Crib Sheet: Poverty

The Center for American Progress’ Poverty Task Force recommendations.

By Elisa Minoff
Monday May 7, 2007

Washington D.C., where lobbyists often control the legislative agenda, can seem like a place where good ideas go to die.

But this spring policymakers are talking about a subject that interests few lobbyists and does not brook small thinking: reducing poverty. Since January, the House Ways and Means Committee has held a series of hearings on economic security and poverty reduction. On April 26 subcommittee Chairman Jim McDermott (D-WA) held a hearing on proposals for poverty reduction. As McDermott said in announcing the hearing, “We are beginning to hear a chorus of voices urging action on poverty. Leaders in city government, social research, and charitable organizations have proposed specific steps they think will make a positive difference.”

Though the incomes of the wealthiest families have soared since the last recession, many middle- and lower-income families are barely getting by. The number of poor Americans has grown by five million since 2000, and the United States has higher poverty rates than many other developed nations. A recent UNICEF report on child well-being in rich nations found that the United States had the highest rate of child poverty of 24 developed nations. Studies have also shown that the United States has less short-term income mobility than many European countries and less longer-term intergenerational mobility— that is, children born to poor parents are more likely to be poor as adults in the United States than in Europe.

Poverty demands bold action. On April 25 the Center for American Progress released a report outlining a plan to cut poverty in half in 10 years. The report, From Poverty to Prosperity, A National Strategy to Cut Poverty in Half, is a product of over a year of work by the Center’s Task Force on Poverty.

The report offers a four-pronged strategy:

• Promote Decent Work: People should work and work should pay enough to ensure that workers and their families can avoid poverty, meet basic needs, and save for the future.
• Provide Opportunity for All: Children should grow up in conditions that maximize their opportunities for success; adults should have opportunities throughout their lives to connect to work, learn, live in a good neighborhood, and move up in the workforce.
• Ensure Economic Security: Americans should not fall into poverty at times when they cannot work or work is unavailable, unstable, or pays too little to make ends meet.
• Help People Build Wealth: All Americans should have assets that allow them to weather periods of flux and volatility and to have the resources that may be essential to upward economic mobility.

The Task Force recommends 12 action steps to advance this strategy. These recommendations fall across a broad range of policy areas, and include proposals to raise and index the minimum wage to half the average hourly wage (about $8.40), triple the Earned Income Tax Credit for childless workers and expand help to larger families, develop comprehensive strategies to reintegrate former prisoners into their communities, adopt the Employee Free Choice Act, modernize means-tested benefits, and expand and simplify the Saver’s Credit to encourage saving among low-income families. A number of the recommendations focus specifically on helping children and young adults realize their hopes and dreams. For example, the Task Force:

• Proposes that we revamp child care and early education. Working families need child care and all children need stimulating learning environments beginning at birth. Federal and state governments should guarantee child care support for families with incomes below about $40,000 a year, and it calls on states to improve the quality of early education and broaden access for all children.
• Outlines a comprehensive plan to help disadvantaged and disconnected young adults, aged 16 to 24. Currently 1.7 million poor or near-poor youth are out of school and out of work. The Task Force recommends that the federal government restore funding for Youth Opportunity Grants to help disadvantaged communities and expand funding for other effective youth programs to help reach 600,000 poor and disadvantaged young adults. It also proposes a new Upward Pathway program to offer low-income youth opportunities to participate in education and training in high-demand sectors such as health care and environmental protection.
• Calls on federal and state governments to renew their commitment to making higher education accessible and affordable. Lower-income students are less likely to attend college than higher-income students, even when controlling for ability. Public flagship universities are increasingly becoming “enclaves for the most privileged of their state’s young people.” Pell Grants have long helped low-income students pay for college, and the Task Force recommends that federal government simplify the Pell Grant application process, raise the maximum grants to cover more of the costs of attending college, and encourage institutions to raise student completion rates. It also calls on states to make post-secondary education affordable to all residents.

The Urban Institute found that a set of three of the recommendations in the report—the minimum wage, Earned Income Tax Credit and Child Tax Credit (which are combined in the report), and child care recommendations— would reduce poverty by 26 percent. It seems as though the 12 recommendations enacted together should be able to cut poverty in half.

The recommendations are not cheap— the Task Force estimates that the package will cost about $90 billion. But $90 billion is a tiny fraction of the nation’s economic output (0.8 percent of gross domestic product) and less than the costs of recent tax cuts for the rich. In fact, the revenue lost due to tax cuts for the top 1 percent of households, when fully implemented, is more than the cost of all the recommendations combined.

It is Washington’s cynicism, not the cost or a lack of ideas, that will hold us back. The city is changing, and it needs the voices of engaged young people to push it to go further. A number of individuals and groups— including Catholic Charities, Sojourners, Los Angeles mayor Antonio Villaraigosa, and New York City mayor Michael Bloomberg— have developed plans and launched campaigns to address poverty. Young people need to join in too. College students have been instrumental in advancing living wage campaigns, demanding fair wages for workers on campus, and calling for an end to extreme poverty internationally. If we band together, we can cut poverty in half in 10 years and end poverty in a generation.

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