5 questions every presidential candidate should answer on poverty

Any serious discussion among 2016 presidential candidates must address the issues facing low-income Americans. Despite the paucity and poor quality of our available data, there are certain facts about domestic need which any president should understand, and certain leadership questions that each candidate should be able to answer. Here are five:

 How has the government’s social safety net performed in the fight against poverty?

America’s safety net is both a failure and a success. By one measure, poverty has barely budged since the War on Poverty of the 1960s. Recently released data show that the official poverty rate was 14.8% in 2014, only slightly below the 15% in poverty in 1970. And this is despite large increases in federal spending on anti-poverty programs.  Spending on these programs has increased almost tenfold in constant dollars since the early 1970s and increased from 1.0% of GDP in 1972 to 3.8% in 2012, according to the Congressional Budget Office (CBO).

But the official poverty measure does not take into account much of this increased spending. It primarily counts market income (income from earnings and investments), as well as cash-based government benefits (such as Social Security). But it does not include non-cash or tax-based transfers, such as SNAP, the EITC, or housing assistance. As a result, the official measure reflects the extent to which families are earning their way out of poverty, but fails to provide a complete picture of material well-being.

When considering a measure that includes these government resources, poverty has declined quite dramatically. According to a report from Columbia University, child poverty has been cut by one-third since the early 1990s when government programs are factored in.

Where does this leave us? If helping people achieve self-sufficiency and be free of government assistance is the goal, the safety net has largely failed. But if reducing material hardship is the goal, it performs well. Ultimately, government should be working toward both goals, which means increased efforts to help people earn their own success.

 What should be the priority areas for government in the fight against poverty?

The federal government has an important role in helping people in poverty. One of the most important contributions is supporting a strong economy. While it is true that more jobs can’t solve poverty for every family, too many people who could be in full time employment are not. Developing federal policies that support job creation (and access to jobs) rather than policies that reduce employment will help families earn their way out of poverty. Reforming the tax code to better incentivize job creation would be an important first step.

Government can also help families earn their way out of poverty through effective education and job training programs. Too much is currently spent on programs that have little evidence of success. Only one in five students who attend a public community college complete a 2-year degree. Similarly, evaluations of government-funded job training programs are mixed, ongoing, or unclear. Participants in these programs need credentials that will benefit them in the labor market. Increased education reduces poverty, but access alone won’t work. Increased support for programs that have proven success is needed, while programs and policies that have limited success need reform.

Finally, government should maintain spending and support to reduce economic hardship among families who are unable to earn their own way out of poverty. Research shows that government programs that provide resources to low-income working people (e.g., the EITC, child tax credit, SNAP, and housing assistance) substantially reduce poverty, especially among children.  Providing a basic level of material support to low-income American families is an important role for government.

 Aren’t other institutions, outside of government, better suited to help people in poverty?

Traditional government safety net programs relieve material hardship among poor families. But government programs can’t reduce poverty alone. All of us – in our personal lives and in the institutions of civil society – have a role.

Arguably the most important institution in the fight against poverty is marriage and the family. In general, unmarried families are more likely to be poor than married, two-parent families. Many factors play a role, but marriage is a critical component. Typically, less income comes into unmarried households and single parents have less time and fewer resources to devote to their children. As a society, we should be honest about the benefits of marriage, re-position it as the best way to raise children, and support all families in their efforts to benefit from it.

US President Barack Obama takes part in the Catholic-Evangelical Leadership Summit on Overcoming Poverty at Georgetown University in Washington May 12, 2015. REUTERS/Kevin Lamarque.

In addition to family, innovative programs outside of government (or in partnership) may be better positioned to help poor people earn their way out of poverty and be effective complements to traditional safety net programs. For example, social enterprises have increased employment among hard to employ populations. These are programs in the private sector that function as businesses and employ vulnerable populations as a way to move them into the broader labor market. In addition, pay for success programs (or social impact bonds) are currently being studied in the US as a way to help low-income populations. These programs engage private investors and government only pays investors when certain outcomes are achieved.

Other promising approaches out of the private or non-profit sector involve workforce development efforts that focus on executive-functioning for low-skilled women and programs focusing on behavioral interventions (“nudges”) within workforce development agencies, as well as traditional cash welfare agencies.  Evaluation efforts are also ongoing to study career pathway programs that partner with colleges and universities, as well as transitional jobs in the private sector for low-income workers.

New and innovative approaches from outside of government can play a critical role in reducing poverty.

 Shouldn’t we be doing more for men since they are struggling in the labor market?  

Much attention has been paid to the declining labor force participation of men and their stagnating wages. These are important issues, and addressing them deserves priority status by the next President. Increasing the childless earned income tax credit (EITC) for low-income men has gained bipartisan support, but there are other ways to address the concerns around men as well. Reforming our criminal justice system with a focus on re-entry, improving high school graduation rates, improving job training programs, and increasing the focus on family are all important.

But these efforts for men should not take away our focus from low-income children. Children (especially young children and those in single-mother homes) still have the highest poverty rates among any age group, even when factoring in the government benefits that they receive. The importance of early childhood education has gained increasing attention in recent years, with much debate over the best ways to serve young children. But most agree that investments in our children through early childhood programs can be worthwhile and should be a focus in coming years.

Increased work supports for families with children, such as increased child care assistance, also need attention. The current child care assistance system for low-income families serves less than 20% of eligible families and does not match the current realities of the low-wage labor market. Increasingly low-income mothers work in jobs that require nonstandard work hours or inconsistent schedules, making full-time employment and child care difficult. Reforms to the current child care assistance system that better meet the realities of low-wage work can increase employment and reduce poverty among low-income families.

  Why does the government have so many anti-poverty programs that seem to cost so much and what should be done about it?

According to a recent Government Accountability Office (GAO) report, 82 federal programs (including tax expenditures) exist for low-income families in the United States. Even though almost 65% of federal expenditures are concentrated in four programs – Medicaid, the Supplemental Nutrition Assistance Program (SNAP), the Earned Income Tax Credit (EITC), and Supplemental Security Income (SSI) – the sheer number of programs raises questions about whether programs can be held accountable.

These programs have evolved over time to meet particular needs of low-income Americans. But most have not been evaluated and little is known about their effectiveness. Similarly, little is known about how much administrative duplication and inefficiency is created by such a large number of programs.  This suggests that a review of the size and structure of the social safety net is needed. With a system of 82 programs, opportunities to reduce costs by eliminating redundancies, avoiding administrative duplication, and streamlining operations seem likely.

The GAO report also highlights the outsized role that Medicaid plays in safety net spending by the federal government. Almost $2 of every $5 spent on these programs is for Medicaid, which is 3.6 times more than the next biggest program, the Supplemental Nutrition Assistance Program (SNAP). And the $287 billion spent by the federal government on Medicaid (FY 2013), is more than the total federal share of 74 other programs together.

Achieving significant savings in means-tested programs for low-income populations must involve Medicaid cost controls, which includes a particular focus on how the elderly and disabled are covered. According to a report by the Kaiser Family Foundation, two-thirds of Medicaid spending is on the elderly and the disabled, even though they make up only one-quarter of Medicaid enrollees. The report also showed that 5% of enrollees account for 53% of expenditures. Focusing efforts on controlling these costs is critical for the future health of Medicaid and other safety net programs.

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