Chairman Price, Ranking Member Van Hollen, and other distinguished members of the committee, thank you for the opportunity to testify today on how to best help Americans living in poverty.
In my 18 years of experience in New York City and New York State administering many of our nation’s major safety net programs, I found that the best strategies for fighting poverty and increasing opportunity focus on the importance of work and family. In New York, we were most successful at fighting poverty when we maintained the proper balance of strong work requirements and government assistance that supported – but did not replace – work. We also were unafraid to talk honestly about both the consequences of raising children in single-parent households and the responsibilities for parents, including fathers, which come with raising a child.
My testimony today will be about how focusing on work and family can help poor Americans and reduce poverty, and on what Congress can do to improve our nation’s safety net programs to help more vulnerable Americans move up.
I will lead with my summation:
I. New statistics reveal that poverty rates remain elevated compared to the past 20 years.
II. These disappointing poverty numbers have been partially caused by a decline in work.
III. Another reason low-income families are struggling is the breakdown of the two-parent family.
IV. Improvements to some of our most vital safety net programs could help address these issues:
a. Supplemental Nutritional Assistance Program
b.Temporary Assistance for Needy Families
c. Child Support Enforcement
d. Supplemental Security Income
e. Earned Income Tax Credit
V. Conclusion
I. Low-Income Americans are struggling to earn success and move up.
The Census Bureau report on poverty released last month was extremely disappointing for all who care about the well-being of low-income Americans. The economic recovery began back in 2009, yet this report showed that 46.7 million Americans still lived in poverty in 2014. The official poverty rate, now 14.8 percent, remains two full percentage points above what it was in 2007 and three and a half percentage points above rates seen in 2000. If the poverty rate in 2014 had been the same as in 2000, nearly 11 million fewer Americans would have been in poverty. Moreover, the poverty rate for black Americans is 26.2 percent – 3.7 percentage points higher than in 2000.[1]
The combination of the passage of the Personal Responsibility and Work Opportunity Reconciliation Act, or welfare reform, in 1996, the expansion of the earned income tax credit, and a strong economy led to dramatic reductions in poverty in the 1990s. Unfortunately, as Figure 1 shows, we have lost those gains. As I’ll argue in Section II, this unfortunate and disappointing reversal is, in part, the result of our safety net programs not encouraging work strongly enough.
Figure 1
While the recent trend shown in Figure 1 is disappointing, and suggests that the federal government’s approach in fighting poverty has become less effective since the late 1990s, I cannot say that our antipoverty programs do not do some good. More accurate measures of poverty that take into account all that government does to help poor Americans, such as the Supplemental Measure produced by scholars at Columbia University or the consumption poverty rate produced by Bruce Meyer and James Sullivan, indicate that government programs substantially improve material well-being, especially for those who work.[2] In 2013, the poverty rate for female-headed families with children would have been 47.6 percent if based on earned income alone, but by adding in government benefits, their poverty rate fell to 29.2 percent.[3]
While we should celebrate this material impact, Americans want a safety net that does more than just make poverty less painful. We want to help people move up and no longer have to depend on government assistance to provide for their families. We aspire for low-income Americans to be able to earn their success and experience upward mobility. In these areas, our antipoverty programs’ performance is not good enough. The official poverty measure in Figure 1, by leaving out much of what government does to help the poor, focuses on what low-income Americans are able to earn for themselves. By this measure, we have lost substantial ground compared to the recent past, and progress over the last few years has been minimal.
Data on upward mobility are also discouraging. All Americans should be disappointed that equal opportunity is not a reality. As documented by a Pew Charitable Trusts study in Figure 2, the children of poor kids are disproportionately likely to get stuck at the bottom of the income ladder. Children from middle quintile families wind up in the bottom quintile as adults 14 percent of the time, while kids from bottom quintile families remain stuck in at the bottom of the income distribution 43 percent of the time.[4] And a recent study from Raj Chetty found that someone born in 1971 in the bottom fifth of the income distribution had only an 8.4 percent chance of reaching the top quintile.[5]
Figure 2
The fact that poor Americans are struggling to such a great extent to support themselves with earnings and that we have yet to achieve our ideal of equal opportunity for all compels us to find ways to do better.
1 Carmen DeNavas-Walt and Bernadette D. Proctor, “Income and Poverty in the United States: 2014,” US Census Bureau (September 2015), http://ift.tt/1JbUrl0. (Tables 3 & B-1).
2 Christopher Wimer, Liana Fox, Irv Garfinkel, Neeraj Kaushal, Jane Waldfogel, “Trends in Poverty with an Anchored Supplemental Poverty Measure,” Columbia Population Research Center (2013), http://ift.tt/1gZTIbz; Bruce Meyer and James Sullivan, “The Material Well-Being of the Poor and the Middle Class Since 1980,” AEI Working Paper #2011-04 (2011), http://ift.tt/1KAXPGP.
3Thomas Gabe, “Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013,” Congressional Research Service (2014), http://ift.tt/1MjpVux. (Table C-11).
[4]Pew Charitable Trusts, “Pursuing the American Dream: Economic Mobility Across Generations,” (2012), http://ift.tt/1WkW9YM. (Figure 3).
[5] Raj Chetty, Nathaniel Hendren, Patrick Kline, Emmanuel Saez, and Nicholas Turner, “Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility,” National Bureau of Economic Research Working Paper (2014), http://ift.tt/1cv9k9u.
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