Rise in Poverty Linked to Government Program Cuts

Reduced government programs lift fewer people out of poverty and the declining impact of those programs accounts for 30% of the rise in poverty since 1979 among families with children, a new study said Sunday.

The analysis of Census Bureau information by the Center on Budget and Policy Priorities found that in 1979, nearly one of every five families with children who would otherwise have been poor was lifted out of poverty by cash benefits such as Social Security, unemployment insurance or public assistance.

In 1985, however, only one of every nine families with children was lifted out of poverty by those programs, the study by the Washington-based research group on poverty issues said.

“Based on hard data from recent Census (Bureau) reports, the analysis demonstrates that the failure of most states to keep benefits up with inflation and the budget reductions made during the Reagan Administration have been a major factor in the increase in poverty since 1979,” said center Director Robert Greenstein.

“Had the programs continued to lift out of poverty the same proportion of families with children as in 1979, some 458,000 fewer such families would have been poor in 1985,” the report said.

The new analysis, the first to use 1985 poverty figures, tends to confirm earlier conclusions by researchers at the University of Wisconsin. They found reductions in benefit programs to be one of two principal factors in the large increase in poverty since the late 1970s, with the other being the performance of the economy.

In 1985, the poverty rate was 14% and 33.1 million people were in poverty. In 1979, the poverty rate was 11.7% and 26.1 million people were poor.

The Census Bureau, in reporting the 1985 poverty level, defined poverty as an annual cash income of less than $10,989 for a family of four and less than $8,573 for a family of three.

The newest study said that if a broader measure of poverty included non-cash benefits, the decline of effectiveness of anti-poverty programs would be even greater.