Report: Recovery Act Kept 4.5 Million People Out Of Poverty

This week, the Census Bureau released an alternative measure of poverty making 2009’s ugly poverty numbers look even worse. According to the Bureau, “the number of poor people in the U.S. is millions higher than previously known, with 1 in 6 Americans — many of them 65 and older — struggling in poverty due to rising medical care and other costs.”

Under this alternative measure — which economists say is more accurate as it encompasses medical, transportation and work expenses, among other changes — the poverty rate is 15.7 percent. However, the data also shows that various government programs kept the poverty from being much worse. For instance, “without the earned income tax credit, the poverty rate under the revised formula would jump from 15.7 percent to 17.7 percent. The absence of food stamps separately would increase the poverty rate to 17.2 percent.”

In fact, according to an analysis of the data by the Center on Budget and Policy Priorities, the American Recovery and Reinvestment Act (i.e. the stimulus) alone kept 4.5 million people out of poverty:

1.3 million people through extensions and expansions of federal unemployment benefits;


1.5 million people through improvements in the Child Tax Credit and Earned Income Tax Credit;

nearly 1 million people through the law’s new Making Work Pay tax credit; and

700,000 people through an increase in benefit levels for the SNAP program (previously called food stamps).

According to the Congressional Budget Office, the Recovery Act helped provide work for about 3.3 million people (while enabling another 1.5 million people to find full-time work instead of part-time), in addition to keeping millions from falling into poverty. Still, this week, a spokesman for Speaker of the House John Boehner (R-OH) was deriding the Recovery Act as “the ‘stimulus’ that didn’t work.”