New Study Tracks Paths to Cutting Child Poverty in Half

A congressionally-mandated study by the National Academies of Sciences, Engineering, and Medicine identifies two policy packages – both of which combine increased tax credits and direct transfers — that would reduce child poverty by 50 percent within 10 years.

The study, A Roadmap to Reducing Child Poverty, was the topic of a series of panel discussions hosted Thursday by the Brookings Institution. Members of the committee charged with completing the study stressed that their evidence-based deliberations found that no single policy can make the kind of sea change they were charged with making.

“Individual policy and program changes are insufficient,” said Greg Duncan, the committee chair and a distinguished professor in the School of Education at the University of California, Irvine.

The committee began its work by looking at the impact current programs are having on the child poverty rate. Duncan said their analysis found that using the 2015 child poverty rate of 13 percent, eliminating all federal support programs would have raised that rate to approximately 22 percent. The Earned Income Tax Credit, Child Tax Credit, and SNAP benefits were found to have the biggest impacts.

“The U.S. historical record shows that reducing child poverty is an achievable goal,” the report states. “The experience of ‘peer’ countries — such as the United Kingdom, which enacted policies that reduced its child poverty rate by half in a little less than a decade — also demonstrate that this goal is achievable.”

The committee then turned to evaluating individual policy proposals in the hopes of finding a set of interventions that would reduce child poverty by 50 percent over 10 years. That work led to the creation of four policy packages which were evaluated to see which, if any, would meet the reduction target.

Two of the four met the goal of a 50 percent reduction over 10 years:

• A means tested supports and work package that included EITC increases; making the Child and Dependent Care Tax Credit fully refundable and more focused on families in deep poverty who have children under the age of five; increasing SNAP benefits by 35 percent; and increasing housing vouchers for families with children. This package was estimated to reduce child poverty by 50.3 percent over 10 years at an estimated cost of $90.7 billion per year.
• A universal supports and work package that included: EITC increases; making the CDTC fully refundable and focused on families in deep poverty with children under the age of five; raising the federal minimum wage to $10.25; eliminating immigration restrictions for federal anti-poverty programs; instituting a new child allowance that pays a monthly benefit of $225 per month; and enacting a child support assurance policy that guarantees minimum child support of $100 per child. This package was estimated to reduce child poverty by 52.3 percent over 10 years at a cost of $108.8 billion per year.

The committee was not charged with recommending any specific proposal or set of proposals. “The report does not make any recommendations about policy,” said Ron Haskins, senior fellow and Cabot Family Chair in Economic Studies at Brookings. “We don’t say ‘do this policy.’ We give examples of policies that do what we were asked to do and the Congress decides.”

Clearly, one of the tensions in the committee’s work was between policies that primarily promote work as a way out of poverty and policies that provide more direct benefits.

Haskins called attention to a work-focused policy package the committee studied which did not achieve the 50 percent reduction threshold as a potential compromise first step that might find bipartisan support in Congress. Through EITC, minimum wage, and CCTC expansion, plus worker training programs, the package would reduce child poverty by just under 19 percent but would create one million new jobs at a cost of $8.7 billion per year.

University of Wisconsin Professor Timothy Smeeding said a focus on work was not sufficient. “We think work is important. On the other hand, work alone isn’t enough,” he said. “It’s not like poor families aren’t working. Most of them are.”

Michael Strain, director of Economic Studies at the American Enterprise Institute, applauded the report’s nonpartisan approach. “There is a lot in this report for people who approach these issues from the center-right to like,” he said.

First Focus President Bruce Lesley noted that child poverty reduction campaigns are underway across the country in states such as California, Wisconsin, Maine and Vermont and in cities such as Cincinnati and Dallas. Bipartisan interest is also strong on Capitol Hill, with Lesley referencing the array of recent bills aimed at increasing the Child Tax Credit.

“I think you’ll see more legislation coming out on these kinds of things,” Lesley said. “I think there’s growing interest in this issue and I think this report has had a huge role in that.”