Urban war on poverty

[Now over 50 years ago, President Lyndon B. Johnson signed the Economic Opportunity Act of 1964.  Johnson's so called "war on poverty" has been a source of conflict and contentious debate since it became law.  No doubt his efforts relieved millions from the suffering of poverty, including senior citizens who benefited from Johnson's Medicare program. 

Viet Nam interfered with Johnson's plans, distracted him and the nation and brought the real progress he led to a standstill.  Today the battle has shifted to the great cities of the United States.  The following essay describes the new terrain of whatever war might be underway against growing poverty in our nation.]

Waging the 21st-Century War on Poverty

By Ben Hecht | January 8, 2014

 

Lyndon Johnson signing the Economic Opportunity Act of 1964.

[Now over] Fifty years ago today, during his State of the Union address, President Lyndon B. Johnson declared “unconditional war on poverty in America.” This war was to be waged primarily through federal legislation. An array of bills and acts resulted in the creation of programs such as food stamps, Head Start, Medicare, Medicaid and work-study. Today, these programs make for the basis of a contentious, and often divisive, national debate about how Americans live and what we as a society envision as the rights of the most vulnerable among us.

Read the entire report here. 

Public benefits. . . truly public

Over the weekend I heard a news program reporting that 26% of Americans use a local food pantry on a regular basis.  Of those who resort to charity centers for food stuffs a significant majority were also employed.  Given the number of people who use our pantry and the tons of food we distribute annually, these realities don't surprise me at all.

Ironically, and I would say tragically, far too many of our neighbors work but don't earn enough to properly care for themselves or the their families.  We often hear the flip side/"upside" of this very negative wage and labor reality in Dallas: labor costs in Texas are low; potential employees abundant, especially among the unskilled. 

Do the math.  A single person earning $10-12 an hour on a full-time job finds it very difficult to make ends meet each month.  If the job offers no benefits, the challenge is even tougher.  Add in a family and the mountain cannot be scaled without support from other sources. 

The Texas culture typically chaffs at the mention of "public benefits."  Texans typically don't appreciate "welfare." 

But, maybe we aren't looking at such benefits properly. 

If wages are too low for a significant portion of the workforce to make a life and we continue to depend on that sector of the workforce to make our community work, then public benefits actually benefit all of us in direct and indirect ways. 

Taken further, public benefit programs that place purchasing power in the hands of those at the very bottom of our city's economic pyramid ensure that those dollars surge into the local economy, and very quickly. 

The fact is poor people spend what money they do have. 

In 2010, according to the Texas Hunger Initiative, Dallas County left over $500,000,000.00 of purchasing power on the table due to the fact that all those eligible for the U. S. Department of Agriculture's Supplemental Nutrition Assistance Program (SNAP--food stamps) did not enroll to receive the benefits available and designed for working people.  Statewide the total unclaimed benefits ran into the multiple billions!

We need to understand a couple of things about that very significant pool of cash. 

First, these dollars flow back to Texas from Washington, D. C. when claimed by and used by the state.  When we fail to enroll an eligible person, we allow tax dollars that we've already sent to the federal government be redeployed in some other part of the country.  The very small cost to Texas to leverage these benefits back to Dallas is more than worth it to recapture funds we've already invested or set aside for the purpose of assisting low-income Texans. 

Second, and even more powerful, the half-billion unclaimed dollars are not just lost to our neighbors, but they are lost to the retail grocery businesses in our city.  Why these businesses don't insist on better performance by Texas is beyond me. 

And, this is just one public benefit resource available to the working poor in Dallas.  The Earned Income Credit tax program, health care programs, child care subsidies, housing support and other public efforts to benefit the lowest wage earners among us, actually end up benefiting us all. 

When families are financially stronger, the local economy reflects that strength in many ways that impact every aspect of our community's life and quality. 

Properly understood, public benefits turn out to be public indeed.

Thank you, Gov. Romney!

Day before yesterday, Mitt Romney made it very clear that he's "not concerned about the very poor."  Actually, as news agencies made clear in the aftermath of the GOP candidate for President's relatively shocking statement, Romney has been saying this or something much like it for months. 

I'm grateful to Mr. Romney for being so clear.  But even more, I'm so thankful that at last someone brought the issue of poverty and extreme poverty into the national conversation.  No one else has been talking about the poor much at all.  Over the last two days that has changed.  Thank goodness!

Romney said that the focus of his campaign was not the extremely poor  or the extremely rich, but the 95% of Americans who are middle class. 

Now there are a few glaring problems with his analysis.

First, he explained that the extremely poor had a "safety net" to provide for them.  He even went so far as to promise that if he found the safety net in need of repair, he would fix it.  I immediately wanted to call him up and invite him down to Texas because our "safety net" is in a world of hurt these days!  Name the issue or need and Texas under performs terribly.

Food security and hunger.

Uninsured citizens.

Childhood poverty.

Decent and affordable housing for our workforce and the homeless.

Public education.

Loans/grants for higher education.

Public health.

Workforce training.

Living wages.

Mental health funding.

Dental services for the poor.

Child care and early childhood development.

Public transportation. 

The list could go on and on. 

The wealth gap grows in our state and in our urban centers, but the net doesn't hold.  Besides, we need a platform for folks to stand on and find traction and stability, not a net into which to fall helplessly. 

So, come on out to Texas, Governor!

Second, there's the problem of the Governor's math: the 95% in the middle.  With 1 in 5 Americans, 1 in 4 children, conservatively estimated, to be living in poverty, there is no 95% to be concerned about!  The bottom 30-plus % of our fellow citizens live impoverished lives and things are not improving for them as their numbers swell.  But, the Governor says he's not concerned about the poor.  I guess not, he doesn't even know how many poor folks there are in the U. S. today.  Not good for a President, I'd say.

Still, he brought the subject to the top of our minds.  For that I remain grateful.

[Editorial note:  This morning reports have the Governor saying that he "misspoke" when he said he "didn't care about the extremely poor."  Wonder how that could ever happen?]

Public benefits benefit all of us. . .

We live in a society that provides some benefits, though limited, for the poorest and weakest among us. 

That said, we often over look the fact that these benefits designed to lift "the poor" also benefit the rest of us. For example, SNAP funds (food stamps) are spent in retail grocery stores who benefit from the purchases the public benefits make possible.  SNAP is a huge positive to Kroger's bottom line, resulting in jobs, dividends to share holders and economic growth in the community overall. 

What is true of SNAP funds is also true of other public benefits received by low-income families.  In fact, one of the quickest methods for injecting life into any economy is by means of direct benefits to those at the bottom of the economic ladder.  For some reason most of us don't understand or give much thought to this economic reality. 

Texas is not too proficient at claiming the benefits from the federal government that should be coming back to us.  I say "back," because the benefits are funded by taxes we've already paid.  When our state fails to enroll, certify and qualify eligible persons for the benefits for which they qualify, the result is a significant capital lost to our state's economy. 

And, it is clear that our record of recovering those benefits is not good. 

Here's the sad news about Texas and unclaimed federal dollars across a broad array of public benefits annually: 

SNAP (food stamps) $2.4 billion unclaimed

Energy assistance  $568.7 million unclaimed

Childrens' Health insurance  $1.2 billion unclaimed

Children's Medicaid  $866.2 million unclaimed

Adult Medicaid (aged & disabled) $523.6 million

Medicare Part D Low-Income RX  $236 million

Pell Grants for college tuition $349.3 million

For a grand total, conservatively estimated at $6.1 billion annually!

We fail to enroll all of the eligible participants and we loose the funding for Texas.  As a result, tax dollars that I pay leave Texas and benefit other states.  During tough economic times for our state, this loss is completely unacceptable. 

In addition, each of these funds, once claimed and spent, possess and exhibit a "multiplier effect" in the economy.  In other words, these funds and their impact on the economy multiply as they circulate and are spent and respent through various sectors of our economy.  

Here's the multiplier factor for several of these funds designed to assist the poorest and weakest among us:

SNAP (food stamps) spent in retail grocery stores has a multiplier effect of 1.95 per dollar spent.

CHIP's multiplier effect is 3.17 per dollar spent.

Adult Medicaid--3.17 per dollar.

Energy assistance--2.25 per dollar.

Pell Grants--3.15 per dollar.

Medicare RX--2.67 per dollar. 

The overall impact of these public benefits beyond the aid to poor families themselves includes a stimulus to the economy of the state in real dollars and in new jobs.  When we fail to draw down these benefits, we fail our own economy and we act in opposition to our own interests as tax payers.

We can do better. We should start by simply understanding the reality behind the numbers.