Wednesday, September 18, 2013

Social Safety Net Programs Kept Tens Of Millions Out Of Poverty

The official poverty rate was essentially unchanged at 15.1 percent in 2012, and alternative measures show that safety net programs like food stamps, unemployment insurance, Social Security, and tax credits for the working poor keep tens of millions of Americans out of poverty each year, the Census Bureau reported Tuesday.

The official poverty statistics are based solely on income and do not include the cash and voucher transfers that federal anti-poverty programs provide, such as the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) and the Earned Income Tax Credit (EITC). In 2011, the Census Bureau began calculating an alternative set of statistics that include those transfers, as well as costs of living that aren’t captured by the official data. The alternative statistics are called the Supplemental Poverty Measure (SPM) and they offer a sketch of who and how many are served by safety net programs.

This chart shows that Social Security, the EITC, and SNAP are the biggest poverty-reducing programs measured in the new data, and that out-of-pocket medical costs are the single biggest thing driving people into poverty:


Translating the SPM data into raw totals of Americans rescued from poverty is complicated, but the Census Bureau reports that social security kept 15.3 million people out of poverty, unemployment insurance kept 1.7 million people out of poverty, and SNAP kept 4 million people out of poverty in 2012. Without the EITC, 3.1 million more children would have lived in poverty in 2011. A total of 40 million individuals were lifted out of poverty by federal benefits programs in 2011.

The overall poverty rate under SPM calculations is significantly higher than the official measure at 16.1 percent for 2011. Child poverty is far lower under the alternative statistics, but poverty is far higher among senior citizens using the new measure.

Despite their contributions to stemming poverty, housing subsidies have been cut due to sequestration. SNAP faces cuts of at least $4 billion and perhaps as much as $40 billion. Republicans have frequently targeted the EITC for cuts. Unemployment Insurance funding has already been pared back in many states, and Congress cut federal benefits for the unemployed at the start of the year.

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