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Numbers are in: Government can actually fix poverty

Numbers are in: Government can actually fix poverty
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Homelessness is one of the most visible and pervasive features in nearly every American city. But what most Americans don’t know is that homelessness was a far more limited problem until the 1980s. What changed? Our policies.

In 1970, there was a surplus of 2.4 million low-income housing units in America, but that surplus plummeted to a deficit of 3.7 million units by 1985. Local governments in the 1970s made conscious policy choices that reduced affordable housing stock, as well as overhauled America’s mental health care that forced people out of institutions and onto the streets.

Developers were encouraged to build higher-end real estate, which increased local tax revenues but also forced lower-income people out of neighborhoods. Many people with severe mental health conditions had nowhere to go and were left with a rapidly declining supply of affordable housing options.

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Today, millions of Americans — with and without mental health challenges — face an incredibly similar situation. As we stare down the looming economic fallout of the coronavirus pandemic, federal and state governments are looking for ways out of their fiscal crisis. Poverty has the potential to explode, and assistance programs designed to help those struggling are on the chopping block. Right now, budget decisions are being made on which programs stay and which ones get cut.

Just like those decisions on homelessness in the 1970s, we have a choice. But what we also have is statistical proof that the government can indeed prevent and address poverty, even during a pandemic, if we tried.

When Congress passed the CARES Act in March, two key provisions were signed into law that helped millions of Americans. The law provided a one-time, $1,200 payment to many adults under a certain income, with an additional $500 for most children, as well as expanded, enhanced, and extended unemployment benefits to millions of workers, including an additional $600 per week. 

The effort has been extraordinarily successful. As a recent New York Times story highlighted, poverty in America has stabilized during the global pandemic. Despite months of sloppy implementation, and an unacceptable lack of transparency for hundreds of billions of dollars flowing to corporations, the results are definitive. We have continued to see the worst unemployment numbers since the Great Depression, but poverty in the United States has not grown. For millions of people, these additional benefits have been wildly successful at reducing financial instability and poverty.

The question for lawmakers, and the American people, is what comes next? 

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Unless Congress acts soon, the $600 expanded unemployment benefits will expire at the end of July. Families were given a life-line through the CARES Act and Congress should immediately extend the program. Make no mistake about it — giving cash to families works. It has stabilized our economy and kept people from dropping out of the labor force altogether. Congress could also pass the HEROES Act, which extends supercharged unemployment benefits and sends out another $1,200 check to individuals and families. With rent payments due every month, people need relief right now. 

Beyond the clear economic benefits of decreasing poverty, COVID-19 has also highlighted extreme racial disparities that lawmakers must address. Federal policies have been shaped for decades to exclude people based on race, from redlining in cities like Chicago, Detroit, and Baltimore, to Medicaid reporting requirements.

Race-based exclusion is an American pastime and lawmakers must understand this dynamic. Black and Latinx workers have disproportionately lost jobs and are disproportionately frontline workers putting their lives at risk. While white Americans are more likely to support “reopening” the economy, minority communities hardest hit by the pandemic and recession are the most concerned about going against public health guidance. They should be because they are most at risk.

This is the rare moment when doing the easy thing would be doing the right thing. We need to double-down on what has worked — cash payments that keep people out of poverty and allow them to put food on the table. We chose in March to help families weather this crisis and it worked. Lawmakers funneled too much relief to big corporations and the wealthy, but even that deeply flawed effort helped tens of millions of families avoid catastrophe.

The coming days are critical, both in terms of supporting the economy and helping millions of people avoid financial ruin. Direct cash payments helped raise millions of Americans out of poverty at the height of the first coronavirus wave. Our handle on the public health challenge may be slipping, but we now know that we can solve much of the economic strain. All we have to do is try.

Indivar Dutta-Gupta is the co-executive director at the Georgetown Center on Poverty & Inequality where he leads work to develop and advance ideas for reducing domestic poverty and economic inequality, with particular attention to gender and racial equity. Professor Dutta-Gupta also serves on the Tax March National Board, the National Academy of Social Insurance’s (NASI) board of directors, and is a member of the Institute for Research Poverty, Employment and Self-Sufficiency Network.