Child Poverty

New Report Finds Deep Child Poverty Rose between 1995 and 2005 Due to Weakened Safety Net Programs

February 28, 2020 | National

The dismantling of welfare in 1996 ushered in a decade-long increase in the number of children living in families with income below half the poverty line, according to a new analysis by the Center on Budget and Policy Priorities, but that increase has been reversed by the rise of SNAP as the country’s most effective deep-poverty-fighting tool.

The report, released yesterday, found the rate of deep child poverty rose between 1995 and 2005 from 3.1 to 3.5 percent due to weakened safety net programs and then fell to 2.7 percent by 2016 largely as a result of improvements to SNAP. Here’s a quick summary of how it happened:

In the 90s, the government shifted its approach to fighting child poverty. Policymakers cut direct assistance to families with the lowest incomes by reducing benefits and tightening eligibility through work requirements and restrictions based on immigration status. They essentially replaced direct cash assistance with tax credits like the Child Tax Credit and the Earned Income Tax Credit, which tend to benefit families with slightly higher incomes.

As a result of this redistribution of assistance away from the very-neediest families, deep child poverty rose between 1995 and 2005, even as child poverty on the whole fell. The poorest of the poor were left behind in a time of relative prosperity. In 1995, direct cash welfare assistance lifted 2.8 million children out of deep poverty; by 2005, the program that replaced traditional welfare (Temporary Assistance for Needy Families or TANF) lifted only 700,000 children out of deep poverty.

Then came the Great Recession and something kind of odd happened: deep child poverty fell even as the economy crumbled. By 2010, deep child poverty had fallen from 3.5 percent in 2005 to 2.6 percent. This happened in large part because SNAP became significantly more effective thanks to legislation that expanded eligibility and a large increase in the program’s caseload during the recession.

More than two decades after welfare was gutted, SNAP stands alone as the most effective, most important program we have to fight deep child poverty. In 2016, SNAP lifted almost 2 million children out of deep poverty, nearly twice as many as the next closest program. That same year, TANF lifted only 300,000 children out of deep poverty.

Even though SNAP has picked up the slack as cash assistance has disintegrated, government assistance still isn’t as effective at fighting deep poverty as it was 25 years ago. If the safety net had been as effective in 2016 as it was in 1995, 300,000 fewer children would have lived in deep poverty.

Reliance on SNAP as the predominant deep-poverty-fighting program limits the effectiveness of the safety net, which would be improved by a wider array of strong programs, and leaves federal anti-poverty efforts extremely vulnerable to cuts like those proposed by the Trump Administration, which this month suggested cutting by about $180 billion over a decade.

If we’re serious about fighting deep child poverty, we ought to make SNAP even more effective by increasing benefits and walking back eligibility restrictions; supplement SNAP with a true cash assistance program, possibly in the form of a child allowance; and invest in existing, massively underfunded programs like housing assistance that are proven to reduce deep poverty.

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