Just How Effective Are Government Programs at Reducing the Poverty Rate?

Written by Travis Waldron

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.

This post was originally published in ThinkProgress

Photo credit: Thinkstock


Eric Lees
Eric Lees2 years ago

Wall Street is wealthy because the FED is giving them easy money. Our whole economy is built on debt. How do we get out of the debt burden?

Your confusing tax loop holes with low taxes, the loop holes and deductions benefit the largest corporations that can afford to have an army of accountants. GE's tax return was thousands of pages.

What country has little or no tax? Yes it's pretty sad with the massive tax burden we have and we still have a decaying infrastructure.

You can not force companies to bring jobs back to the USA. Either we lower the burdens or we have a lower standard of living.

And FYI most of the richest people in the world adjusted for inflation were born before the civil war.

Sorry it's late so I only had time for a quick reply.

Robert Hamm
Robert Hamm2 years ago

HAHAHAHAAHAHA You are going to go back to 193 gto find when the contry was the best???

The country was even more financially divided back then, than it is NOW!!! Taxes are NOT whats hurting us. Other countries have little to no taxes and thats why their people suffer. Lower Taxes will fix NOTHING…… we already have low taxes on the wealthy. The welathy are wealthir than they have ever been. There is NO shortage of money in our country. Profits are up and they are huge. However NOTHING is trickling down. The rich have recovered ALL the money they lost during the last financial collapse we had. They MORE than made up for it.

BUt they are doing NOTHING at all to rebuild the rest of the country. The money is not being put to any use unless it enriches them even more. Meanwhile the infrastructure of our country is decaying. If I thought taxing the rich less would help I would be all for it….but I see NO way for that to work now. WE cant tax as low as the 3rd world countries unless we want to BE a 3rd world country. Corprorations are richer and more pwerful than they have ever been in history.
I see NO tenency in the rich to share in any way the riches they have created for themselves.
ALL we have done is EXPORT PRE 1913 labor practices to the rest of the world now. They can no longer enslave US so they will go somehwere else tto do it.

Eric Lees
Eric Lees2 years ago

I think your the one missing the point Robert not I, look at the big picture. We can not sustain our trade deficit that we have been running for 40 years. Our economy would have collapsed long ago were it not for the rest of the world putting their faith in the all mighty dollar as their reserve. This has allowed us to live on the backs of their labor.

Global companies manufacture things where ever they can get the most bang for their buck. Yes wages are a huge part so are taxes, regulation, workforce availability, logistics, political stability among other things. Look at what is still built in the USA. It's mostly cars which are big and bulky to ship.
Our government even discourages global companies from investing foreign profits back into the USA by taxing them something like 35%.

Something has to give. We can shift taxes away from discouraging jobs to discouraging consumption. Or we lower wages. I would prefer to restructure the tax code rather than lower wages to bring jobs back.

Mary, and that is the problem. The money is controlled by a few elite families rather than the people. We should not have to depend on the government.

Eric Lees
Eric Lees2 years ago

@ Robert
"There is a REASON this is a wonderful place to live. WE spend the required money to keep our country this way. The rest of the world does NOT. The answer isnt lower taxes."

I think you left out a key word there Robert "was" This was the greatest country in the world, the land of opportunity. But a lot has changed since then, we did have low taxes and small government. How much was the income tax before 1913?

"Thats why we have a two party system……..so its not just the corporate class thats happy."

How's that 2 party system working for us Robert? When both parties support the FED control of the money and wall street they are one and the same.

Mary B.
Mary B2 years ago

Well, I see this debate is still going on and it's still cycling back thru deservability issues and shrinking government and the absurd assumption that government programs create dependency on the government. Here's the reality: People always will be dependent on food, water, shelter, ect.The government did not create that. It's a state of being human.The government controls access to those things thru the money supply, whether it goes to banks or safety net programs. WE ARE ALL DEPENDANT ON THE GOVERNMENT for supplying the culture with the money supply.Now, do you want this money supply to keep going to the banks to lend to you which they won't do if you aren't making enough money to pay it back?Do you want to lose everything you've worked for if your job dries up? Or you become injured or ill? Or do you trust yourself enough to accept a living wage stipend every month without thinking you'r going to get lazy? And remember, this money would not be disapearing into a black hole somewhere. It would be circulating in the economy, doing the same thing that job wages would do.Can you finaly understand this would expand your freedom to make a better life for yourself, not make you 'dependant on the government'. That is old propaganda programing. You may not like what some people do with their money. It's none of your business.

Robert Hamm
Robert Hamm2 years ago

All these companies over in the 3rd world countries now all became HUGE companies here in this land of HIGH TAXES and "too much regulation". OF COURSE they want less of each……..
But there is a price to pay for living in this wonderful country. IMMENSE Profit is NOT the most important thing. Yes it is important……..but its not the ONLY thing thats important.

if you want to have all these things you and other seem to champion then go live in the countries that HAVE them. YOu will be wanting to come back very quickly is my bet.

Robert Hamm
Robert Hamm2 years ago

You are missing the point. Jobs didnt leave our country becuase of taxes. Jobs left our country for two reasons. Instead of paying 10 dollars an hour ofr workers they now pay 10 dollars a WEEK or even less. On top of that they lock the workforce into compounds and moblize them at any time of night or day they need them. if you dont get 8 hours od sleep a night touch vcrap we have schedules. In other words Eric slave labor. THATS why the jobs are in China. Increddibly low wages and absolulty NO worker rights of any kind whatsover. The otherr part is they can pollute to their heats content over there. They do NOTHING to keeep the air breathable. INcredily low taxes is the 3rd thing is increibly low taxes. If we do that here we will end up like the 3rd world countries with low or no taxes. There is a REASON this is a wonderful place to live. WE spend the required money to keep our country this way. The rest of the world does NOT. The answer isnt lower taxes. The answer is making revisions in the trade agreements so te corporations do not have such an incredible incentive to offshore everything but their profit. he answer is to not let htme keep their profit offshore. The answer is to not give them tax breaks for these practices. Its all well and good to speak conservative principles. But when they hurt the country its time to temper them. Thats why we have a two party system……..so its not just the corporate class thats happy.

Eric Lees
Eric Lees2 years ago

@Robert That's better, I can at least address your comments in your latest post.

Lower taxes allows people to keep more of their hard earned money and allows more jobs to be created here rather than elsewhere. A tax discourages an activity like the sin tax on cigarettes. We need to shift taxes away from discouraging jobs to discouraging consumption hence a national sales tax.

The path we are on with huge government and debt will push us towards a 3rd world country as more of our money goes to pay the interest on the debt and government. No matter how you slice it we can not sustain the path we are on. Our economy is on life support being feed easy money from the FED which may feel good in the short term but in the long run leaves us worse off.

Yes China has a huge pollution problem as did the USA when it was in an industrial revolution. Most of our pollution has either came directly from the government or from the government limiting the liability of the polluter. We need smarter regulation and stronger individual property rights to protect the environment rather than regulation that benefits the largest corporation while creating barriers to entry to competition.

Robert Hamm
Robert Hamm2 years ago

I missed nothing in your post Eric. I pointed out why your solution wontt solve tthe problem.

Lower Taxes will make us Live like the countries that have lower Taxes…..like the 3rd world countries. Lower wages will cause us to live like 3rd world countries becase we have no money to live on.. less regulations will create the smog and pollution like China has……which is BTW so bad it is beginning to reach our western shores. Becoming a 3rd world nation to attract jobs back to our country is not the answer. Your inablitlity to understand my posts doesnt make them rants.

Eric Lees
Eric Lees2 years ago

If the war on poverty was working we would see a decrease in poverty in the USA rather than poverty levels that have remained relatively unchanged.

@Robert Now that your rant is out of the way Robert are you ready to have a real discussion?
You completely missed everything I said and went off on some tangent.

@Mary Your rant is not making much more sense than Robert's. Where does government get it's money. More people are poor and dependent on government as a result of government not a lack of.