Explainer: New federal efforts could reduce poverty in America
By / Mar 17

Two recent congressional programs—one proposed and one already passed—may have a significant effect on poverty in the United States.

The recent $1.9 trillion pandemic relief bill, called the American Rescue Plan, includes a number of benefits that will affect low-income individuals and families. Although this relief only makes changes for 2021, it could be extended or used as a model for other poverty-reducing programs in the future.

Another program proposed in February by Sen. Mitt Romney, called the Family Security Act, would also give monthly cash payments to parents and reform federal aid for low-income Americans that would lead to reductions in poverty.

Here is what you should know about these efforts.

What is the poverty reducing feature of the American Rescue Plan?

A primary feature of the relief bill is direct payments to taxpayers of $1,400, or $2,800 for a married couple filing their taxes jointly, plus $1,400 per dependent. A married couple with two children would receive $5,600 in direct payments. 

The bill also significantly expands the Earned Income Tax Credit (EITC) for 2021 by making it available to people without children. The credit for low and moderate-income adults would be worth $543 to $1,502, depending on income and filing status.

For families with children, the legislation expands the benefit of the Child Tax Credit (CTC) from $2,000 annually to $3,600 for each child under 6 and $3,000 for each child between 6 to 17 years old (the credit previously excluded children age 17). Those amounts will also be available to all low-income families even if it exceeds the amount they paid in taxes

In previous years, the CTC was claimed when a person filed their tax returns. But starting in July, the CTC will be paid out on a monthly basis at a maximum rate of $300 per child. For example, a family with two children under 6 would qualify for $600 a month in CTC payments until December. (The other half of the CTC, for January to June 2021, will be paid when people file their tax returns.)

These payments are expected to have an immediate effect on the level of poverty in the U.S.

The poverty threshold for a one-person household is $12,880 a year (for comparison, a person working full time (2,080 hours per year) at the federal minimum wage ($7.25) would earn $15,080 a year). The threshold for a two-person family is $17,420, and $26,500 for a family of four.

The average relief benefit to the individual (i.e., $1,400 for the direct payment and roughly $1,000 for the EITC) would give them an additional $2,400, about 18.6% of the annual income needed to cross the poverty threshold (the equivalent to 331 hours—8.3 weeks—of minimum wage pay). For a family of two, it would provide 31% of the necessary annual income.

The benefit is most helpful, though, to a family with children. A two-parent family with two children under the age of 6 would receive $5,600 immediately, about $1,500 for the EITC, and  $7,200 in child tax credits—a total of $14,300, or 54% of the poverty threshold. 

How would the American Rescue Plan affect overall poverty?

An analysis by the Center on Poverty and Social Policy at Columbia University found the legislation could cut the overall poverty rate in the U.S. from 12.3% to 8.2%, and reduce the level of poverty for children under 18 from 13.5% to 5.7%.

What is the Family Security Act?

The change in the CTC under the American Rescue Act is similar to the Family Security Act, a proposal offered last month by Sen. Mitt Romney of Utah. The proposal would create a child allowance of $4,200 per child under age 6 (to be distributed at $350 per month) and $3,000 per child ages 6 to 17 (to be distributed at $250 per month). The maximum allowance per family would be $15,000 per year, or $1,250 per month. Unlike the change in the relief bill, which put no cap on the number of children, Romney’s plan would limit the benefit for families that have four or more children under the age of 6 or six or more children from the age of 6 to 17 to $15,000 a year. 

Eligibility would be available to parents four months before the child’s due date. The child allowance would also be available to families with no income and would only phase out for the highest-earning households (single filers making more than $200,000 and joint filers making more than $400,000).

This plan would repeal the current Child Tax Credit (CTC), which is currently administered through the tax code and is worth a maximum of $2,000 per child. The CTC is subject to a $2,500 minimum-income requirement, a phase-in rate, and a maximum refundability of $1,400 for workers with no tax liability to offset.

Romney’s plan would also reform the EITC by eliminating marriage penalties, reducing improper payments and IRS audits, making it easier for families to claim the correct credit, and maintaining the adult dependent component of the EITC separately to ensure no family earns less than the EITC in its current form.

A two-parent family with two children under the age of 6 would receive about $1,500 for the EITC and $8,400 in child tax credits—a total of $9,900, or 37.3% of the poverty threshold. 

How would the Romney plan affect poverty?

According to the Niskanen Center, Romney’s child allowance would reduce U.S. child poverty by roughly one-third and deep child poverty by half. They estimate the total poverty rate would decrease from 11.67% to 10.06% while the child poverty rate would decrease from 12.41% 8.37%. 

How much would these proposals cost?

The cost in the American Rescue Plan to provide $1,400-per-person stimulus checks to all Americans—not just those in poverty—is $422 billion. To expand the Child Tax Credit, Child Care Tax Credit, and Earned Income Tax Credit for all citizens for one year adds an additional cost of $143 billion. Because there are no offsets to that spending, it adds $565 billion to the federal deficit.

Under the Family Security Act, the estimated cost to expand the child benefit would cost $229.5 billion annually, which is $112.5 billion more than the current CTC. To pay for the expanded child benefit, the plan would make $66 billion in federal tax and spending offsets.

The Romney plan would eliminate head of household filing status, eliminate the Child and Dependent Care Tax Credit, eliminate the itemized deduction for state and local taxes paid, and eliminate Temporary Assistance for Needy Families. The plan would also change some eligibility for the Supplemental Nutritional Assistance Program. The reformed EITC would cost $24.5 billion annually—about $46.5 billion less than the current EITC.

What does the Bible say about poverty?
By / Sep 5

The homeless man on the sidewalk waved. I waved back as I turned the corner. I didn’t know his story. If I’m honest, I didn’t even think about the fact that he had a story. In fact, I don’t even remember his face. I subconsciously noticed that there was a person there, but I didn’t acknowledge his humanity.

Most of us are accustomed to seeing poverty around us in some form, whether as a distant issue or a personal reality. As believers, how are we supposed to respond to the poverty we encounter? And how does the Bible speak to this issue?

When we hear the word “poverty,” we don’t often think of specific people and needs. It causes us to consider a broad issue while being able to safely ignore all of the individuals who are personally affected by it. When Scripture references “the poor,” on the other hand, it encourages us to see people as people. The poor are people with faces and names and stories. The poor are people with fears and doubts and questions. The poor are every bit as human as anyone else.  

Who are the poor?

Anyone who lacks “sufficient money to live at a standard considered comfortable or normal in a society[1]” is considered poor. There are many reasons someone could be poor. Sometimes poverty is the result of foolish decisions (Prov. 6:10-11, 10:4, 14:23), and other times poverty is no fault of one’s own (John 9:3). Often, systemic injustices contribute to the cycle of poverty (Psa. 12:3; Isa. 10;1-3; James 5). Poverty, though, does not deprive a person of his or her humanness. Everyone bears the image of God because we are humans—created by God and made in his image. The reason for someone’s poverty shouldn’t determine the value we place on him or her, and the way we treat the poor around us is a reflection of how we view their Maker (Prov. 14:31). 

What does the Lord require of you?

Throughout Scripture, God reveals his heart for the poor. We see God’s concern for poor people when he speaks of the injustices toward them. Consider the prophets Amos and Micah. Although they were both ultimately getting at Israel’s heart-issue, in the process, they addressed God’s concern for the poor, God’s judgment on those who abuse the poor, and the reality of systemic injustice and the cycle of poverty. 

The reason for someone’s poverty shouldn’t determine the value we place on him or her, and the way we treat the poor around us is a reflection of how we view their Maker (Prov. 14:31). 

In the cities where Amos was prophesying, people were faced with unexpected food shortages (Amos 4:6-9). Those who maintained some measure of wealth clung to it by exploiting their poor neighbors (Amos 5:11-13). In this time of need, the righteous were not standing for justice. Amos tells Israel that without justice, there is no righteousness (Amos 5:7). There should be no disconnect between the Christian’s work and worship. Justice and righteousness should flow from the same heart (Amos 5:21-24). Wealthy Israelites were showing contempt for the poor among them, so when Amos told of the coming punishment, he said that the wealthy would be the first to go into exile (Amos 6:1-7). The complacent heart of the wealthy was not a heart aligned with God’s heart. And because God cares for the poor, he proclaims judgment on those who trample the poor—those who do not leave anything behind for the alien, widow, or orphan to glean from and those who exploit the poor in order to gain power (Deut. 24:19; Amos 8:2-8; Micah 2:1-3, 7:1-2). The poor are a people God cares about, so he will not withhold judgment from those who abuse the poor. 

In light of God’s care for the poor people among us, how should we treat them? We should begin by remembering the words of Micah: “Mankind, he has told each of you what is good and what it is the LORD requires of you: to act justly, to love faithfulness, and to walk humbly with your God” (Micah 6:8). This should guide us as we seek to care for poor people the way that God does. Jesus perfectly exemplified the heart of God and didn’t neglect the poor or their needs. In fact, he tenderly cared for the poor and often spoke about how we should treat them.

Furthermore, in Paul’s letter to the Ephesians, he tells the church that we should work so that we have enough resources to be able to give to those who are in need (Eph. 4:28). This call to give to those in need is reiterated throughout Scripture. And when we give, the attitude of our hearts matters. We are to give generously and without a grudging heart (Deut. 15:10). We should not be manipulated into giving, and we should not be reluctant in our giving. God desires for us to give cheerfully (2 Cor. 9:7). The Christian’s calling to give to those in need is not a checklist item that must be completed in order to be in good favor with the Lord. It is an opportunity to reflect the extravagant love of God to our neighbors.

As we use the voice and the opportunities God has given us to pursue justice for the poor and to help them get food and shelter, we may be surprised at how much the poor can teach us and help us to grow. We have neighbors who understand what it is to have no place to lay their head or who cling tightly to Jesus day after day because they know that they can not place lasting hope in a paycheck or a home (Luke 9:58). As we seek to truly love these neighbors, we should learn all we can from them, watching how God will shape our hearts through their example. 

As Christians, we must be intentional in truly loving the poor people among us as we seek to serve them. It is easy to give away some unwanted clothes or to serve a bowl of soup, but really loving the homeless man on the corner is much harder. It requires relationships—as messy and inconvenient as they can be. It means asking about and listening to the needs of the person sitting across from us rather than assuming that we know what she needs. It means empowering an individual to be self-sustaining rather than causing him to be another person depending on us. Genuinely loving someone is hard, but in the power of God’s Spirit, we can truly love our neighbors as ourselves. 

Learning how to serve the impoverished
By / Jul 19

John Barry’s Jesus' Economy is a recent release discussing the need for Christians to be involved in holistic poverty alleviation efforts. Barry makes the argument that Christians should be active not only in helping to meet the spiritual needs of people through gospel sharing, but also in working to meet their physical needs and empowering them to be self-sufficient. Barry is the CEO of a Christian nonprofit after which the book is named. Jesus’ Economy was an inspirational, thought-provoking read and included practical tips for Christians seeking to address poverty. Though there were some significant weaknesses to the book, it is clear that Barry’s desire is to be gospel-centered in his approach to poverty alleviation. 

Strengths 

Barry’s contribution to this discussion is truly stirring and intriguing. His experience working with people facing many forms of poverty provided readers with some very moving anecdotes. He has spent a fair amount of time working in impoverished areas both in the United States, such as with homeless shelters, and abroad, specifically in impoverished areas of India. His biblical literacy is well utilized to get people thinking about how Jesus related to the impoverished and how that should inform us today. With this, he clearly strives to keep his approach gospel-centered, modeled after the ministry of Jesus and concerned about the whole person. 

A tendency among some Christian social justice proponents is to lose the message of the gospel and the need for spiritual salvation in humanitarian efforts, but Barry is faithful to fight against that pull. He also offers wisdom from research and experience as to how to effectively help the poor, such as through his knowledge of microloans and their effectiveness, especially emphasizing the need for the creation of jobs. Part four of the book, in particular, includes excellent advice for individual Christians on topics including but not limited to evaluating nonprofits to support and interacting well with the homeless community. These are some clear strengths of Jesus’ Economy.

Weaknesses

One weakness of this book is Barry’s oversimplification of some very complicated issues. There is room for graciousness here in recognizing that he was taking on a broad topic that could really be (and has been) broken up in more narrowly focused books. However, if the aim here was (as it seems) to give a wide overview and a handbook-style guide to the issues of poverty, then more care should have been given to addressing the more difficult and controversial subtopics. 

Two examples are the author’s handling of the topic of capitalism and that of spiritual gifts. These are significant auxiliary topics that come up when discussing approaches to physical poverty alleviation. At points, Barry discusses Western ideas of business and capitalism in ways that come across as critical, but not constructive. For example, he points out that it is the "preference on business trips to set up meetings with the wealthy instead of the impoverished," (Barry 74).

Regarding spiritual gifts, Barry makes bold continuationist statements without making much of an argument for such a view, implying that miraculous healings are an essential part of ministry among the poor. Whether or not such a concept is true, the tone of the text could leave some readers who are either cessationists or simply undecided in their view feeling belittled or confused.

Another weakness of this book was the initial argument for why Christians should be involved in physical poverty alleviation efforts. As someone who agrees that this should be the case, I was eager to hear a well-formulated argument from Scripture, the author’s experience, and reason, yet I was left wanting more. I was inspired, but not convinced. 

Instead of being persuaded or even just affirmed in my view, there was language used that could make one uncomfortable. The author makes statements that the good news of the gospel is “full spiritual and physical renewal,” (7). He speaks of empowering people to “realize their dreams” and Christians “bringing” the Kingdom of God (10, 32). This language is potentially dangerous. It carries some social-gospel and perhaps prosperity-gospel tones that it seems the author does not intend. The context of such statements is within explaining why physical and spiritual poverty ought to be addressed in tandem, but it’s not enough. Readers are left with some phrases that could be troubling to the more theologically minded, and misleading to those who are less so. 

Overall, Barry’s work is a fair contribution to the discussion of poverty alleviation among Christians. His work with Jesus’ Economy sounds worthy of support, and his advice to Christians seeking to serve discerningly the impoverished is generally helpful. Barry’s passion for the cause of the gospel is clear, and we certainly need more voices like his in these conversations. Yet, the shortcomings of this book leave me hesitant to recommend it without some of these several important caveats. 

5 facts about the ‘war on poverty’
By / Jan 7

Fifty years ago today, President Lyndon B. Johnson launched the 'war on poverty.' Here are five facts about this effort to eradicate poverty in America.

1. The phrase "war on poverty" came from Lyndon Johnson’s 1964 State of the Union Speech, in which the president said:

This administration today, here and now, declares unconditional war on poverty in America. I urge this Congress and all Americans to join with me in that effort.

It will not be a short or easy struggle, no single weapon or strategy will suffice, but we shall not rest until that war is won. The richest Nation on earth can afford to win it. We cannot afford to lose it. One thousand dollars invested in salvaging an unemployable youth today can return $40,000 or more in his lifetime.

Poverty is a national problem, requiring improved national organization and support. But this attack, to be effective, must also be organized at the State and the local level and must be supported and directed by State and local efforts.

For the war against poverty will not be won here in Washington. It must be won in the field, in every private home, in every public office, from the courthouse to the White House.

2. Within four years of that speech, the Johnson administration enacted a broad range of programs, including the Economic Opportunity Act (1964), which provided the basis for the Office of Economic Opportunity (OEO), the Job Corps, Volunteers in Service to America (VISTA), Upward Bound, Head Start, Legal Services, the Neighborhood Youth Corps, the Community Action Program (CAP), the college Work-Study program, Neighborhood Development Centers, small business loan programs, rural programs, migrant worker programs, remedial education projects, and local health care centers.

Other important measures with antipoverty functions included an $11 billion tax cut (Revenue Act of 1964), the Civil Rights Act (1964), the Food Stamp Act (1964), the Elementary and Secondary Education Act (1965), the Higher Education Act (1965), the Social Security amendments creating Medicare/Medicaid (1965), the creation of the Department of Housing and Urban Development (1965), the Voting Rights Act (1965), the Model Cities Act (1966), the Fair Housing Act (1968), several job-training programs, and various urban renewal-related projects.

3. From the beginning on the war on poverty until 2012, local, state, and federal spending on welfare programs has totaled 15,000,000,000,000. Currently, the United States spends nearly $1 trillion every year to fight poverty. That amounts to $20,610 for every poor person in America, or $61,830 per poor family of three.

4. When the War on Poverty was announced in 1964, 33 million Americans were in poverty and the poverty rate was 19%. Today, approximately 46.5 million Americans live in poverty and the poverty rate is 15%.

5. The poverty rate among married couples is only 6 percent. Among married couples who both have full-time jobs the poverty rate is practically zero (0.001%). The poverty rate among single-dads/moms is much higher: 25% for single dads / 31% for single moms.