Rise in poverty rate shows impact of eliminating pandemic-era assistance programs

Rise in poverty rate shows impact of eliminating pandemic-era assistance programs

The U.S. poverty rate went up about 4.6 percent in 2022, according to new census data released Tuesday.

In 2022, the Supplemental Poverty Measure (SPM), a percentage of economic deprivation that takes government assistance into account, was 12.4 percent. That’s up from 7.8 percent in 2021. The bureau noted that this is the largest annual cost of living increase since 1981.

The official poverty rate, 11.5 percent, did not change from 2021 to 2022, which means that about 37.9 percent of people still live in poverty.

The U.S. Census Bureau attributed the SPM uptick to changes in federal tax policy, such as the suspension of the Child Tax Credit program, the Earned Income Tax Credit program and stimulus payments.

The child tax program was significantly expanded in 2021 as part of President Joe Biden’s $1.9 trillion American Rescue Plan. The expansion was suspended last year. It allowed the government to send monthly checks of up to $300 to families with children during a six-month period.

The earned income program gave low-to-moderate income tax refunds based on household income qualifications.

About 35 million families benefited from the child tax payments. The program kept 6.1 million children — mostly Black and Latino— out of poverty in July 2021 alone, a Columbia University study published in August found. That number represents about 80 percent of the country’s children.

Both of those programs, which were significantly expanded as part of COVID-19 relief efforts, were suspended last year.

Congressional Democrats attempted to restore some form in the child tax credits in 2022, citing data from the year prior stating that the number of impoverished children fell by half. Only 5.2 percent of children were living in poverty in 2021.

Their efforts were not successful.

In June, Democratic lawmakers introduced the Working Families Tax Relief Act with the aim of reinstating elements of the pandemic-era aid programs that cut the child poverty rate.

The legislation would boost the child tax credit to $3,000 for children aged six to 17 and $3,600 for children under six. At least 41 Democrats sponsored the legislation.

It has yet to be passed by the Senate, which is currently controlled by Democrats.

In a written statement Tuesday, Biden blamed the uptick in poverty levels on GOP lawmakers’ refusal to pass the provision as part of last year’s government spending bill:

“The rise reported today in child poverty is no accident — it is the result of a deliberate policy choice congressional Republicans made to block help for families with children while advancing massive tax cuts for the wealthiest and largest corporations.”