Poverty and Financial Distress Would Have Been Substantially Worse in 2010 Without Government Action, New Census Data Show

Center on Budget and Policy Priorities, By Arloc Sherman, November 7, 2011

  • “Six temporary federal initiatives enacted in 2009 and 2010 to bolster the economy by lifting consumers’ incomes and purchases kept nearly 7 million Americans out of poverty in 2010, under an alternative measure of poverty that takes into account the impact of government benefit programs and taxes. These initiatives — three new or expanded tax credits, two enhancements of unemployment insurance, and an expansion of benefits through the Supplemental Nutrition Assistance Program (SNAP, formerly called food stamps) — were part of the 2009 Recovery Act. Congress subsequently extended or expanded some of them. To gauge the impacts of these initiatives on poverty, analysts cannot use the official poverty measure because it counts only cash income and does not take refundable tax credits, SNAP benefits, and other non-cash assistance into account. Therefore, we use a poverty measure that adopts recommendations of the National Academy of Sciences (NAS), and that most experts prefer to the traditional poverty measure. Using the NAS measure to analyze newly released Census data for 2010, we find that the six Recovery Act initiatives kept 6.9 million people above the poverty line in 2010…”
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