Poverty Rate Would Be Nearly Twice As High Without Government Programs


Were it not for a broad range of government programs meant to reduce poverty by providing assistance to low-income Americans, the poverty rate in the United States would be nearly twice as high as it is today.

The rate currently stands at 15 percent, a generational high. Without programs like Social Security, the Supplemental Nutrition Assistance Program, and low-income tax credits, it would rise to nearly 30 percent, as this chart from the New York Times shows:


CREDIT: New York Times

No program has a larger impact on poverty than Social Security, which reduces the poverty rate by 8.5 percentage points, according to Census data. Low-income tax credits shave another 3 points off the rate; SNAP, commonly known as the food stamp program, cuts another 1.6 points. Other programs, including unemployment insurance, housing subsidies, Temporary Assistance for Needy Families, and the WIC program, cut anywhere from 0.1 to 0.9 points off the rate.

Despite their effectiveness at reducing poverty, many of these programs aren’t as effective as they could be thanks to reforms and budget cuts. Since “welfare reform” in 1996, TANF is less successful at getting assistance to those who need it than its predecessor. Washington’s focus on reducing deficits rather than combating unemployment has meant cuts to SNAP and housing subsidies. And the federal unemployment insurance program expired at the end of 2013, meaning 1.3 million Americans will go without assistance on which they rely unless Congress reauthorizes the program.