Senior Director and Senior Fellow
As the House Ways and Means Committee holds a hearing today on empirical evidence for poverty programs, it’s worth recalling that safety net programs cut poverty nearly in half in 2013, lifting 39 million people out of poverty. The figures rebut claims that government programs do little to reduce poverty.
Our analysis of Census data shows that, in 2013:
Of the 39 million people, “universal” assistance programs such as Social Security and unemployment insurance, which are widely available irrespective of income, cut poverty by 19 million. “Means-tested” benefits such as rent subsidies, SNAP (formerly food stamps), and the Earned Income Tax Credit (EITC), which target households of limited means, cut poverty by another 20 million.
These figures use the federal government’s new Supplemental Poverty Measure (SPM), which — unlike the official poverty measure — accounts for taxes and non-cash benefits as well as cash income. (The SPM also makes other adjustments, such as taking into account out-of-pocket medical and work expenses and differences in living costs across the country.) Because the SPM includes taxes and non-cash benefits, it gives a more accurate picture of the impact of anti-poverty programs than the official poverty measure.
Other analysts have recently used SPM data to show the strong impact of poverty programs. For example,
If anything, these figures, understate the safety net’s impact. That’s because survey data miss a large share of safety net income due to underreporting by participating households, who often have trouble recalling benefits received months earlier or may feel embarrassed about receiving help.