The voices of Urban Institute's researchers and staff
December 9, 2011

Poverty Hits Home—So Poverty Policy Should Too

December 9, 2011

In some ways, poverty is like the weather.  Everyone is willing to talk about it, but no one has wanted to do anything about it lately.  Now Congresswoman Gwen Moore and several of her colleagues say they are ready to take poverty on, at least for those who are eligible for Temporary Assistance for Needy Families (TANF).  On December 5, Congresswoman Moore introduced the Rewriting to Improve and Secure (RISE) an Exit Out of Poverty Act.  This bill proposes a fairly substantial overhaul to the TANF program.

Some of the bill’s interesting features relate to place.  One fundamental change, for instance, would require the federal government to adjust the state allocations.  All states would get an adjustment for inflation (which TANF has not provided since it morphed from AFDC into TANF in 1997), states with rising numbers of children living in poverty would get additional funds.

With this change, Congress would be acknowledging the substantial differences by state in the growth of the child population. Growth has been greatest in the South and West, with most increases  due primarily to increasing numbers of  Hispanics and other children of color.

Another change:  states would be required to tell the federal government annually their plans for prioritizing areas within their states with higher rates of poverty and unemployment and lower job-to-population ratios.   Here too, the new legislation bows to grim reality—in this case, strong racial and income segregation and concentration.  Making states address the consequences of such segregation in their attempts to reduce child poverty and help parents become more self-sufficient is essential  to  reducing poverty levels.  Without this direction it is always easier to focus on the easiest to serve.

Other place-based issues are worth thinking about too as the federal government redesigns programs to be more effective.  For example, the cost of living varies substantially across the country.  Work by the Urban Institute that uses the supplemental poverty measure to assess the effectiveness of state measures to reduce poverty through income and program supports shows that including state cost of living indices helps policymakers see each state’s challenge and progress in light of what it costs to live in the state.  For example, as Linda Giannarelli explained in an Urban Institute forum this week, looking at the impact of Georgia’s anti-poverty programs without taking account of its cost of living relative to some other states would suggest that the child poverty rate for 2008 was 16.7 percent, as opposed to the official figure of 19.3.  But after taking account of  the lower cost of living in Georgia (relative to Massachusetts, for example), the new measure shows that safety net policies brought the child poverty rate down to 13.8 percent (see figure below).  The cost of living is only one piece of the puzzle in understanding the impact of state policies.  Another is the impact on poor people in different age groups.  Giannarelli and her colleagues show that by changing the mix of programs in the safety net, a state can focus to good purpose on different age groups, with different outcomes.  So Massachusetts’ safety net helps seniors more than it helps children (which may serve a state with an aging population) while Georgia’s helps children more.  On balance, this suggests, federal   incentives for states to help children can reduce inter-generational poverty.

One feature of the RISE bill that isn’t very encouraging is that the program is to be permanent.  That suggests that the poor—like the weather-- “will always be with us.” Yet, if this bill or another one like it is effective, at least the same poor people won’t be poor year after year.

Effects of Safety net on SPM Poverty Rate: Children under 18, 2008

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