Wednesday, August 20, 2014

HEINTZ: Misperceptions about the War on Poverty

By ANDY HEINTZ, For What It’s Worth | 1/29/2014

A billion dollars is an astronomical amount of money that most of us have trouble wrapping our minds around.

After all, few of us will ever see, much less know, anyone who makes this amount of money in our lifetimes. So, when politicians or newspaper reporters tell us that this or that government program costs billions of dollars, we understandably assume this must be a lot of money. Yet, this sort of reporting can be highly deceptive when such big numbers are thrown around without any context.

A billion dollars is an astronomical amount of money that most of us have trouble wrapping our minds around.

After all, few of us will ever see, much less know, anyone who makes this amount of money in our lifetimes. So, when politicians or newspaper reporters tell us that this or that government program costs billions of dollars, we understandably assume this must be a lot of money. Yet, this sort of reporting can be highly deceptive when such big numbers are thrown around without any context.

For example, when anti-poverty programs like food stamps, unemployment benefits and Temporary Assistance for Needy Families (TANF) are reported to cost billions of dollars, people think that either A) these programs are not very effective because poverty remains stubbornly persistent in this country, or B) that cutting these programs will go a long ways toward balancing the federal budget.

These two widely held assumptions are interrelated because if the public believes, which many people who get their news on the fly do, that we are pouring bushels of money into anti-poverty programs with little positive effect, they are likely to be more amenable to making cuts to these programs.

That’s why articles on anti-poverty programs would be much more accurate if, after they report the annual costs of certain welfare programs, they also disclose what share of the federal budget these costs actually represent. Such reporting would be a revelation for many Americans who believe that up to one-third of the federal budget is being directed at decreasing poverty. It also might put the “War on Poverty,” labeled a failure by many conservatives, in a different context.

Dean Baker, co-founder of the Center for Economic and Policy Research, reports that a recent compromise bill by Republicans and Democrats, if passed, will lead to $9 billion in cuts to the food stamp program over the next decade and amount to a paltry 0.019-percent cut in public spending over this time period. In other words, this cut, which will cause extreme hardship to thousands of Americans, won’t make a dent in the federal deficit. This should illuminate the fact that these cuts are more about political ideology than economic pragmatism.

The annual cost of food stamps per year represents a meager 2.1 percent of the federal budget and Temporary Assistance for Needy Families amounts to an even more miniscule slice of the federal pie — 0.4 percent. The total cost spent on social safety net programs (besides Social Security and Medicare) accounted for about 12 percent of federal spending in 2012.

The programs that fall under the safety net umbrella include the refundable parts of the Earned Income and child tax credit, child care assistance, assistance in meeting home energy needs, unemployment insurance, food stamps, aid to abused and neglected children, low-income housing assistance and Supplemental Security Income for the elderly and disabled poor.

According to the Center on Budget and Policy Priorities, a policy organization that works at the state and federal levels on fiscal policy and public programs that affect moderate- to low-income American families and individuals, safety net programs kept some 25 million people out of poverty in 2010. Furthermore, the policy organization found that only about 5 percent of the federal budget is spent on the non-working poor. So, nine-tenths of so-called welfare spending goes to elderly, disabled and working households. This explodes the myth that a significant portion of the budget is going to people sitting on their couches eating potato chips.

Andy Heintz is a political commentator. He previously was a Herald staff writer, now a sports reporter at the Ottumwa Courier, Ottumwa, Iowa. Read his blog at http://www.orble.com/just-one-mans-vision/ and follow @heintz23 on Twitter.

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