Poverty

In a month, Congress's Joint Select Committee on Deficit Reduction, known informally as the Super Committee, will issue its recommendation on how to deflate the deficit by at least $1.5 trillion over the next ten years. In a year, Americans will go to the polls to select many federal, state, and local leaders. And in between these events, state capitals will tangle anew over shrinking revenues, burgeoning constituent needs, and balanced-budget dictates.

Where, in all of this, are America's 74 million children? What challenges and opportunities are posed by budget battles when we think about the dramatic changes in children's lives in recent decades -- almost 22 percent living in poverty, the trend toward "majority minority" among children, the regional shifts from northern states losing children to southern states gaining them? What will it take to come to national and state budget decisions that invest at the level needed for the youngest generation to succeed, especially in light of states' senior role in funding children's programs and services?

Author Derek Hyra talks about the revitalization of Washington, D.C.'s Shaw/U Street neighborhood-a once thriving cultural center for African Americans in the early 1900s that still bears the scars of riots after Martin Luther King, Jr.'s assassination in 1968. Hyra's upcoming book explores the area's recent comeback and lessons for reducing concentrated poverty in other city neighborhoods.

Child poverty generates serious long-term economic costs not only for those children (when they become adults), but for the U.S. economy as a whole. This paper argues that these long-term costs will rise because of the Great Recession, as child poverty rises substantially and remains elevated for years to come. Children growing in newly poor families, and/or those whose parents suffer permanent job loss, will likely have worse educational and employment outcomes. Those young people who enter the labor market during this period will suffer reduced earnings as well. This will impose fiscal as well as economic costs on the U.S. in the future. Investments to reduce child poverty in both the short and long-terms thus make economic sense for the U.S., despite the nation’s ongoing fiscal crisis.

Policymakers should be thinking hard about low-income families with children and the tax code. In 2010, the federal income tax system will deliver substantial assistance to these families through refundable tax credits. The Tax Policy Center estimates a third fewer children would be in poverty if tax credits were counted in a person’s available resources when measuring poverty. They are among the most potent anti-poverty programs for families with children. In 2011, some aid targeted to the poorest families will disappear as the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) and the American Recovery and Reinvestment Act (ARRA).

Strongly held but conflicting values have shaped the U.S. social safety net and the policy debates since its expansion in the 1960s. A new Urban Institute Press book disentangles these beliefs and shows how they have led to the patchwork of mostly uncoordinated programs the safety net is today.

A level of economic distress unknown for generations has prompted a major increase in federal domestic spending and an aggressive federal policy response with the American Recovery and Reinvestment Act. But what next? Experts will discuss the lessons learned during the recession, the performance of current programs, and the ARRA experience, and offer their views on the next steps to reduce poverty and economic distress for Americans.

George Galster explains how children are harmed by growing up in predominantly poor neighborhoods. He also recommends ways to improve federal and state housing programs to avoid high concentrations of poverty. George Galster is an Urban Institute Affiliated Scholar and the Clarence B. Hilberry Professor of Urban Affairs at Wayne State University.

The Internal Revenue Code has replaced traditional means-tested programs as the principal means for transferring income to low earners. The largest vehicle is the Earned Income Tax Credit (EITC), now supplemented by both the Child Tax Credit (CTC) and the Making Work Pay tax credit (MWP). This paper looks at the system's evolution, the important role played by the tax system in assisting low earners, and the complexities presented by the current approach. It offers principles to guide the design of a worker credit and child benefit that would replace the EITC, CTC, and MWP, along with a specific proposal.