child outcomes, but are set to expire at the end of the year. They should be made permanent.
♦ Make the SNAP/Food Stamp program more accessible to hard-hit families: SNAP, formerly known as food stamps, has been one of the most responsive safety net programs in the Great Recession. While the program is funded by the federal government, each state sets its requirements for applying to the program. One barrier facing Latino children who are eligible but not enrolled in SNAP benefits is their parents' immigration status. Citizen children with a noncitizen parent are less likely to receive needed nutrition assistance due to the parents' fear and misinformation about eligibility. By reducing barriers like fingerprinting and anti-immigrant laws, a higher percentage of eligible families will be able to benefit from food assistance. States can also make smart choices to increase enrollment of eligible families to ensure that more struggling families can access the program when they need it most.
Latino children are an important part of our nation's future. We can make smart policy choices to ensure that they, and all children, have the tools they need to thrive.
