Child poverty has ramifications for nation’s future growth, prosperity

On Sept. 16, the Census Bureau released its 2009 poverty data revealing that more than one in five children in America lived in poverty last year.

Child poverty merits a significant policy response not only because of the moral obligation we have to provide every child with an equal chance to succeed, but because it has major consequences for America’s long-term economic growth and prosperity.

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his past summer, Sen. Dodd’s subcommittee held a series of hearings on the State of the American Child, bringing to light some alarming statistics: One in seven American children have an unemployed parent; one in four currently rely on food stamps, and half of all kids will use them at some point during their childhood.  And while economists will tell us the recession has technically ended, it does not feel that way for many families and their children. By the time American families begin to feel the effects of an improving economy, an additional 5 million kids might have already been driven into poverty.

Half in Ten — a national campaign that seeks to cut the U.S. poverty rate in half in 10 years — recently released a report that underscores that child poverty not only impacts families but also costs our economy more than half a trillion dollars each year in lost productivity and increased expenditures for healthcare and criminal justice. Why? Children who do not receive adequate nutrition are less likely to perform well in school and can face cognitive and physical health issues later on. Children whose parents lose their jobs can experience stress and deprivation that limit their own employment opportunities as they enter adulthood. As families experience prolonged hardship, the long-term costs of child poverty will likely increase by billions of dollars.

The good news? As we seek to reduce our country’s deficit and spur economic growth, this research suggests that investments made today to reduce child poverty should actually increase our economy’s productivity and result in lower fiscal deficits in the future.

We know child poverty is a problem we can solve with cost-effective investments and a national commitment to achieve results. The Obama administration has already adopted several important measures that have kept millions out of poverty last year, such as tax cuts for low- and middle-income Americans and a temporary boost to the food-stamp program.

However, given the severity and depth of this recession, further action is necessary to reverse the increase in child poverty. The upcoming tax debate provides an opportunity for reforms that would benefit working families and lift millions of kids out of poverty. Last year, Congress made reforms to the Earned Income Tax Credit and Child Tax Credit that rewarded work and helped low-income working parents meet their families’ basic needs. The stakes are high. If Congress allows these reforms to lapse, a full-time minimum wage worker with two children would stand to lose almost $1,500 of their child tax credit, a loss of income that would force parents to cut back on basic necessities for their kids. Congress must act now to make last year’s improvements to the tax code permanent and give working parents the tools to keep their children out of poverty.

Congress must also act swiftly to create jobs so parents can provide for their own children. An obvious step would be to extend the Temporary Assistance for Needy Families Emergency Fund for another year. Democrats and Republicans alike have hailed this program as a job creation engine that has enabled states to partner with the private sector to create over a quarter million jobs for vulnerable workers and move families from welfare to work. If Congress fails to act, this effective program will expire on Sept. 30, forcing states to wind down successful programs that have created jobs and provided nutrition, housing and other social services to vulnerable children.

Just as we look to unemployment rates and GDP as a measure of our current economic growth and stability, our nation’s child poverty rate should be viewed as a similar barometer of America’s future growth and prosperity. As the Dodd Subcommittee hearing series on the “State of the American Child” has made clear, we need to determine how our policy decisions are impacting our nation’s youngest citizens. We must examine child poverty each year in this context and hold our leaders accountable for achieving poverty-reduction goals, just as we hold them accountable for job creation and deficit reduction.

We are judged, Hubert Humphrey famously said, by how we treat those in the shadows of life.  And every child who goes to bed hungry, who lacks the basic necessities of life, is a mark on our national conscience. We can reduce child poverty. And we must because the success of our nation is based on the success of our children.

Sen. Dodd, the senior senator from Connecticut, chairs the Senate HELP 
Subcommittee on Children and Families, and Podesta is president & CEO of Center 
for American Progress Action Fund, a partner in the Half in Ten antipoverty campaign.

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