Fact of the Week: We Can Reduce Child Poverty in America by 60 Percent Through an Investment Equal to Only 2 Percent of the Federal Budget


February 2, 2015

“Child poverty is too expensive to continue.”CDF child poverty report cover

That’s what Children’s Defense Fund President Marian Wright Edelman said in unveiling their new report, Ending Child Poverty Now. Remarkably, a dramatic reduction in child poverty is not too expensive to undertake. An increase of just 2 percent of the federal budget put towards expanding proven programs and policies that ensure children’s basic needs are met, increase parents’ employment, and make work pay for adults with children would cut child poverty in America by 60 percent. The report shows that more 6.6 million children, including 0.5 million extremely poor children, could be lifted above the poverty line by making these investments now.

Bringing these millions of children out of poverty would be accomplished by making changes to 9 existing policies, including expanding SNAP/food stamps, housing and child care subsidies, and the Earned Income Tax Credit, raising the minimum wage, creating subsidized jobs, making the Child Tax Credit and the Child and Dependent Care Tax Credit fully refundable, and making changes to the way child support affects TANF and SNAP benefits. Doing so would mean 97 percent of poor children would experience improvements in their family’s economic circumstances.

By showing that programs or policies with demonstrated effectiveness at reducing poverty could do so much more, the report demolishes the complacent view that poverty is regrettable but unavoidable.

The cost for this monumental decrease in the number of poor children would be $77.2 billion a year. It’s hard not to imagine members of Congress dismissing the report’s proposals because of this cost. But when you think of what Congress does spend money on, it becomes clear that ending poverty for 6.6 million children is not out of reach.

Closing tax loopholes that let U.S. corporations avoid $90 billion in federal taxes each year would more than cover the cost. Taxing capital gains and dividends at the same rate as earned income would bring in $84 billion a year. In my favorite example, CDF notes that scrapping the F-35 fighter jet program (which we’ve noted before is the most expensive weapon in U.S. history and is plagued with problems) alone would allow us to reduce child poverty by 60 percent for 19 years. CDF only named a few of the ways taxes could be fairer or military expenditures responsibly trimmed, but enough to show that we can afford to make this vital investment if we have the political will to do so. Mrs. Edelman quoted Nobel prize-winning economist Robert Solow, who served as advisor to CDF for a similar report published in 1994:

“I suspect that in fact our wallets exceed our will, but in any event this concern for the drain on our resources completely misses the other side of the equation: Inaction has its costs, too.”

Yes – like the estimated $500 billion a year that child poverty currently costs our nation in lost productivity, increased crime and worse health. (Full disclosure: I worked for CDF until 2003 and had a modest role in readying that 1994 report, Wasting America’s Future, for publication.)

We’re written on our blog before about the deplorable state of child poverty in this country (here, here, and here, among others). Nearly 15 million children in the U.S. live in poverty, and 6.5 million of those live in extreme poverty (below half of the federal poverty line). As the report says,

“These policies could be pursued immediately, improving the lives and futures of millions of children and eventually saving taxpayers hundreds of billions of dollars annually.”

In an opinion piece in the New York Times written about this report, Charles Blow wrote, “[S]urely we can all agree that no child, once born, should suffer through poverty. Surely we can all agree that working to end child poverty – or at least severely reduce it – is a moral obligation of a civilized society.”

The President’s budget, out today, will not reduce child poverty by 60 percent. It does at least make some important commitments to increase the availability of affordable, quality child care – even promising to fund enough vouchers to guarantee child care for every low-income child under age 4. At a time when majorities in Congress have supported actions to disinvest in our future, the President does still want to invest. But, with welcome exceptions, he is mostly protecting what we have, not building enough to cut poverty boldly.

It would be nice to think Congress will read this report and say “So it is possible to end poverty for millions of children if we take these steps? Well, okay then!” Well – maybe not this year. But if people start to understand that making these investments is well within our grasp, and incalculably worth it, the idea of what’s possible will change.

(Lecia Imbery contributed much to this post.)


Budget and Appropriations
child nutrition
child poverty
early childhood
Early Childhood Education
Fact of the Week
minimum wage
Poverty and Income