Is the Super Committee Super Enough? Time to Rethink America۪s Approach to Poverty
As the budget “super committee” does its important work, poverty advocates are understandably concerned about how the committee۪s recommendations could affect recipients of the $500 plus billion the U.S. spends on anti-poverty programs each year. This amount would be sufficient for grants of $10,869 to every one of the Census Bureau۪s estimated 46 million poor people in the U.S.
Of course, the U.S. does not hand out that cash in direct grants to the needy. Instead, these dollars are spread out across what CATO Institute scholar Michael Tanner has estimated to be 122 different federal programs. Although every one of these programs was founded with the best of intentions, their proliferation has created enormous possibilities for overlap, duplication, and waste.
That۪s why the super committee has an important job to do in rethinking how we approach the way the federal government deals with poverty in order to provide the greatest possible benefit to those in need.
Although the bulk of U.S. anti-poverty efforts began with Lyndon B. Johnson۪s “War on Poverty” in the 1960s, the face of poverty has changed significantly since that time. Yet federal poverty policy has failed to keep up.
First, America۪s poor are much younger than in the past. In 2010, nine percent of those in poverty were aged 65 and older. In 1959, that figure was 35 percent.
Yet even this comparison understates the progress we۪ve made. According to the Brookings Institution۪s Ron Haskins, a true poverty rate for the elderly would take into account non-cash governmental benefits such as Medicare and food stamps (SNAP). Accounting for these benefits would bring today۪s senior poverty rate down to six or seven percent.
This positive trend owes in large part to federal anti-poverty efforts directed towards those over age 65, such as Social Security and Medicare. The elderly are no longer the age group most likely to live in poverty.
Second, it۪s critical to recognize current racial disparities in poverty rates. Today, the poverty rate for blacks and Hispanics approximately 27 percent for each group is more than double that of non-Hispanic whites, which is about 10 percent.
The U.S. deserves credit for the improvement in reducing poverty for some vulnerable populations, such as the elderly. But the reshaping of the demographics of poverty should lead to a corresponding shift in our anti-poverty strategy. Addressing poverty among children, working age adults, and people of color requires a different approach than the transfer payment heavy focus of the last 40 years.
Fortunately, there is an anti-poverty formula that will help, one that is laid out in the important book, Creating an Opportunity Society, by Haskins and his colleague Isabel Sawhill. They describe a three-fold approach: (1) finish high school, (2) work full-time, and (3) marry before having kids. According to their calculations, doing all three of these things reduces the odds of being poor by six-fold, from 12 to two percent, and increases the odds of joining the middle class, from 56 to 74 percent.
If the super committee wants to save money and put a real dent in poverty, it should look at demographic trends to reapportion our existing spending on poverty. Focusing on these data would direct the committee to focus on interventions to improve high school completion, encourage work, and promote marriage before parenthood.
Unfortunately, given the way the super committee is set up, there is an automatic sequestration if it fails to achieve a goal of $1.5 trillion in cuts. The sequestration rules are written to protect Social Security, Medicare, and anti-poverty programs from budget cuts.
While this means sequestration will protect potentially vital support to low-income people, it diminishes the likelihood of real change in these areas. Long-term rethinking of these programs would be left to the entire Congress, which is not a promising forum for innovation or new ideas.
As so often happens in Washington, this means that the solution to the problem is apparent, but the likelihood of the super committee reaching that solution is remote. Perhaps a future super committee will have a more expansive mandateone that would allow it to save money while spending federal anti-poverty dollars in a smarter and more effective way.
Until then, we may be stuck with a clear view of how to better help America۪s poor, but no feasible way to get there.
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Tevi Troy is a senior fellow at Hudson Institute and a former deputy secretary of Health and Human Services.