Safety net does more to ease poverty than previously thought

By Greg Sargent, in The Washington Post

The Baltimore riots have re-ignited the ideological wars over the efficacy of government spending to alleviate poverty, with Republicans who want to slash the budget seizing on images of urban chaos to argue that federal anti-poverty policy has been an abject failure at accomplishing its own goal. Paul Ryan suggests dumping more cash into the bottomless pit otherwise known as federal spending on the poor will only produce the “same failed result.”

But a new study being released today finds that the federal safety net may actually be doing more to alleviate poverty than previously thought. Thestudy, from the left-leaning Center on Budget and Policy Priorities, uses a new statistical technique to measure the impact of federal programs on the poverty rate, correcting for what it says are defects in previous accounting methods.

The study’s top-line finding is that in 2012, federal safety net programs cut the poverty rate by more than half, reducing it from 29.1 percent to 13.8 percent and lifting 48 million people above the poverty line, including 12 million children. Previous accounting had put the reduction at less than half.

The study seeks to make an important addition to a debate that has long bedeviled researchers: How to measure the impact of government on poverty. Republicans like Ryan tend to use the official poverty rate to gauge it. But as Dylan Matthews details, this excludes the impact of non-direct-cash-transfer federal programs, such as Medicaid, food and rental assistance, and lower-income tax relief, making it a rather useless metric. As Matthews notes, if you use the census-based Supplemental Poverty Measure, which does factor in such programs, you find government has helped to lift substantial numbers out of poverty.

Read the full article from Washington Post here.