“A peculiar thing happened last year during the Covid-19 pandemic: As large swaths of the U.S. economy shut down and unemployment skyrocketed, hunger rates held steady and poverty rates went down.
From the pandemic’s earliest days, Washington showed it had learned the lessons of past crises like the 2008 financial collapse, when policymakers responded with too little too late to help people get by and the economic recovery was hampered as a result. So as the country faced a once-in-a-century pandemic and the sharpest economic downturn since the Great Depression, Congress threw trillions at the double disaster, sending unprecedented levels of aid to American families and businesses.
Soon, a pattern was evident, thanks in part to real-time monitoring by the U.S. Census Bureau: When Washington doled out federal aid, hardship declined. When Washington let aid expire, hardship ticked back up.
In essence, the pandemic triggered a country-wide policy experiment aimed at keeping families fed and financially afloat. There have been big increases in food stamps and unemployment benefits. Three rounds of stimulus checks. Universal free meals at schools and new grocery benefits for kids who are learning virtually, or out of school during the summer. Hundreds of millions of food boxes flooded into churches and other nonprofits.
The latest tranche of aid may carry the biggest bang yet: six monthly child tax credit payments that will be dispersed through the end of the year. The first two rounds of payments that went out in July and August fueled a dramatic reduction in the rate of American households with kids who report sometimes or often not having enough to eat in the past week, according to the Census Bureau.
All that aid appears to have worked.
“Lo and behold, if you give people money, they are less poor,” said Elaine Waxman, an economist and senior fellow at the Urban Institute who has closely monitored how low-income households have fared throughout the crisis.”
“the U.S. has long been seen as an outlier for its comparatively limited safety net, and is sometimes referred to as “the reluctant welfare state.” Other wealthy countries, like Canada and the United Kingdom, have more generous unemployment programs and provide allowances to help with the costs of raising children, on top of providing health care and other benefits that are broadly available, even to middle-income households.
By contrast, in the United States, there has been a much greater focus on ensuring aid goes primarily to low-income households that have met strict eligibility and income requirements. America’s two biggest safety net programs, Medicaid and the Supplemental Nutrition Assistance Program, or SNAP, (still known to many as “food stamps”), have fairly low income caps and are squarely aimed at providing in-kind benefits like medical coverage and food — not giving people money to spend how they see fit.”
“the roots of the Democratic divide go back to last November, to the arguments over what happened, and to the way to respond to those results. In those first days after Election Day, Democrats discovered that their hopes for widespread gains were
“Four years later, Clinton delivered on that promise, signing the Personal Responsibility and Work Opportunity Reconciliation Act. The bipartisan legislation transformed the old federal welfare system, known as Aid to Families with Dependent Children (AFDC), into a new program, Temporary Aid for Needy Families (TANF).
A decade after signing welfare reform into law, Clinton took a victory lap in The New York Times. “Welfare rolls have dropped substantially, from 12.2 million in 1996 to 4.5 million today,” he wrote in 2006. “At the same time, caseloads declined by 54 percent. Sixty percent of mothers who left welfare found work, far surpassing predictions of experts.”
Most important, poverty, and especially child poverty, had declined. In 2000, the share of children living in households earning less than the official poverty threshold was 16.2 percent—still too high, but the lowest rate since 1979. The decade after welfare reform passed saw the sharpest drop in child poverty for kids living in homes headed by single mothers since the 1960s.
That improvement was partly a product of the late ’90s economic boom. But much of it could be traced to welfare reform legislation, in particular its time limits and its requirement that beneficiaries eventually find a job.
For the most part, those gains have endured. In the last two decades, child poverty rates have fluctuated somewhat with the economy but have generally trended downward. In 2019, the child poverty rate was down to 14.4 percent—and that figure arguably overstates the number of children living in poverty. A separate figure, known as the Supplemental Poverty Measure, put child poverty at 12.5 percent in 2019, down several points from the turn of the 21st century.”
“Coronavirus relief legislation already has weakened links between government benefits and work in several ways. Democrats seem poised to weaken those links even further.”
“This is all wrong. With reasonable design parameters, a welfare state does almost nothing to discourage core potential workers from working. And there’s nothing wrong with a situation in which the elderly, teenagers, parents of very young kids, and people with severe disabilities and their caretakers don’t work. A strong welfare state has big benefits for its recipients, and it helps stabilize the macroeconomy and prevent deep recessions. Last, but by no means least, a strong welfare state creates a situation where regulatory policy questions can be evaluated on the merits with the knowledge that people will be taken care of rather than used as a backdoor to support jobs and incomes.”
“America’s original cash welfare program, Aid to Families with Dependent Children (AFDC), suffered from very real design flaws that genuinely did discourage work. The best and most natural fix would have been to spend more on the program so benefits didn’t phase out so sharply. But congressional Republicans in the mid-1990s were determined to use the flaws in the program to all but eliminate cash welfare, and after a bit of hemming and hawing, Bill Clinton went along with it and claimed it as a victory. As Dylan Matthews details, that ended up being a disaster for the poorest Americans.
But it did achieve its political objective of opening up space for two other kinds of programs. On the one hand, you have cash assistance programs that are tied to work (Earned Income Tax Credit and Child Tax Credit). On the other hand, you have programs — Medicaid, SNAP, Section 8 housing vouchers — that don’t require work but also don’t give you cash. There’s also TANF, which is a federal program that gives grants to states to help them organize a cash welfare system whose benefits are only temporary (that’s what the T stands for) and conditioned on finding work within two years. The states are given huge discretion on how to run this program, often using the money for things other than delivering cash benefits.
Then America also has a separate, much more generous welfare state for senior citizens — Social Security and Medicare — and there seems to be a social consensus that the elderly are deserving of help. Stuck somewhere in between are disability programs, which are formally part of the Social Security system but politically speaking seen as “welfare” programs in part because there are always questions about the rigor of the diagnostic criteria.”
“living in poverty — and especially growing up in poverty — has really bad impacts, and providing assistance can deliver useful long-term benefits.
A recent paper by Manasi Deshpande, for example, shows that when kids lose their SSI benefits, it has a negative long-term impact on their younger siblings’ earnings”
“This is a powerful finding because the younger sibling’s situation is not the target of the program. It’s simply showing that delivering extra financial resources to the family improves the kids’ long-term situation — better nutrition, more focus on school, whatever it is.
A study of the rollout of the SNAP program, similarly, shows that kids whose parents got benefits while they were in utero or up to age five ended up better educated, living in better neighborhoods, and less likely to be disabled as an adult than kids whose parents started getting the benefits when the kid was in their teens. The children also ended up less likely to receive social assistance programs themselves. All of these effects are modest in scale, but the impact on adult receipt of social assistance is large enough that SNAP “pays for itself” in fiscal terms separate from the benefits to the beneficiaries. SNAP benefit availability also appears to reduce obesity and reduce the number of days kids miss school due to illness.
A comprehensive study of one of America’s first cash welfare programs — mothers’ pensions — showed that women who got the benefits lived longer while their sons earned 20 percent more as adults and were less likely to be overweight (they couldn’t track daughters because of name-changing). By the same token, kids whose parents benefit from more generous EITC benefits have higher math scores and are more likely to graduate high school.”
“Medicaid expansion has saved over 20,000 lives since it was enacted. A study of a previous expansion in the 1980s showed that kids who grew up benefitting from expansion paid more in taxes and were less likely to need EITC benefits than those who did not benefit from that Medicaid expansion. A separate study shows that the grandchildren of women who benefitted from that expansion are less likely to have low birth weight. Those kids are not old enough to study adult outcomes yet, but we know that low birth weight kids are likely to have lower IQs and generally worse outcomes in terms of education and income.
Last but by no means least, kids whose families get housing assistance earn more as adults and “childhood participation in assisted housing also reduces the likelihood of adult incarceration for males and females from all household race/ethnicity groups.””
“The big problem with this patchwork of programs is that it’s so much a patchwork.
Eligibility rules and procedures vary by state. If you move, you might lose benefits which creates a significant disincentive to relocate even when doing so might have other major benefits. The cash programs phase in and phase out in an odd way that delivers too little assistance to the poorest while creating very steep marginal tax rates on somewhat higher-income families.
Social Security, by contrast, is really convenient. You can earn a living in New Jersey and take it with you to Florida when you retire. And the coverage is so broad that it even takes a bite out of child poverty thanks to kids who live with older parents or older relatives and kids who receive the benefit if one of their earning parents dies or becomes disabled.”
“And to the best of my knowledge, there’s no real magic to the means-testing programs. SNAP does a lot to help people and so does housing assistance and so does Medicaid, but basically all for the same reason that cash does — the money is fairly fungible and having more money is helpful.”
“”Using data from a nationally representative survey of older adults, we find that higher Social Security income significantly improves health outcomes among the elderly. Specifically, we find that increases in annual Social Security benefits led to significant improvements in functional limitations and cognitive function, and that the improvements in cognition function were larger for individuals with better cognition.””
“In practical terms, there’s nothing wrong with an incremental approach. We should keep fighting to expand Medicaid in the states that haven’t done it yet. We should try to pass Joe Biden’s proposal to make Section 8 vouchers available to everyone who qualifies. We should listen to the Center on Budget and Policy Priorities and put more money into TANF—it’s 40 percent smaller than it was when it was enacted merely because of inflation. We should also require that states actually use a large share of the grants for cash assistance, instead of for other vaguely-related-to-welfare stuff like abstinence programs.
But in bigger picture terms we ought to do what I advocate in my book One Billion Americans and create what’s basically Social Security for Parents — a truly universal cash allowance for parents of young kids. Michael Bennett and Sherrod Brown have a plan for a child allowance worth $300/month for kids under six and $250/month for kids under 17. It’s a great plan. To be even more ambitious, I would recommend they drop the means testing (theirs phases down to zero for married couples earning over $200,000) and add a one-time baby bonus payment (you could think of it as nine months’ worth of payments during pregnancy). And conceptually, I think you should probably consider eliminating SNAP, Section 8 housing assistance, and weird stuff like LIHEAP and instead just making monthly checks even bigger. You could also scrap the family size adjustment in EITC and turn it into a narrower wage subsidy.
What you’d definitely do is take away the tax code’s backdoor subsidies for parents and instead give middle class — and even wealthy — parents access to this same allowance that everyone gets.
This would massively reduce child poverty with all kinds of ancillary benefits for child development and long-term growth.”
“The first of the 2021 child tax credits hit parents’ bank accounts in July — but not for everyone. For many of the parents who need it most, accessing the money may be more of a struggle.
That’s because the IRS — an agency that knows little about the lowest-income Americans, who often don’t file taxes — has been tasked with distributing the money, up to $300 per month per child.
On July 15, the day payments first went out, the IRS said it sent $15 billion to 35 million families, 86 percent of which was sent via direct deposit. That suggests that the vast majority of initial recipients were from families who earned income and filed taxes, many of them middle- or lower-middle-income parents whose names, addresses, and bank accounts are on file from tax returns.
More than 10 million children live in poverty, according to 2019 data from the US Census. Of those, the People’s Policy Project estimates that about 7 million live in non-filing households. (Because these families are, by definition, somewhat difficult to track, estimates vary: The Census Bureau says that 36 percent of children in poverty are from families that did not file taxes in 2019, including 55 percent of children in families in deep poverty.)
Most of these families haven’t signed up to get government stimulus checks, either, effectively leaving thousands of dollars from the government on the table over the past year. The IRS gathered information on an additional 720,000 children in non-filing households where the parents registered to receive stimulus payments.
But that still leaves millions of children whose parents are eligible for the child tax credit (CTC) but who are not on track to receive it.”
““The North Star should be making this as automatic as possible so families don’t have to take affirmative steps to get the support they need.””
“In March, when Congress passed its $1.9 trillion Covid-19 stimulus package, the legislation included a $4 billion loan forgiveness program targeted at Black and other minority farmers. Based on strong evidence that the U.S. Department of Agriculture had perennially discriminated against certain groups, placing them at much higher risk of foreclosure than white farmers, the program offered a one-time emergency payout to alleviate debt for what it called “socially disadvantaged” farmers.
The policy represented a worthy and long-overdue attempt to redress historic and ongoing discrimination by USDA. But now the program is under legal siege.
Over the past few months, white farmers and ranchers have filed about a dozen lawsuits against USDA, alleging that they were victims of racial discrimination because, unlike several minority groups, white people did not automatically qualify for the emergency debt relief. While the lawsuits have been filed in multiple states, a class action has been certified in a case in Texas, where five farmers sued with backing from Stephen Miller, President Donald Trump’s former adviser. To the chagrin of Black and other minority farmers long awaiting relief, several federal courts have issued temporary injunctions blocking payments while these cases are decided.
Now, the Biden administration must decide whether to soldier on in court to defend the program or seek legislative fixes to inoculate it from legal challenges.”
“In the near term, the results of the white farmers’ lawsuits could have a significant impact on farmers of color across the country. In particular, without relief payments that USDA was supposed to begin distributing this summer, some Black-owned farms inevitably will collapse”
““When real estate companies say no to Section 8 tenants, what they’re really saying is you can’t work here, you can’t get food here, and your child can’t go to school here,” Carr said. “Housing discrimination doesn’t just impact one thing — it impacts literally everything.””
“There is an underappreciated contributor to the United States’ comparatively poor health: We underinvest in social services that help people live healthier lives and therefore overspend on medical care relative to other developed countries.
The long-term trends in US health care, as I wrote about earlier this week, tell a clear story: Medical outcomes have gotten better, with measures of life expectancy and disease burden improving over the last 25 years, but they haven’t improved as much as they have in other wealthy nations that spend less money on health care than the US.”
“If you combine social services spending with health spending, the US and its peers spend about the same amount of money (a little more than 30 percent of their respective GDPs). But spending in those other countries is weighted more toward social support — food and housing subsidies, income assistance, etc. — whereas America spends more on medical care.”
“Eighteen percent of people in the US live in poverty, compared with 10 percent in other wealthy countries. And we know that people with lower incomes face many structural challenges — lack of access to healthy food, clean water, and fresh air, for starters — that lead to worse health outcomes. When they get sick, they have a harder time both finding a doctor and affording their medical care. In general, they also live with more stress and anxiety than people who make more money, which also has deleterious effects on their health.”
“Throughout the pandemic, the median view of good housing policy—supported by landlord associations, tenant advocates, and policy wonks of all ideological stripes—has been to have the federal government fund rent relief. That way, the providers of rental housing can pay their bills, and financially pressed renters aren’t forced onto the streets or into more crowded living situations.
Despite these funds being appropriated for rent relief programs, actually getting money to people continues to be a major challenge.”
It’s a familiar refrain to low-income renters searching for a place to live. The four-word phrase signals one of the last (mostly) legal forms of overt housing discrimination. Commonly referred to as “source-of-income discrimination,” landlords across the nation often refuse to accept tenants who attempt to pay rent with help from the federal government’s Section 8 housing voucher program.
Now, Iowa Gov. Kim Reynolds (R) has put the nearly 40,000 Section 8 recipients in her state in jeopardy of getting those notices by signing a new law that ensures cities and counties can no longer protect their residents from this subtle form of discrimination.
Section 8 housing is the government’s largest low-income rental assistance program. According to the Center on Budget and Policy Priorities, 5.2 million people nationwide receive vouchers from the program that cover some portion of their rent. The program is chronically underfunded, so only 1 in 5 households that are eligible to receive assistance actually do”
“There’s a lot of evidence that Section 8 vouchers reduce homelessness and alleviate poverty.
In her reporting for Vox, Stephanie Wykstra highlighted studies showing that “housing vouchers help prevent homelessness and increase long-term health and economic outcomes of children in low-income families.” And Vox’s Dylan Matthews covered a fascinating study that showed how (with help) some housing voucher recipients were able to find housing in high-opportunity neighborhoods, where children have significantly better chances at a prosperous future.”
“There is evidence that landlords have valid (nondiscriminatory) reasons for not wanting to participate in Section 8 housing — working with the government to make sure your property fits the requirements can be onerous and frustrating. Landlords may have difficulty getting rents paid on time by the local public housing authority and often the unit inspections can be an inefficient and arduous process.”