Anti-poverty Programs Lift about 830,000 Wisconsinites above Poverty Line
Speaker Ryan and other conservatives are calling for sweeping changes that would seriously weaken safety net programs, and a core argument for those changes is way off the mark.
In early June, Ryan and other House Republicans issued a report about reforming public assistance programs that contends that despite decades of substantial federal spending for safety net programs, “the official poverty rate in 2014 (14.8%) was no better than it was in 1966 (14.7%), when many of these programs started.”
At first blush, that sounds like a compelling argument, but it’s a red herring. Speaker Ryan’s claim is based on the official poverty measure, which seems logical. But that gauge of poverty, established by the Census Bureau in the 1960s, measures cash income only and excludes many forms of public assistance. As the Center for Budget and Policy Priorities points out about this poverty measure:
“…it ignores virtually all anti-poverty assistance created or expanded over the past half century, while counting the main form of assistance cut sharply over this period – cash assistance for families with children.
Proposed Changes Will Hurt the Elderly, Blind and Disabled, while Corporate Fraud Goes Unpunished
The Wisconsin Senate moved a step closer last week to passing a bill that has been described as combatting fraud or abuse in the FoodShare program, but which will do little, if anything, in that regard. In contrast to the progress of that legislation, as each day passes it looks less likely that the Senate will approve a bipartisan bill (AB 669) that could accomplish a great deal to halt benefit fraud by businesses.
AB 669, which was approved by a voice vote in the Assembly, would make it a felony to fraudulently obtain an economic development benefit from the Wisconsin Economic Development Corporation (WEDC). It would also allow WEDC to bring a civil action to recover damages for fraudulently obtained benefits. Although the lead Assembly author of the bill is a Republican (Rep. Kerkman), and it enjoyed broad support in the Assembly, AB 669 hasn’t even been given a public hearing in the Senate. Read more
Scoring Political Points Has High Costs for Taxpayers & Disadvantaged Wisconsinites
As I enjoy Thanksgiving and the rest of the holiday season, I hope I’ll remember the people who struggle to feed their families and need public assistance to meet basic food needs. Unfortunately, the state legislature is working on bills that will make it harder for some people to get public assistance, such as food stamps and unemployment benefits, and that will also be expensive for taxpayers.
No one wants to see any fraudulent use of public programs like unemployment insurance and food stamps (also known as SNAP nationally and in Wisconsin as FoodShare). Because there’s broad public support for eliminating “welfare fraud,” it’s good politics to make a show of fighting the misuse of benefits. Unfortunately, the political popularity of legislation that has the stated purpose of reducing fraud sometimes leads elected officials to pass ineffective welfare reform bills that have considerable cost to taxpayers and harmful effects for the people the programs are effectively serving. Read more
SNAP benefits, also known as food stamps, help put food on the table for nearly half a million Wisconsin children in families with low incomes. Efforts to restrict access to SNAP, such as the changes Governor Walker has proposed, could harm children by making it harder for families to make ends meet.
SNAP provides a modest but important boost to many Wisconsin families with children. In 2013, 452,000 children across Wisconsin benefitted from SNAP – about 1 out of every 3 children in the state. In four counties – Milwaukee, Sawyer, Adams, and Burnett – more than half the children benefitted from SNAP at some point during the year.
Governor Walker has said that he wants to make it harder to receive SNAP benefits, by requiring people to pass a drug test before they can receive assistance. We don’t have the details yet on what Governor Walker is proposing, but we do know that his plan would likely be cost inefficient and conflict with federal requirements that bar wide-spread drug testing for SNAP recipients. Read more
One in nine households in Wisconsin has difficulty affording food, according to a new report from the U.S Department of Agriculture.
Nearly 12% of Wisconsin households did not have access to enough food for an active, healthy lifestyle over the period 2011 through 2013.That translates into about 270,000 Wisconsin families struggling to put food on the table.
The share of Wisconsin households that have trouble affording food shot up during the recession and hasn’t come back down; a decade ago, only 9% of Wisconsin families lived in food insecurity. That’s the same pattern shown by many other measures of economic well-being for Wisconsin families. For example, poverty rates in Wisconsin also remain stubbornly high, and household income levels don’t show much signs of bouncing back to pre-recession levels either. As a result, many families are continuing to experience the same levels of hardship that they did during the recession – even though some of the temporary supports for families with low incomes that were introduced during the recession have since been eliminated. Read more
Paul Ryan has a released a new poverty plan that advocates consolidating federal safety net programs and turning the money over to the states. It’s always worth taking a look at changes that could make anti-poverty program more effective, but Ryan’s approach would decrease opportunity for individuals living in poverty, not increase it.
Ryan frames his new proposal as aimed at giving low-income people the tools they need to make ends meet and lift themselves out of poverty. According to his proposal, Expanding Opportunity in America:
“A key tenet of the American Dream is that where you start off shouldn’t determine where you end up. If you work hard and play by the rules, you should get ahead. But the fact is, far too many people are stuck on the lower rungs…There are many factors beyond public policy that affect upward mobility.
Nearly 900,000 people in Wisconsin will see a cut in their food assistance benefits starting Friday, making it harder for many Wisconsin families to put food on the table, according to a new Wisconsin Budget Project report.
The across-the-board cuts will reduce food assistance by $89 million in this fiscal year, when a boost to the Supplemental Nutrition Assistance Program (SNAP, also known as food stamps), is set to expire.
Wisconsin children will be especially hard hit by the cut, as 1 out of 3 Wisconsin children received SNAP benefits last year. In some areas of the state, such as Milwaukee and rural counties in northern Wisconsin, SNAP is such an important support for families that more than half the children receive assistance over the course of the year.
In addition to helping feed hungry families, SNAP is one of the fastest, most effective ways to stimulate a struggling economy. Read more
A Significant Economic Hit to the National Economy and a Gradually Expanding Erosion of Key Programs
Economists expect the federal government shutdown to have significant adverse consequences for the national economy. This LA Times article reports that some project that even just a two-week partial shutdown will cause a reduction of 0.3 to 0.4 of a percentage point from national economic growth in the fourth quarter. That’s particularly a problem when the economic recovery is already so sluggish that job growth has been barely keeping ahead of population growth.
I worry about those economic consequences, but I am also very concerned about the effects of the shutdown on children and families in our state – especially for low-income and vulnerable families. Fortunately, most federally funded programs for those families will continue at least through October, but the consequences could be very serious for vulnerable families if the shutdown lasts well into the fall. Read more
Poverty Remains High, Median Income Remains Low, and Health Insurance Coverage Improves Modestly
Data released today by the U.S. Census Bureau reinforce the recent findings by economists that there is a very wide gap between the rich and the poor. The new Census figures for 2012 from the Current Population Survey (CPS) show that the painfully slow economic recovery has yet to help a large segment of Americans. Poverty remained high last year, at 15% nationally, and median income remained low — 8.3% below the 2007 level, before the Great Recession began.
In a New York Times blog post this afternoon, a graph prepared by Jared Bernstein uses the 2012 Census Bureau data to illustrate the diverging trend lines since 1967 in the household income of low, middle and upper income Americans. And as Bernstein notes, the divergence would be much wider if the Census Bureau didn’t exclude capital gains income from its data. Read more