Poverty Rate Would Have Been Nearly Twice as High in 2012 Without Safety Net, New Census Data Show

Safety net programs cut poverty nearly in half in 2012, according to our analysis of Census data released today. The data illustrate the effectiveness of a broad range of government assistance programs, such as Social Security, rent subsidies, and tax credits for working families.

Earlier today, we highlighted the effects of two poverty-reducing programs, unemployment insurance and the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps).  In this post, we broaden our focus a bit.

Counting all government assistance programs, the poverty rate drops from 29.1 percent to 16.0 percent, according to a CBPP analysis using the Census Bureau’s Supplemental Poverty Measure (SPM), which accounts for taxes and non-cash government benefits.  The poverty rate for children drops from 29.8 percent to 18.0 percent after counting safety net programs (see chart).

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By considering taxes and non-cash benefits, the SPM gives a truer picture of the effectiveness of anti-poverty programs than the official poverty measure, which counts only cash benefits and other cash income.  Policymakers should keep this effectiveness in mind as the President and Congress negotiate budget and tax priorities for the coming year and beyond.  Deep cuts to these programs would make them less effective at reducing poverty and would push the poverty rate significantly higher.