Recovery Act Kept 4.5 Million People Out of Poverty in 2009, Helping Keep Poverty Flat

[ProSense]

Recovery Act Kept 4.5 Million People Out of Poverty in 2009, Helping Keep Poverty Flat

According to this CBPP analysis, the ARRA lifted millions out of poverty:

Our analysis of data that the Census Bureau released this week shows that the 2009 American Recovery and Reinvestment Act was one of the single most effective pieces of antipoverty legislation in decades. In 2009, the Recovery Act’s temporary expansion of the safety net kept 4.5 million people out of poverty.

Last September, the Census Bureau reported that, under its official measure of poverty, which counts only a household’s cash income (not tax credits or non-cash government assistance such as food stamps), the poverty rate rose from 13.2 percent in 2008 to 14.3 percent in 2009.

On Tuesday, the Census Bureau released several new poverty figures for 2009 that rely on alternative, broader poverty measures — ones that include tax credits and non-cash benefits. Under almost all of these alternative measures, the safety net as a whole, including the Recovery Act expansions, prevented any rise in poverty in 2009, despite the deep recession and very high unemployment. (In one of the eight measures, poverty went up but by only a fraction of the official figures, 0.4 percentage points. None of the other measures was statistically distinguishable from the year before.)



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1. Census: Number of poor may be millions higher

http://news.yahoo.com/s/ap/us_census_poverty

[ProSense]

2. EPI:

Another look at poverty in the Great Recession

The U.S. Census Bureau released alternative estimates of poverty yesterday that give yet another reminder of the disastrous effect the recession has had on workers and families.

The official poverty measure tells us that 14.3% of Americans are living below the official poverty threshold. Note, however, that this standard has long been criticized for failing to be an adequate measure of deprivation in the United States. The root of the problem is that the current poverty measure is not dynamic: It does not reflect non-cash transfers from the government, like Supplemental Nutrition Assistance (food stamps), housing vouchers, child care subsidies, Medicaid and Medicare, or the Earned Income Tax Credit, nor does it reflect changes in spending patterns, like increasing housing and medical costs, or that these costs might vary by state or region.

In order to be more dynamic, the Census Bureau offers myriad alternative measures, which can be grouped into two categories: thresholds and income. Threshold refers to the dollar amount under which someone is poor. The official threshold is three times the food budget in 1959 (adjusted for inflation). The alternative thresholds adjust this to reflect increasing out-of-pocket medical expenses, to show the differences in cost of living for various parts of the country (like rural south versus urban northeast), and to show multiple ways in which prices can be inflated over time. Figure A shows the official measure and a range of alternative thresholds. Though the recession has certainly exacerbated the official poverty rate, the threshold measures show that the situation appears even worse.



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Taken together, the alternative measures of poverty show how much the recession has increased poverty and how vital government programs and policies are to mitigating those effects.

[ProSense]

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