Americans in Poverty at 12 % Thanks to Safety Net
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The Fiscal Times
December 10, 2013

There was a time when House Budget Committee Chairman Paul Ryan was the Grim Reaper of government social safety net programs.

The 2012 GOP vice presidential nominee first made his name in Washington by rolling out a series of tough plans designed to repeal much of the Affordable Care Act, overhaul and slash spending for Medicare, Medicaid, food stamps and other social and welfare programs.

Related: How Paul Ryan Would Erase Obama’s Social Contract

“The safety-net system created in the last century is in dire need of a new round of reforms,” Ryan said in the fiscal 2013 budget blue print he unveiled in March 2012. “Republicans, Democrats and independents all believe in a sturdy safety net for those who, through no fault of their own, have fallen on hard times. The debate is over how best to strengthen and improve it. In particular, it is essential to prevent benefit structures from becoming barriers to upward mobility.”

Tens of millions of Americans have turned to these safety net programs in recent years as they weathered one of the worst recessions of modern times. But Ryan contends that Medicaid health services for the poor and other programs are growing at an unsustainable rate and must be curtailed. “We don’t want to turn the safety net into a hammock that lulls able-bodied people to lives of dependency and complacency, that drains them of their will and their incentive to make the most of their lives,” he said.

Now, with his eyes on a possible presidential bid in 2016 and growing public resentment of congressional partisan gridlock, Ryan has shifted his emphasis from fantasy budgeting to political realism.

When he and Democratic Senate Budget Committee Chairwoman Patty Murray   began fresh budget talks in October, after a 16-day government shutdown, the two negotiators made a critical decision not to seek structural changes in any of the costly entitlement programs or an increase in tax rates.

Ryan early on acknowledged the futility of seeking a “Grand Bargain” of entitlement and tax reforms to address the long term debt, with Democrats opposed to major tinkering with Medicare, Medicaid and Social Security and Republicans opposed to any tax rate increases to increase spending.

In short, most of the strands of the social safety net would be protected—at least in this latest round of budget talks.

Related: Congress’s Last Chance to Avoid a Fiscal Disaster

As those budget talks come to a head this week, a new study by a group of academic researchers at Columbia University concluded that government programs such as food stamps, enhanced unemployment insurance and tax credits for the poor have had significant success in easing the plight of the poor in the half century since President Lyndon B. Johnson first launched his war on poverty.

The new research, reported on Tuesday by the Washington Post, the social safety net helped reduce the percentage of Americans in poverty from 26 percent in 1967 to 16 percent in 2012. The research contradicts decades of government reporting suggesting that there has been no real decline in the percentage of Americans suffering from poverty since passage of Medicare and Medicaid and other Great Society programs in the mid-1960s. 

Until three years ago, the U.S. Census gauged poverty on a limited measure of income and expenses. Now it takes into account the full range of the poor’s expenses,  including health care, transportation, child care and other work-related costs, as well as  the full array of government assistance programs available to them, such as housing subsidies, school lunch programs and tax credits.

“If we're measuring poverty in a way that doesn't actually capture some of the main things that we do to fight poverty in this country, then, of course, you're going to be able to tell a story that we fought a war on poverty and poverty won,” Christopher Wimer, one of the principal researchers, told National Public Radio this fall.

The benefit of the social safety net was most strikingly apparent throughout the Great Recession of 2007 to 2009, when the poverty rate barely budged despite the massive increase in unemployment, the Post noted. The poverty rate increased more during previous economic downturns, including the 1990 recession.

While government programs have helped keep poverty at bay, the researchers found, the economy by itself has failed to improve the lives of the very poor over the past 50 years.

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Washington Editor and D.C. Bureau Chief Eric Pianin is a veteran journalist who has covered the federal government, congressional budget and tax issues, and national politics. He spent over 25 years at The Washington Post.