Earlier this year, Colorado Springs business owner Amy Mullins struck gold when a federal government job subsidies program allowed her to hire two new employees, increasing revenues at her medical lab testing facility by 32 percent. "These are employees that in May I would not have been able to hire on my own, nor possibly entertain keeping," says Mullins.
Unfortunately, the very program that helped Mullins hire workers and expand her business is set to expire Sept. 30 unless Congress acts quickly to extend it. The program — the Temporary Assistance for Needy Families (TANF) Emergency Contingency Fund — was created by last year's economic recovery legislation. It has provided subsidized jobs for nearly 250,000 adults and youth nationwide, including nearly 1,600 Colorado residents.
Ending a program that creates jobs is exactly the wrong step for our country at a time when so many people are struggling. This month the Census Bureau reported that 3.8 million more people in this country fell into poverty in 2009, pushing the poverty rate to 14.3 percent, constituting the largest number of Americans living in poverty since the government began tracking the data 51 years ago. About 12.9 percent of Coloradans live in poverty.
For a family of four, that meant living with an annual income of less than $22,000. Alarmingly, Colorado has seen a dramatic increase in the number of kids living in poverty. In 2009, 17 percent of Colorado's children lived in households earning below the poverty level, up from 14.8 percent in 2008.
This increasing poverty has dire consequences for our country's future economic health. A report by the Coalition on Human Needs — The Recession Generation: Preventing Long-term Damage From Child Poverty and Young Adult Joblessness — tracks the long-term consequences of child poverty. The report looked at the two counties with the highest rates of child poverty in each of 10 states. It found that birth weights were lower, fewer adults had finished high school and more people identified themselves as being in fair or poor health than the statewide average.
What makes our growing poverty particularly disturbing is that it is far from inevitable. The economic recovery legislation enacted in 2009 reduced the severity of poverty and the extent of joblessness. According to the Center on Budget and Policy Priorities, 6 million people (including 2 million children) were lifted above the poverty line by recovery legislation provisions, including the TANF Emergency Contingency Fund, tax credits, and nutrition and unemployment benefits.
Without these provisions, it is clear that poverty would be even worse today. In Colorado alone, between 45,000 and 96,000 people moved out of poverty as a result of these programs, and another 450,000 or more were helped even though they remained in poverty. The new poverty data under-counts the full impact of all these efforts, since it excludes food stamp benefits and tax credits when calculating family income.
Colorado also expanded economic security by increasing affordable housing and establishing a legislative poverty reduction task force. Additionally, a group of Coloradans came together to form a Half in Ten Coalition to work on cutting poverty in half in the next 10 years.
The record-breaking poverty makes it clear that investments in jobs and protections against hardship must remain a priority. Yet, some in Congress are using concerns about the federal deficit to justify cutting or letting lapse the programs that are helping most. Just this summer, Congress passed legislation that will reduce food-stamp benefits for a family of four by almost $60 a month beginning in April 2014. Now Congress is considering starting the reduction a year earlier.
This is the wrong choice. Cutting such assistance now will only increase our long-term deficit because families won't have the resources they need to contribute to economic growth.
The Great Recession is deeper and more painful than anything we've experienced in the past 70 years. Our leaders in Washington did the right thing by investing in successful anti-poverty protections in early 2009.
The need for those investments is far from over.
Kathy White is deputy director of the Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy. Bridget Kaminetsky is the Colorado Poverty Reduction Organizer for 9to5, National Association of Working Women, a diverse, multiracial membership organization that strengthens women's ability to win economic justice. Colorado's statewide Half in Ten Campaign is led by 9to5's Colorado chapter.
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