New Poverty Data Provide Key Insights into Fiscal Cliff Negotiations

Congress is currently considering the fate of many critical programs for low-income Americans in the year-end fiscal showdown, widely known as the “fiscal cliff.” As lawmakers debate the future of these programs, the U.S. Census Bureau has released important new data on poverty and hardship that should inform Congress’s decisions about a balanced approach to deficit reduction and tax reform. One of the key things the Supplemental Poverty Measure data tell us is that public policy does make a difference in lifting people out of poverty and alleviating economic hardship. Refundable tax credits for working families such as the earned income and child tax credits, for example, lifted 8.7 million people out of poverty in 2011, and the child poverty rate would have been 6.3 percentage points higher without them. Similarly, the Supplemental Nutrition Assistance Program lifted 4.7 million people out of poverty in 2011. Without it, the child poverty rate would have been 2.9 percentage points higher. At a time when programs providing opportunity to low-income Americans —- such as those supporting affordable housing, tax credits for working families, the Supplemental Nutrition Assistance Program, and child care assistance —- are potentially on the chopping block, the data provide important insights on policies providing pathways into the middle class, which is America’s engine of economic growth.

Center for American Progress

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