Poverty data provides a reason to let high-income tax cuts expire

Several lawmakers renewed their calls to let tax cuts for those in the highest tax brackets expire after new data showed the poverty rate climbed 14.3 percent last year, the highest since 1994 but still lower than some analysts had predicted.

Sen. Bernie Sanders (I-Vt.), who opposes the extension of tax cuts for those making more than $250,000 a year, said Thursday's dismal news is another reason to let the tax breaks expire.

"While poverty is increasing and the middle class is declining, it is incomprehensible to me that Senate Republicans are pushing for more tax breaks for the rich," Sanders said Thursday. "Senate Republicans should not be allowed to hold middle-class tax cuts hostage in order to give more tax breaks to millionaires and billionaires – especially when the gap between the very rich and everyone else is growing wider."

The poverty rate climbed 14.3 percent last year as the number of working-age poor grew to 43.6 million, the most in 51 years, the Census Bureau said Thursday in its annual report on the economic well-being of U.S. households.

Many people faced poverty after losing their jobs during the protracted recession, which began in December 2007.

In 2008, the poverty rate rose 13.2 percent, or 39.8 million people.

Congressional leaders in both chambers are working out how to move forward on the Bush-era tax cuts, which are set to expire at the end of the year.

There's general agreement that middle-class tax cuts should be extended.

The divide is over whether to extend the cuts for individuals making at least $200,000 a year and households making at least $250,000.

Some Democrats are supporting the extension of all tax breaks while the economy slowly recovers.

Although the numbers weren't pretty, President Obama credited the economic stimulus with keeping many people above the poverty line.

"Because of the recovery act and many other programs providing tax relief and income support to a majority of working families — and especially those most in need — millions of Americans were kept out of poverty last year," he said Thursday.

The Center on Budget and Policy Priorities has estimated that unemployment benefits kept 3.3 million people out of poverty last year, helping much more than in the past due to federal expansions of the program.

Although food stamps and low-income tax credits aren't taken into account, the Census Bureau estimated that if the expansions of these programs included in the stimulus were counted, each would keep about 2 million people out of poverty, according to the Coalition on Human Needs.

"The new poverty data show that work supports such as the Temporary Assistance for Needy Families (TANF) Emergency Fund, recent gains in the Child Tax Credit, Earned Income Tax Credit and food stamps remain urgently needed," said Deborah Weinstein, executive director of the group, which promotes polices to address issues facing low-income people.

In 2009, the poverty level was $21,954 for a family of four, based on an official government calculation that includes only cash income before tax deductions. It excludes capital gains or accumulated wealth, such as homeownership.

Average poor families live on far less, with incomes that are $9,042 below the poverty line.

Mississippi had the highest share of poor people, at 23.1 percent, followed by Arizona, New Mexico, Arkansas and Georgia, according to estimates by the Census Bureau. New Hampshire had the lowest share, at 7.8 percent.

Other census findings:

• Among the working-age population, ages 18 to 65, poverty rose from 11.7 percent to 12.9 percent, the highest level since the 1960s.

• Poverty increased among all racial and ethnic groups but stood at higher levels for blacks and Hispanics. The number of Hispanics in poverty increased from 23.2 percent to 25.3; for blacks it increased from 24.7 percent to 25.8. The number of whites in poverty rose from 8.6 percent to 9.4.