Medical Costs Drove 8 Million into Poverty Last Year

Plus, the case for giving Social Security to kids

Medical Costs Drove 8 Million into Poverty Last Year

The cost of health care is one of the top issues for voters heading into the 2020 election, and a report from the Census Bureau released week provides a good reminder why that’s the case.

According to the bureau’s supplemental poverty measure analysis for 2018, which takes a deep dive into the effects that government programs and various types of expenditures have on incomes and the poverty rate, medical expenses pushed about 8 million people into poverty last year.

Medical expenses, which include the costs of care, prescriptions drugs and insurance premiums, “were the largest contributor to increasing the number of individuals in poverty,” the Census said.

As Axios’s Caitlin Owens noted Monday, the numbers for 2018 actually represent an improvement over the last four years, when an average of 11 million people fell into poverty each year due to medical expenses.

The Case for Giving Social Security to Kids

US social welfare programs reduced poverty by about two-thirds overall in 2018, according to an analysis of Census data by Matt Bruenig of the left-leaning People’s Policy Project.

Bruenig offers a unusual analysis of the effectiveness of anti-poverty programs, in which he takes into account how far below the poverty line impoverished households are as a whole and measures how much of that gap is eliminated by the programs. This provides a more complete look at poverty reduction efforts, Bruenig says, by including the many households that see poverty reduced thanks to various government programs, even if their poverty is not entirely alleviated.

Using that method, Breunig calculates that poor families in the U.S. were $512 billion below the poverty line as a group in 2018, when measured in terms of market income. Once programs such as Social Security, the Earned Income Tax Credit and housing subsidies are taken into effect, the poverty gap dropped to $173 billion — a reduction of 66%.

Using the same approach, Bruenig also looked at how effective specific social programs were in reducing the poverty gap. For example, as you can see in the table below, Social Security’s retirement benefits shrank the poverty gap by 40%, while food stamps (Temporary Assistance for Needy Families, or TANF) shrank the gap by 1%.

Why it matters: Bruenig says the data show that the most effective anti-poverty programs are simple, and revolve around the distribution of cash benefits, while more complicated schemes involving tax credits are less effective. If the U.S. wants to reduce child poverty — and children are the most impoverished group in the country in Bruenig’s analysis — the most effective way would be to create a Social Security-like program that provides cash to households with children.

“Instead of these weak tax credits, we should follow the Social Security model,” Bruenig writes. “Just as Social Security already provides monthly checks to elderly people and disabled people, it should also provide checks to (the parents of) children. Social Security for kids would dramatically cut poverty and is the best path forward for welfare state expansion given our current welfare situation.”

Read Bruenig’s full analysis here.

Get Ready to Rumble! Funding Fights Loom Large in the Senate

The House is expected to consider a short-term stopgap spending bill this week to fund the government until shortly before Thanksgiving and avoid a government shutdown when the new fiscal year starts on October 1. But disagreements over full-year spending bills in the Senate could force lawmakers to consider a longer-term stopgap, known as a continuing resolution (CR), as well.

The Senate had held off on passing spending bills until lawmakers reached agreement on a two-year budget deal, which they did shortly before Congress left for its summer recess. The delayed process of passing appropriations bills to fund the government got off to a rocky start last week, waylaid by disagreements between Republicans and Democrats. “The impasse is throwing into question if senators will be able to get any of the fiscal 2020 bills through the chamber this month, a setback for Republicans who wanted to clear a major package before October,” The Hill’s Jordain Carney reports.

Senator John Cornyn, a Texas Republican, described the negotiations as “pretty fragile” and warned, “If they break down we’re looking at potentially a long-term CR.”

The Senate Appropriations Committee last week passed top-line spending numbers along with a $695 billion defense funding bill and a $49 billion energy and water funding measure. But the topline spending figures and the defense bill don’t have the Democratic votes they would need to pass the full Senate, Carney notes:

“Democrats are taking issue with the top-line figures, which break down how much money each bill will get, because they believe Republicans are padding extra money toward the homeland security bill. And they balked at supporting the Pentagon spending bill after Republicans rejected an amendment that would have prevented Trump from shifting money in the bill toward the border wall without congressional sign off.”

Senate appropriators are scheduled to consider fiscal 2020 bills covering Agriculture, Transportation-HUD and Financial Services this week, but lawmakers won’t yet take up the Military Construction-VA spending bill, which includes the contentious question of border wall funding.

Senator John Boozman, the Arkansas Republican who chairs the Military Construction and VA appropriations subcommittee, said last week he wants to include $3.6 billion for military base projects, according to Roll Call — money provided in past years that the Trump administration is redirecting toward border barrier construction. Democrats oppose such backfilling of funds diverted by the administration under the president’s declaration of a national emergency at the southern border.

Other funding fights still loom, as well. Carney notes that the Senate appropriators “have already punted both the bill for the departments of Labor, Health and Human Services, and Education and funding for the State Department over concerns that Democrats would try to insert abortion-related language into the bills.” And funding for the Department of Homeland Security — including Trump’s wall — “is considered so controversial that Republican senators say they aren’t sure that they will even bring the bill up.”

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RIP, Ric Ocasek.

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