New Poverty Data Highlights The Stimulus Package’s Importance

The Census Bureau released its annual report on incomes and poverty today, which is the first comprehensive look at the effects of the first full year of the current recession. The Bureau found that the poverty rate has risen to an eleven-year high of 13.2 percent, with 39.8 million people in poverty (including 14 million children).

This is up from 37.3 million in 2007, and constitutes the highest number of people living below the poverty line since 1960. This new data also gives the full measure of poverty under the Bush administration, which was at 11.3 percent (31.5 million people) when he came into office in 2001. So the Bush years saw an additional 8.3 million people fall below the poverty line.


This report does not take into account the hemorrhaging of jobs that occurred in early 2009, when more than 700,000 jobs were disappearing each month, so these numbers are likely to rise even higher. And they would be headed higher still if it were not for the economic stimulus package that was passed in February.

The Center on Budget and Policy Priorities looked at seven of the stimulus package’s provisions and found that they alone will keep more than 6 million people out of poverty in 2009:

This analysis…examines seven of the recovery act’s provisions — two improvements in unemployment insurance, three tax credits for working families, an increase in food stamps, and a one-time payment for retirees, veterans, and people with disabilities — and finds that they alone are preventing more than 6 million Americans from falling below the poverty line and are reducing the severity of poverty for 33 million more. Those 6 million people include more than 2 million children and over 500,000 seniors.

These estimates also don’t include direct assistance provisions “such as increases in funding for medical services, Pell grants, child support collection, Temporary Assistance to Needy Families, and assistance to homeless individuals,” which will help ameliorate the poverty impact of the recession. These numbers should provide some food for thought for those conservatives advocating canceling the stimulus or redirecting it towards debt reduction.