State governments help finance most U.S. antipoverty programs. The Great Recession documented the major flaw in this approach: the need for these programs is higher than ever when the ability of state governments to pay for them is at a low point. This analysis examines the factors that constrain states' abilities to maintain critical services and respond to increasing need during a recession. Financing strategies are outlined for the federal government to reduce poverty in the upcoming period of high unemployment, and mechanisms that could be enacted now to provide, automatically, the additional funds needed in the next recession.
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