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Tuesday, July 19, 2005

Your Tax Dollars at Work

The Great Society has room to improve, but government programs to reduce poverty are much more effective and far less expensive than you might have heard:

In Defense Of Success - Government Really Can Lessen Poverty, By E. J. Dionne Jr., Washington Post:  … the Center on Budget and Policy Priorities, the estimable liberal organization, will release a series of studies showing that programs aimed at lifting up Americans with low incomes actually do what they say they do. The reports reflect a growing recognition on the part of progressives that after years of playing defense against conservative claims, it is time to go on offense.  The fact is that every year 27 million Americans are lifted from poverty by our system of public benefits. More than 80 million Americans receive health insurance through a government program -- Medicaid, Medicare or the State Children's Health Insurance Program, known as SCHIP. Without these programs, tens of millions would be unable to afford access to medical care. As the center notes, government programs reduce both the extent and the depth of poverty.

Does all this cost a fortune? Not by any fair reckoning. Federal spending on Medicaid and SCHIP represents 1.5 percent of gross domestic product. Federal financing for the rest of the low-income programs consumes just 2.3 percent of GDP. For a sense of comparison, consider that defense spending consumes 4 percent of GDP and interest on the national debt gobbles up 1.5 percent. President Bush's tax cuts -- which go in large part to the wealthiest Americans -- will consume roughly 2 percent of GDP.

And federal spending for the poor does a huge amount of good. Food stamps, the center notes, "help more than 25 million people with low incomes afford an adequate diet." The school lunch and breakfast programs provide free and reduced-price meals to 22 million schoolchildren from low-income families. The supplemental nutrition program for women, infants and children known as WIC helps about 8 million pregnant and postpartum women and their children under 5. One of its effects has been to reduce the incidence of low birth weight among infants. … Or take the earned-income tax credit, which supplements the incomes of the working poor. Census data show that in 2002 the EITC "lifted 4.9 million people out of poverty, including 2.7 million children." Without the EITC, the center notes, "the poverty rate among children would have been nearly one-third higher."  The report cites conservative economist and Nobel Prize winner Gary Becker, who once wrote that the earned-income tax credit "rewards rather than penalizes poor families with working members." Yes, government programs can fight poverty while decreasing dependency… There is much more in these reports -- available at http://www.cbpp.org -- but the point is clear: Without government's exertions, many more Americans would be poor. This, in turn, means that Congress's efforts to pay for the Bush tax cuts by trimming some of these programs, particularly food stamps and Medicaid, are, in a word, unconscionable…

    Posted by on Tuesday, July 19, 2005 at 02:34 AM in Economics, Policy | Permalink  TrackBack (0)  Comments (0)


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