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Poverty to Prosperity

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1. The Great Recession has left behind the largest number of long-term unemployed people since records were first kept in 1948.
2. Large numbers of Americans are already poor.
3. The number of people living in poverty is increasing and is expected to increase further, despite the recovery.
4. The increase in poverty since 2006 has been greater among Hispanics and African Americans than among Whites, greater among children than among the elderly, and greater among female-headed households than other households. 
5. The ten states that have experienced the largest percentage point increase in the rate of poverty, since the onset of the Great Recession, are (in rank order) Florida, Nevada, Arizona, Michigan, Indiana, Ohio, California, Connecticut, South Carolina, and Minnesota/North Carolina/Wyoming (tied for 10th).
6. Since the onset of the Great Recession, the performance of the American “safety net” has been uneven. The entitlement programs, including the Supplemental Nutrition Assistance Program (SNAP – Food Stamps), Medicaid, and Unemployment Insurance have responded robustly to the Great Recession – as unemployment rose and incomes fell, eligibility and participation in the safety net increased. In contrast, other programs, such as Temporary Assistance for Needy Families (TANF) and federal housing assistance, have not responded as effectively to the depressed economic conditions.  Although it is more difficult to achieve fiscal control of entitlement programs that operate with mandatory spending, they have been the most responsive aspect of America’s safety net since the unexpected hardships of the Great Recession began.
7. While history is rife with examples of mismanagement and abuse of public funds used for a variety of government purposes, anti-poverty programs may be particularly vulnerable to being placed under the microscope, and perhaps subsequently at risk for budget cuts.  
8. The adverse effects of the Great Recession would have been much worse had recent policy initiatives not been enacted by Congress. The Obama administration and the Congress have responded with several policy initiatives aimed specifically at protecting the well-being of low-income Americans.  Among many actions, they include the 2009 federal stimulus package, which aimed approximately $240 billion of the $787 billion package at low-income populations;  a permanent expansion of child health insurance for families with incomes between 133% and 300% of the poverty line; tax cuts designed to assist low-income workers; and a provision prohibiting states from curbing Medicaid access until the new health care reform law supports a large expansion of Medicaid in 2014. As bad as the Great Recession has been for low-income Americans, it would have been much worse without these recent policy actions.    
9. The Federal government’s large yearly deficits are creating pressures for spending control that are likely to result in cutbacks of the safety net.
10. Due to fiscal pressures, states are already making cuts to the safety net, and more are likely in the next several years. With the 2009 stimulus package expired and revenues to state governments recovering slowly this year (due to the sluggish recovery), many states (from Washington and California to Michigan and Florida) are making cuts to unemployment insurance, temporary cash assistance, Medicaid benefits, and other services for low-income Americans. 

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