New Poverty Data Confirms that the EITC and CTC Work

Jos G. Linn, Grassroots Manager for U.S. Poverty Campaigns
October 16, 2014

This morning, the Census Bureau released its 2013 Supplemental Poverty Measure (SPM). The SPM is designed to provide a more accurate view of poverty in America. Unlike the official poverty measure released last month, the SPM takes various government programs such as the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), and Supplemental Nutrition Assistance Program (SNAP) into account in calculating the poverty rate. It also looks at the impact of certain expenses on family incomes, such as taxes paid, child support, and out-of-pocket medical expenses (for a description of the difference between the official poverty measure and the SPM, go here). This helps policy-makers and the public better understand the impact and benefit these programs provide to millions of low-income Americans. Here are some of the findings from today’s release:

  • The overall poverty rate in 2013 using the SPM was 15.5 percent, or 48.7 million Americans. The official poverty rate released in September was 14.6 percent or 45.8 million Americans.
  • The child poverty rate in 2013 using the SPM was 16.4 percent (12.1 million children) compared to 20.4 percent (15 million children) using the official measure.
  • If the EITC and CTC were not available, the poverty rate (using the SPM) would have been 2.9 points higher at 18.4 percent. For children, the poverty rate would have been a staggering 6.4 points higher (22.8 percent). This means that the EITC and CTC lifted 8.8 million people out of poverty in 2013.
  • If SNAP were not available, the poverty rate would have been 1.6 points higher (17.1 percent). This means that SNAP lifted 4.8 million people out of poverty in 2013.

Another sobering statistic from the SPM shows that out-of-pocket medical expenses pushed 11.1 million people into poverty in 2013 (the SPM poverty rate would have been 12 percent but for these medical expenses).

What this data confirms is that poverty is still a serious problem in America. With almost 50 million men, women, and children facing economic hardship, we need to do more. The data also confirms how integral the EITC and CTC are to people living in poverty, especially children. Except for Social Security (which lifted 27 million out of poverty in 2013), the EITC and CTC are our most effective tools at reducing poverty. That is why it is essential that Congress work to protect and expand these credits, starting by making the 2009 EITC and CTC improvements permanent (as well as protect important programs like SNAP, Social Security, and unemployment benefits[1]).

TAKE ACTION: Read the 2013 Supplemental Poverty Measure Report, along with this helpful chart, and use this information to remind congressional candidates about poverty in your state and educate them about the importance of the EITC and CTC in combatting poverty in America (you can find state poverty rates in the report on pages 9-10 of the report). Urge them to pledge to protect and expand these credits if they are elected and to work to make ending poverty a national priority in the next Congress. Contact campaigns in your state to see if you can attend a candidate event and ask a question. If there are no events in your area, contact campaign staff and ask to speak to the policy staff person who works on poverty and/or tax policy.

Here are some resources to help you:

If you have questions about the new poverty data or need coaching for your candidate outreach, please contact Jos Linn at [email protected]. Once you have meeting set up or plan to attend a candidate event, please contact Meredith Dodson ([email protected]) to set up a call to help your prepare.

 

[1] See the impact of these and other programs in the SPM report, starting on p.10.