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Robert Greenstein Iris J. Lav Board of Directors
David de Ferranti, Chair John R. Kramer, Vice Chair Henry J. Aaron Ken Apfel Barbara B. Blum Marian Wright Edelman James O. Gibson Beatrix Hamburg, M.D. Frank Mankiewicz Richard P. Nathan Marion Pines Sol Price Robert D. Reischauer Audrey Rowe Susan Sechler Juan Sepulveda, Jr. William Julius Wilson |
WHAT DOES THE SAFETY NET ACCOMPLISH?
Public benefit programs cut the number of poor Americans nearly in half (from 58 million to 31 million) and dramatically reduce the severity of poverty for those who remain poor, while providing health coverage to tens of millions of people who otherwise would be uninsured, according to a new report from the Center on Budget and Policy Priorities. The report is one of a series the Center is issuing that reviews recent research on the effects of public benefit programs, primarily “safety-net” programs aimed at low-income families and individuals. The reports, based on a broad range of government and non-government studies, are particularly relevant today as policymakers begin to consider possible budget reductions in some of these programs in September, when Congress is charged with producing “budget reconciliation” legislation. The first set of reports, issued today, cover Medicaid and the State Children’s Health Insurance Program (SCHIP), food and nutrition programs, the Supplemental Security Income Program for the elderly and disabled poor, and the Earned Income Tax Credit. Each report includes state-by-state data on the number of people assisted by that program. A separate Center report issued today examines the combined impact of the nation’s system of public benefit programs. Forthcoming reports will cover areas such as housing, child care, and child support enforcement. Poverty Cut Nearly in Half by Public Benefit Programs Research and data show that the U.S. system of public benefits — including programs targeted on low-income Americans (such as food stamps, Medicaid, and the EITC) as well as universal social insurance programs (such as Social Security, Medicare, and Unemployment Insurance) — have helped make millions of Americans healthier and more economically secure.
Taken together, these programs lift 27 million
people out of poverty. The programs also reduce the severity of poverty for
those who remain poor; they lift the average family income of those who are
poor from 29 percent of the poverty line to 57 percent of the poverty line.
Through Medicare, Medicaid, and SCHIP, the programs also provide health
insurance to tens of millions of people who otherwise would lack health
insurance.
Medicaid and SCHIP:
Improving Health, Saving Lives Medicaid
provides health care and long- term care to low-income families and
individuals, including children, parents, the elderly, and people with
disabilities. SCHIP supplements Medicaid by providing health care to
children with family incomes modestly above the Medicaid limits. The two
programs combined provide health coverage to more than 55 million Americans
during the course of a yea, including many of the nation’s most vulnerable
citizens. About 70 percent of Medicaid expenditures go for health care for
low-income senior citizens and people with disabilities. Without
Medicaid, the number of uninsured Americans — currently 45 million — would be
much higher. Many Medicaid beneficiaries either could not afford private
coverage or could not obtain private coverage at any price (such as many
people who have HIV/AIDS or permanent disabilities). Medicaid is
especially important at times when the need for health coverage increases,
such as the past several years. As the nation’s economy weakened and
employer-sponsored health insurance eroded, Medicaid (and SCHIP) enrollment
expanded in response, enabling many low-income people who lost
employer-sponsored coverage to maintain health insurance. An extensive body of research demonstrates
that by making preventive and primary care more available, and by protecting
against and providing care for disease, Medicaid has improved the health of
millions of Americans. For example, expansions of Medicaid eligibility for
low-income children have reduced childhood deaths. Expansions of coverage
for low-income pregnant women have reduced infant mortality, and the
availability of Medicaid has also increased the degree to which low-income
women receive preventive screening for breast cancer and cervical cancer.
Among adults with chronic diseases (such as heart disease, high blood
pressure, and diabetes), people covered by Medicaid are more likely to obtain
needed medication than people who are uninsured. Improvements
in health, in turn, can produce other benefits, such as better educational
opportunities for disadvantaged children. Children with Medicaid coverage
have been found to miss fewer school days due to sickness than uninsured
children. Moreover,
Medicaid provides health care at a lower per-beneficiary cost than
private health insurance, and Medicaid’s costs per beneficiary have been
rising more slowly in recent years than the per beneficiary costs of private
insurance.
Food and Nutrition Programs:
Reducing Hunger, Bolstering Nutrition Federal food
and nutrition programs — which include the Food Stamp Program, WIC (the
Special Supplemental Program for Women, Infants, and Children), and the
school lunch and breakfast programs — have largely eliminated severe hunger
in the United States, which was a serious problem as recently as the 1960s. Food
stamps.
Food stamp benefits, which are provided in the form of an electronic debit
card that can be used only to purchase food, average about $1 per person per
meal. Yet even these modest amounts are sufficient to cause significant
increases in household food expenditures and thus in the nutrients available
to low-income people. For millions
of low-income working families, food stamps are essential to making ends meet
each month. The income of a family of four headed by a full-time,
minimum-wage worker falls far below the poverty line unless the family
receives food stamps and the Earned Income Tax Credit. Food stamps
also help protect households and the economy from risk. If a parent loses
her job, food stamps can help her protect her children from going without
sufficient food until she is able to improve her circumstances. The program
also responds quickly and automatically to increased need during slow
economic periods, helping maintain overall demand for food by providing
benefits to a larger number of families. WIC and the
school meals programs.
WIC
provides low-income pregnant and postpartum women and their young children
with vouchers that may be used only for specific nutrient-rich foods, as well
as with nutrition education. The school lunch and school breakfast programs
provide free and reduced-price meals to schoolchildren from low-income
families.
A
large body of research has found that WIC contributes to healthier births, in
part by reducing substantially the incidence of low-weight births. That
improves health and child development, which, in turn, reduces health care
costs for both the government and the private sector. A review of the
research on WIC’s effects conducted in the 1990s by the Government
Accountability Office (GAO) concluded that because of WIC’s effects in
producing healthier births, each $1 spent on WIC for pregnant women generated
$3.50 in health-care savings over 18 years. WIC also has
been found to increase children’s intake of key nutrients such as iron and
thereby to reduce child anemia. In addition, the school meals programs have
been shown to improve children’s nutritional status significantly, and eating
breakfast has been found to have a positive impact on a child’s cognitive
development and school performance.
Supplemental Security Income: SSI improves
the quality of life for the elderly and individuals with disabilities who
have little income or assets by providing financial support, incentives to
attempt to work, and health care through Medicaid. (Receiving SSI generally
makes a person eligible for Medicaid.) With SSI’s help, many of
these people have been able to avert destitution and institutional care.
For example, SSI assists nearly three million people with severe mental
impairments, enabling many of them to live independently. SSI also
helps low-income parents meet the added financial costs of caring for a child
with a serious disability. SSI benefits
alone are not enough to lift someone above the poverty line, but when
combined with other benefits (such as food stamps), they lifted more than two
million people out of poverty in 2002. For millions of others, SSI benefits
reduce the depth of poverty.
The Earned Income Tax
Credit: Boosting Employment, Aiding the Working Poor The EITC
reduces tax burdens and supplements wages for working families with children
with incomes up to approximately $37,000. Also, some childless workers with
very low incomes are eligible for a much more limited EITC. One of the
EITC’s main achievements is rewarding low-wage work. Studies have shown that
the EITC has a powerful effect in substantially increasing the proportion of
single mothers who work and thus in reducing the number of people receiving
cash welfare. Recent
research also documents another powerful effect of the EITC: reducing
poverty. The EITC lifts more children out of poverty than any other single
program or category of programs. In 2002, the EITC lifted 4.9 million people
out of poverty, including 2.7 million children. Surveys show
that while many families use their EITC use to pay for necessities like
housing and food, some families use it for purchases that can help them
maintain or improve their standard of living, such as repairing a car needed
to get to work, making home repairs, and paying for education or job
training.
Programs Making Progress
Toward Widely Shared Goals “Evidence is
strong and persuasive that the low-income programs, while not perfect, have
made major progress toward goals shared by Americans across the political
spectrum, such as preventing hunger and destitution, protecting children’s
health, and rewarding low-paid work,” said Robert Greenstein, executive
director of the Center. “Each of these programs can be improved, and we
propose some improvements in our new reports, but that shouldn’t blind us to
these programs’ real accomplishments. Without these programs, ours would be
a harsher and less compassionate society with more extreme hardship,
especially among children and people who are elderly or have disabilities.” The reports
can be found at
https://www.cbpp.org/pubs/accomplishments.htm
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The Center on Budget and Policy Priorities
is a nonprofit, nonpartisan research organization and policy institute that
conducts research and analysis on a range of government policies and
programs. It is supported primarily by foundation grants. |