A Plan to Cut Poverty in Half
Thursday, April 26, 2007; 12:00 AM
For too many years, political leaders in both parties have had too little to say about poverty in America. There are some important signs that things are changing. Today, the House Ways and Means Committee will hold a hearing devoted to discussing solutions to poverty. It will be their fourth poverty-focused hearing this year, and it's clear that they want to do more than just talk.
Why now? The answer goes beyond last year's election returns. In 2006, New York City Mayor Michael Bloomberg created an Economic Opportunity Commission and charged it with developing strategies to expand opportunity and reduce poverty. The U.S. Conference of Mayors established a Task Force on Poverty, Work and Opportunity, led by Los Angeles Mayor Antonio Villaraigosa. In the faith community, Catholic Charities USA and Sojourners/Call to Renewal have launched poverty reduction campaigns.
This week, the Center for American Progress issued "From Poverty to Prosperity: A National Strategy to Cut Poverty in Half." The report is the result of the work of an expert task force over the past year. The task force was guided by new research finding that the annual cost to the United States of children growing up in persistent poverty is half a trillion dollars. It was also guided by the recognition that one quarter of U.S. jobs do not pay enough to support a family of four at the poverty line, and the number of families struggling to make ends meet far exceeds the number officially in poverty.
The task force calls for setting a national goal of cutting poverty in half in 10 years, and recommends steps to meet the goal. The goal is ambitious but attainable. We have had periods of dramatic poverty reduction in U.S. history -- in fact, poverty fell by 50 percent between 1959 and 1973.
The report offers a four-pronged strategy to accomplish the goal, centered around the need to promote decent work, provide opportunity for all, ensure economic security and help people build wealth. The report outlines 12 principal action steps. For example, it calls for restoring the minimum wage to 50 percent of the average wage -- about $8.40 in 2006. It calls for a dramatic expansion of the federal Earned Income Tax Credit and for efforts to connect the 1.7 million poor and near-poor out of school, out of work youth with employment and training. It notes that 600,000 prisoners are now being released to their communities each year, and calls for states and localities to do more to help former prisoners reenter their communities with stable employment. And it calls for addressing holes in the unemployment insurance system that have meant that only about one-third of the unemployed -- and far fewer unemployed low-wage workers -- receive benefits.
Other recommendations would help people move to communities with better job opportunities; expand child care, early education, and access to higher education; and increase tax-based assistance for families with children and lower-income workers saving for homeownership, education, retirement and children's needs.
Many low-income communities face higher prices for basic goods and services -- from tax preparation services and mortgages to cars and groceries. Thousands of low-income homeowners with subprime loans and exotic mortgages are now being pushed toward foreclosure. The task force calls on governments to address the foreclosure crisis and curb unscrupulous and predatory practices. It also recommends the creation of a Financial Fairness Innovation Fund to broaden access to mainstream goods and services in low-income communities.
Implementing the recommendations would raise employment and cut poverty. The Center for American Progress commissioned the Urban Institute to estimate the effects of raising the minimum wage, expanding the EITC and child tax credit, and increasing child care assistance. The analysis found that these steps alone would reduce poverty by 26 percent and help millions of other low- and moderate-income families. With the additional steps recommended by the task force, we can cut poverty in half.
Implementing these recommendations will not be cheap. But bringing better balance to the federal tax system and recouping part of what has been lost by the excessive tax cuts of recent years could easily pay for these policies.
The challenge before the nation is not that we don't know what to do: We have decades of research about successful, effective approaches. We simply must decide to act. We understand that some members of Congress prefer just to talk about the needs of the middle class. But that approach is short-sighted. Thirty-seven million Americans live below the official poverty line; tens of millions more struggle to make ends meet. A national strategy to cut poverty would lead to stronger families, stronger communities, and a stronger nation.
Mark Greenberg is the Executive Director and Elisa Minoff is a Research Associate for the Task Force on Poverty at the Center for American Progress.