The Social Safety Net Kept Millions Out Of Poverty Last Year


Without social safety net programs such as Social Security, food stamps, welfare, unemployment insurance, and others, millions more people would be in poverty, according to latest supplemental poverty measure report from the Census Bureau.

The Census calculates a supplemental poverty measure (SPM) by taking various benefits and expenses into account, as well as geographical variety. That adjusted poverty rate was 16 percent in 2012, higher than the official measure of 15 percent.

The Census then breaks out the benefit of a variety of programs in reducing the rate. Social Security has the biggest impact, keeping 26.6 million people out of poverty and reducing the SPM poverty rate by 8.6 percentage points. Without it, the SPM poverty rate would be 24.5 percent.

SPM safety net programs

Refundable tax credits like the Earned Income Tax Credit and the Child Tax Credit keep 9.4 million people out of poverty and lower the rate by three percentage points. Children get an even greater benefit, as their SPM poverty rate of 18 percent would be 24.7 percent without the credits.

The Supplemental Nutrition Assistance Program (SNAP), or food stamps, keeps 5 million people out of poverty and reduces the rate by 1.6 percent. Housing subsidies lift 2.8 million people out of poverty, reducing the rate by 0.9 percent. Unemployment insurance keeps 2.4 million people from being poor and reduces the rate by 0.8 percent. The Women, Infants and Children program (WIC), Temporary Assistance for Needy Families program (TANF, or welfare), and Low Income Home Energy Assistance Program (LIHEAP) all keep hundreds of thousands of people out of poverty each.

But despite the good they do in alleviating poverty, many of these programs are under attack or suffering from budget cuts. Food stamps were reduced on November 1 and more cuts are likely to follow, with House Republicans pushing to gut the program by $39 billion over the next decade.

Sequestration has devastated many of them. Housing assistance took a $2 billion cut this year, which was estimated to mean 140,000 fewer families served by Section 8 housing vouchers and some even getting their vouchers revoked. The long-term unemployed, those out of work for 27 weeks or more, have seen their benefits reduced because of the automatic cuts. LIHEAP was estimated to be cut by $180 million this year on top of $1.6 billion in reductions since 2010, which could mean 400,000 fewer households getting assistance.

Sequestration will only cut deeper next year. But while some lawmakers hope to undo the cuts in the budget conference begun after the government shutdown, many Republicans have claimed the automatic cuts as a victory and a good way to reduce spending.