Friday, January 8, 2010

Recovery Act Protecting Millions From Poverty

The other day Bob from posted part of a report from the Center on Budget and Policy Priorities and it had some very interesting information.

First, let me remind everyone that the CBPP is a Non-partisan research and policy institute working on federal and state fiscal policies and public programs that affect low- and moderate-income Americans. So, like the Congressional Budget Office, (CBO) they do not have an agenda and it matters not which political party is in office.

There are charts and graphs at the site and the entire report can be accessed at their site.. I am just going to point out some highlights.. There are some very good things that need to be seen and read in this report. They need to be pointed out and I think should be shared with some of the wingnuts out there so they will shut up about the Recovery Act not doing anything good.

While the recession is expected to drive states’ poverty rates up for 2009, new analysis based on Census data shows that the American Recovery and Reinvestment Act of 2009 (ARRA) is keeping large numbers of Americans out of poverty in states across the country. In addition to boosting economic activity and preserving or creating jobs, the recovery act is softening the recession’s impact on poverty by directly lifting family incomes.

The Center’s analysis, which covers 36 states and the District of Columbia, examines the effect on poverty of seven ARRA provisions: the expansion of three tax credits for working families, two provisions that strengthen unemployment insurance assistance, a provision that boosts food stamp benefits, and a one-time payment for retirees, veterans, and people with disabilities.[1] Nationally, these provisions are keeping more than 6 million Americans out of poverty and reducing the severity of poverty for 33 million more. (These figures include both people whom ARRA has lifted out of poverty and people whom ARRA has kept from falling into poverty.)

These estimates are conservative. The seven provisions examined cover only about one-fourth of the recovery act’s total spending. The remainder of the act contains an array of provisions that also have an effect on poverty either through direct job creation or through increased spending (on areas such as education, health care, and housing) that leads to more consumer demand in the economy, which in turn preserves or creates jobs. The Congressional Budget Office has estimated that the legislation as a whole had increased employment by 600,000 to 1.6 million jobs as of September 2009 and is expected to boost employment by 900,000 to 2.3 million jobs by the fourth quarter of this year.[2]

Moreover, this analysis does not capture the full anti-poverty impact of the seven provisions it examines. It considers the provisions’ direct effects on the incomes of the families that receive added income or benefits as a result of these provisions, but not the provisions’ additional effects on the economy and private-sector employment. For example, increased jobless benefits or food stamps preserve private-sector jobs in a recession by enabling consumers to continue purchasing goods and services they otherwise could not have afforded. That additional spending, in turn, ripples through the economy, helping stores and companies to stay in business and avoid steeper layoffs and reductions in work hours, and thereby averts larger increases in poverty.

That is my emphasis.. I felt it needed to be seen and so I put it in bold.. I think that is the biggest part of this that needs to be told over and over. There is more..

Congress designed the recovery act to reach a wide spectrum of low-, moderate-, and middle-income Americans. Policymakers took care to include provisions that provide assistance to low-income families, not only because they stand the greatest risk of hardship during downturns but also because of evidence that they are the most likely to spend quickly whatever money they receive, thereby pumping more money back into the economy in a timely manner.

Our analysis considers seven of the act’s temporary provisions, totaling $205 billion over five years:

* a new Making Work Pay tax credit of up to $400 for workers ($800 for a couple) earning up to $95,000 ($190,000 for a couple);
* an expanded Child Tax Credit for lower-income working families with children;
* an expanded Earned Income Tax Credit, including increased tax-credit benefits for a working family with three or more children and for married families to lessen the marriage penalty the EITC can otherwise impose;
* additional weeks of emergency unemployment compensation benefits (paid after a worker’s 26 weeks of regular state unemployment benefits expire);
* an additional $25 per week for unemployed workers to supplement their unemployment benefits;
* a $250 one-time payment to elderly people and people with disabilities who receive Social Security, SSI, or veterans’ benefits; and
* an increase in food stamp benefit levels.

The state-by-state findings presented here build on a Center analysis released in September 2009, which focused on figures for the nation as a whole as well as five large states. Details of the methods used here are described in the appendices of that report. [3]

In brief, the analysis uses Census data to examine how these policy changes will affect family income and poverty status by state. The estimates start with data collected in March 2004, March 2005, and March 2006 through the Census Bureau's Current Population Survey. Data for three years are combined to increase the reliability of the state-by-state estimates.

We make three adjustments to these Census data. First, we correct the tendency of Census and other surveys to undercount receipt of certain public benefits, using the data and methods for making such adjustments that are reflected in the U.S. Department of Health and Human Services’ TRIM model. [4] Next, we adjust the data to approximate recent economic and demographic conditions in each state, including labor-market conditions and state population levels in April through June of 2009. Finally, we adjust the food stamp participation data to approximate actual food stamp participation levels by state in May 2009. For each family in the resulting data, we estimate the family’s 2009 income with and without the seven recovery act provisions.

The analysis considers a family to be kept out of poverty if its estimated income is below the poverty line without the recovery act provisions but above the poverty line with the provisions. We use a measure of poverty that adheres to National Academy of Sciences poverty measurement recommendations by including after-tax cash and non-cash income, while subtracting child care and work expenses and out-of-pocket medical expenditures.

We provide estimates for 36 states and the District of Columbia. For the remaining 14 states, our data are insufficient to show reliable results. [5] Given the uncertainty associated with using a sample of the population, we show a range of estimates for each state. This range can be substantial, particularly for states with the smallest survey samples. For example, estimates for Iowa range from 25,000 to 55,000 residents kept out of poverty, with our best estimate falling in the middle (40,000).

The end notes are important too..

End Notes:

[1] As explained below, data were insufficient to estimate the antipoverty impact in the remaining 14 states.

[2] Congressional Budget Office, "Estimated Impact of the American Economic Recovery and Reinvestment Act on Employment and Economic Output as of September 2009," November 2009; and letter from CBO Director Douglas W. Elmendorf to Senator Charles E. Grassley, March 2, 2009.

[3] See Arloc Sherman, “Stimulus Keeping 6 Million Americans Out of Poverty in 2009, Estimates Show,” Center on Budget and Policy Priorities, September 9, 2009 (appendices).

[4] Specifically, we correct the Census data for underreporting of food stamps, TANF, and SSI benefits using the data and methodologies to correct for underreporting that are used in the U.S. Department of Health and Human Services' TRIM model.

[5] For seven of these 14 states, we do not show results because of very small sample size. In addition, we checked to ensure that our predicted state-to-state distribution of ARRA benefits is generally consistent for each state with the actual distribution of benefits paid through October 30, 2009, as reported on the government website, We do not show results for another seven states because we determined that the state's share of benefits in our model differed by more than 10 percent from the state’s actual share of the benefits (due to random sampling error, the inability of our model to fully capture some complex program interactions, or other reasons).

There are charts on the web site and other facts you can read, I didn't want to post the charts, some times they are hard to see when we post them.. so thought the link would be best..

Please take the time to look at this and feel free to link to it, post it, share it or whatever you would like to do.. This needs to be shared and told.. the media is not covering this.. they would rather talk about how bad it is.. not the good things.

I hope you see that while not all the news is good, there are at least some things in the ARRA that did benefit a lot of people. We have heard so many times, it wasn't big enough, it wasn't targeted enough, it was all pork.. so on and so on.. This shows it was good for the ones who needed it most. That's the bottom line.

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