Money is effective at fighting poverty

Money is effective at fighting poverty

The expanded Child Tax Credit was one of the biggest policy successes born from the Covid-19 pandemic. It reduced child poverty by more than 25% – lifting 3.4 million children out of poverty – by giving families a monthly, no-strings-attached cash allowance, which they used on basic necessities such as food, utilities or shelter. Unfortunately, families lost this critical support when Congress failed to extend the credit last December. But as the New York Times’ Farhad Manjoo explains, the CTC provided the latest example of why policies that provide a universal basic income, or a monthly stipend to cover basic needs, are the most effective at fighting poverty. 

A primary one is simplicity. In an effort to allay ginned-up fears that people who receive assistance are lazy or dishonest, the United States has larded up many welfare programs with so many complicated eligibility requirements that lots of people who could be helped by benefits are not, for lack of knowledge or access, or an inability to jump through bureaucratic hoops. Traditional welfare programs can also undermine people’s agency; by letting the government rather than recipients decide how to spend the money, people’s actual needs may go unfulfilled. Finally, hyper-targeting welfare programs to certain groups breeds resentment. Programs that are universal or nearly so, like Social Security, enjoy widespread political support. Programs that aren’t, don’t.

Mandatory summer school?  
Earlier this year state Rep. Richard Nelson sought to replicate the significant strides that Mississippi has made to improve student reading scores. But his legislation died after some education leaders pushed back against the idea of holding back third-grade students who do not pass a mandatory reading assessment. On Thursday, Education Superintendent Cade Brumley offered a compromise plan that would mandate summer school for children who are not reading on grade level. As The Advocate’s Will Sentell explains, Brumley’s proposal also faces pushback: 

Arthur Joffrion, superintendent of Iberville Parish schools, questioned the value of forcing students to repeat the grade and said there is research that shows it harms children. “I do have some concerns with the required retention and would love to have some thoughts on the rationale,” Joffrion said. Brumley later said there is research that disputes arguments that forcing students to repeat a grade is bad policy. Jenna Chiasson, assistant superintendent for teaching and learning, told the group that 30 hours of reading intervention has been shown to have a “huge impact” on student achievement. Chiasson also said state officials would allow for wide latitude on how summer classes are run and would provide guidance for what students in each grade need.

The latest standardized LEAP tests show that 4 in 10 Louisiana third-graders scored below grade level in reading. Students who don’t master basic reading skills by the end of third grade are likely to face major academic challenges in future years and are far more likely to drop out of high school. 

Insurance crisis could make coastal Louisiana unaffordable
More than half the land in six Louisiana coastal parishes could be underwater by 2050 because of rising sea levels due to climate change. But the state’s insurance crisis could crush the dream of homeownership in coastal Louisiana years before the land sinks back into the Gulf of Mexico. Gannett’s Greg Hilburn spoke with Houma Rep. Jerome “Z” Zeringue about his personal experience navigating the insurance market after his house sustained damage during Hurricane Ida, and how insurance is becoming exorbitantly expensive or simply unaffordable in Louisiana’s coastal regions: 

Though Zeringue never filed a claim on his property insurance – he had an $8,000 deductible – his private company dropped him after Hurricane Ida. Zeringue’s insurance agent told him Citizens was his only option, which would raise the cost of his annual homeowners policy from $2,300 to $9,000. “I told him I was just going to have to risk it; I wasn’t going to pay $9,000,” said “Z”, who was able to take that risk because his home doesn’t have a mortgage. “We finally found a policy in the private market, but it still more than doubled our cost to $4,500, and that’s with the highest deductible and bare minimum protection.”

Helping households with rising fuel costs
More than 20 million Americans are behind on their utility bills, a number that could increase in the coming months as households increase their use of expensive fuels in the colder winter months. President Joe Biden has proposed a plan to help Americans deal with rising costs – a $500 million emergency supplemental appropriation for the Low-Income Home Energy Assistance Program (LIHEAP) in an upcoming stopgap bill to fund the federal government. The Center on Budget and Policy Priorities’ David Reich provides an overview of the program and the urgency with which the emergency appropriation is needed: 

LIHEAP provides funds by formula to states, tribes, and territories to help low-income households meet household energy bills. Within federal guidelines, states and other recipients have flexibility to design their programs to best meet their needs. The largest share of LIHEAP funding goes to help pay heating costs, but substantial amounts are also used to assist with summer cooling costs, to provide crisis assistance (such as payments to prevent utility shutoffs or to repair heating and cooling equipment), and to pay for weatherization to reduce energy costs.

Number of the Day
54% –
How much more, on a percentage basis, that low-income earners pay as a share of their income to state and local taxes compared to top earners. (Source: Institute on Taxation and Economic Policy via Center for Public Integrity