US Economic, Regulatory and Banking History

Census Bureau Numbers

Posted on Friday, September 17, 2010

The Census Bureau poverty data released today makes it clear that our country is facing a state of emergency. In just one year, 3.7 million more people, including 1.4 million children, fell into poverty. Today, more than one in five children is poor.

The depth of poverty created by the Great Recession is shocking. But it should not come as a surprise. With 15 million people out of work last year and many millions more with earnings too low to make ends meet, economists told us we should expect epidemic poverty. The only modest surprise is that poverty did not rise even more steeply, thanks in large part to expansions in Unemployment Insurance and temporary subsidized jobs put in place by the Obama Administration and Congress. Unemployment benefits alone kept 3.3 million people out of poverty, according to the Center on Budget and Policy Priorities. The Census Bureau reported that if food stamps and low-income tax credits were counted in its poverty calculation, the data would show that about 4 million more people were lifted out of poverty.

Despite this "good news" it is not an exaggeration to say that our country is facing a state of emergency. Poverty hits hardest where it will do the most damage. Children are disproportionately poor, and the youngest children are the poorest of all (more than one in four children younger than five is poor). These children are the most vulnerable to harm from inadequate nutrition&mdash their brain development is threatened and they are more likely to become sick or require hospitalization.

Many of their parents are working, but due to the recession their wages or hours have been reduced, pushing them below the poverty line—often significantly below. A mother with two children is considered poor if her income is below $17,285. But many have fallen even further into what is categorized as deep poverty -- or half the poverty level. The Census data shows that 19 million people were living in deep poverty in 2009 -- an increase of nearly 2 million over 2008.

Even before the recession took hold, 32 percent of Americans were living very modestly above the poverty line -- with little protection from lay-offs or lost work hours. The new Census data shows not only huge growth in the number of Americans living below the poverty line, but another increase in the "near poor." In 2009 more than 100 million people lived below 200 percent of the poverty line (about $34,000 for a three-person family), up from 96 million in 2008. At twice the poverty level, more than one-third of families have a tough time affording food or housing, according to the Urban Institute.

If a flood, fire or disease threatened even a fraction of the number of people living in or near poverty, we would not hesitate to declare a national emergency. We would do so both out of our sense of obligation to protect our neighbors and to prevent permanent economic loss, which affects us all. Our response to the income emergency facing our country should be no less immediate and far-reaching. The stakes are at least as great.

When emergency conditions strike, Americans have historically taken action to clear away the destruction and rebuild. Most people are ready to take action now. A poll conducted by Lake Research Partners, on behalf of the Ms. Foundation for Women and Center for Community Change, shows that a majority of Americans believe it is time for the government to take a larger, stronger role in making the economy work and providing economic security. But self-serving politicians, lobbyists and pundits are taking advantage of this time of hardship to press for precisely the wrong actions—cuts in the very services and benefits that protect those who were hurt most by the recession, while providing more tax breaks for those at the top of the income ladder.

Calling for hundreds of billions of dollars in tax cuts for the top two percent of earners while one-quarter of our children are poor is morally and economically wrong. Pretending that tax cuts of more than $100,000 a year for the wealthiest Americans will do as much for the economy as providing jobs and income support for the bottom 40 percent is wrong. Framing these cuts as aid to small business doesn't erase the truth. The Main Street Alliance, a group of small business people, has said loudly and often that its members don't earn enough to benefit from these breaks.

Some of those claiming that tax breaks for the top will trickle down are also brazen enough to blame the Obama Administration for the steep rise in poverty. The Administration proposed the policies that have helped. These include: Unemployment Insurance expansions; the Temporary Assistance for Needy Families Emergency Fund, which has created more than 250,000 short-term jobs for low-income parents; improvements in the Child Tax Credit and Earned Income Tax Credit, which helped millions of families stay out of poverty; and an increase in food stamps, which allowed families to put more nutritious meals on the table.

While these policies did a lot of good they clearly did not go far enough. But contrast these productive steps with the actions of those who stood in the way and held up unemployment benefits or sought food stamp cuts. Look to see who holds hostage tax cuts for 98 percent of Americans, including the low-income tax credits, in order to get breaks for millionaires. See whose interest in deficit reduction extends to cutting jobs, education, health care and more, but whose concerns evaporate when it comes to upper income tax breaks.

Normally in this country we do not let political games stand in the way of a quick and humane response to dire emergencies. We can't let that happen now. We need to extend the TANF Emergency Fund for another year; continue the low-income tax credits; extend federal unemployment benefits past November; and support programs that create jobs so parents can protect their children from the damaging effects of poverty. This is a national crisis. We need to start acting that way.

Huffington Post. Deborah Weinstein

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