off the charts
POLICY INSIGHT
BEYOND THE NUMBERS
BEYOND THE NUMBERS
We are presenting evidence today at the Department of Health and Human Services’ annual Welfare Research and Evaluation Conference that, when it comes to keeping people out of poverty, the 2009 Recovery Act was probably the most effective piece of legislation since the 1935 Social Security Act. As we first described in a paper last November, six temporary stimulus initiatives that President Obama and Congress enacted in 2009 and 2010 kept 6.9 million Americans out of poverty in 2010.
The six provisions — three new or expanded tax credits, two unemployment insurance enhancements, and a SNAP (food stamp) benefit expansion — were originally in the Recovery Act, though President Obama and Congress later extended or expanded some of them.
The government’s official poverty measure counts only cash income. So, to see how these measures affected poverty, we used an alternative poverty measure that also considers the effect of government benefit programs like SNAP and tax credits. Most experts prefer this broader measure, which adopts recommendations of the National Academy of Sciences.
Specifically, we found that:
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- Expansions in the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) kept 1.6 million people out of poverty.
- The Making Work Pay tax credit, which expired at the end of 2010, kept another 1.5 million people out of poverty.
- Expansions in the duration and level of benefits kept 3.4 million people out of poverty.
- Expansions in SNAP benefits kept 1 million people out of poverty.
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