Guest Commentary: Our Work is Not Done in the War on Poverty

February 27, 2014 8:34 AM0 comments

By Ann Beltran

There’s nothing like our rising property values to make us start believing we have passed beyond the Great Recession. And with legislative mainstays like Representatives Jim Moran and Frank Wolf opening up their seats for new minds to take on our next set of challenges, we experience a turning point, a turning away from some frustrating and painful years of gridlock over safety net programs like food stamps (SNAP) and unemployment insurance to the even larger challenges of how to create more economic mobility.

At such a time, we should pause and harvest our history for lessons to seed the future. Some of those lessons come from the “war on poverty” launched by President Johnson in 1964. It’s a 50th anniversary gone unnoticed in these pages, but one that we should observe.

As a result of the war on poverty, between 1959 and 1975, the U.S. poverty rate was cut in half (from 22 to 11 percent) and has remained well below 20 percent ever since. The programs it created continue to make a difference to this day. According to the Center on Budget and Policy Priorities, anti-poverty programs lifted 41 million Americans out of poverty in 2012. This is a tremendous success!

But our work is not done. We still have 50 million Americans living in poverty and millions more facing economic uncertainty every day. We need new leaders in our House of Representatives who will continue the war on poverty, not transform it into a war on the poor. The American Dream is slipping out of reach for the majority of Americans. Expanding economic mobility – the ability to improve your lot in life – must be a societal priority. One need only read the January 22 Washington Post story on the findings of Harvard researchers that economic mobility in the U.S. has remained stagnant for the last 50 years. Children born into poverty today have no better chance of rising up the economic ladder than their grandparents did.

Here’s how our next slate of elected officials can change that.

First and foremost, we must ensure that low-income Americans can earn what they need to make ends meet. As President Obama said in his recent State of the Union speech, “no one who works full time should ever have to raise a family in poverty.” Unfortunately, for millions of working Americans, work and poverty go hand-in-hand. Congress should expand the Earned Income Tax Credit and Child Tax Credit, which enabled 9.4 million people to pull themselves out of poverty in 2012. We should also help struggling Americans become entrepreneurs by investing in social business through the Social Innovation Fund, and raising the minimum wage would certainly help.

We must also update programs to support low-income families as they get on their feet. Far too many working families are being punished for achieving success. Right now, many programs automatically terminate when a family receives a modest (and much-earned) increase in income. As a result, they lose far more than they gain. A raise should be an incentive to earn more, not the catalyst for falling deeper into poverty. To remedy this, we must re-grade this “cliff” effect into a slope so that public benefits decrease gradually in proportion to a family’s financial success.

Finally, we must help people save for the future. Data released by CFED last month shows the percentage of households in the U.S. who lack the savings needed to weather a financial storm like a job loss or medical emergency (called “asset poverty”) is 25 percent, and it rises to an astounding 44 percent if you only count “liquid” assets (assets that can be converted to cash fairly quickly). We should all be very concerned if almost half of us are on the brink of financial calamity. Savings provide a cushion for families when these financial crises arise. We spend hundreds of billions of dollars each year promoting asset building through various tax breaks, but they primarily benefit people who already have wealth. Our goal should be to support people to build wealth; not simply reward those who already have it. The Financial Security Credit, which uses the tax code to create matched savings accounts for low-income taxpayers, would help struggling families save so that when disaster strikes, they would have their own personal safety net to fall back on.

If the Great Recession taught us anything, it is that no one is immune from financial catastrophe. The 50th anniversary of the war on poverty gives us the perfect opportunity to reflect on its success, correct what didn’t work, and move forward with the fresh potential of new leaders. Those seeking to represent us in 2015 should begin a healthy debate about how best a great society helps families earn what they need, save for the future, and fulfill their dreams.

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