Food Stamps, Tax Breaks for Poor in Stimulus Bill

February 12, 2009 - 6:16 PM
More than 37 million Americans live in poverty, and the vast majority of them are in line for extra help under the giant stimulus package coming out of Congress. Millions more could be kept from slipping into poverty by the economic lifeline.

Sen. Arlen Specter, R-Pa., center, speaks to reporters on Capitol Hill in Washington, Wednesday, Feb. 11, 2009, accompanied by, from left, Sen. Susan Collins, R-Maine, Sen. Daniel Iouye, D-Hawaii, Sen. Ben Nelson, D-Neb., Senate Majority Leader Harry Reid of Nev., and Sen. Olympia Snowe, R-Maine. (AP Photo/Susan Walsh)

Washington (AP) - More than 37 million Americans live in poverty, and the vast majority of them are in line for extra help under the giant stimulus package coming out of Congress. Millions more could be kept from slipping into poverty by the economic lifeline.
 
People who get food stamps - 30 million and growing - will get more. People drawing unemployment checks - 4.8 million and growing - would get an extra $25, and keep those checks coming longer. People who get Supplemental Security Income - 7 million poor Americans who are elderly, blind or disabled - would get one-time extra payments of $250.
 
Many low-income Americans also are likely to benefit from a trifecta of tax credits: expansions to the existing Child Tax Credit and Earned Income Tax Credit, and a new refundable tax credit for workers. Taken together, the three credits are expected to keep more than 2 million Americans from falling into poverty, including more than 800,000 children, according to the private Center on Budget and Policy Priorities.
 
The package also includes $3 billion emergency fund to provide temporary assistance to needy families.
 
There are other, more indirect ways that the stimulus package is likely to benefit poor people.
 
For example, cash-strapped states will get an infusion of $87 billion for Medicaid, the government health program for poor people, and that should help them avoid cutting off benefits to the needy. In addition, more federal dollars will flow to high-poverty areas for education programs and preventing homelessness.
 
Advocates for the poor say that directing stimulus money to the neediest Americans makes sense because they're the most likely to put cash back into the economy quickly.
 
"Poor people just spend money faster, because they're really living at the edge," said Elizabeth Lower-Basch, a senior policy analyst at the private Center for Law and Social Policy.
 
Sharon Parrott, a senior analyst at the Center for Budget and Policy Priorities, said that while the benefits provided under the stimulus program are short-term, they could have a lasting impact on families by helping them maintain stable housing and avoiding disruptions in schooling.
 
Opponents of the stimulus bill are skeptical that the expanded benefits will ever be allowed to expire, and question whether they're warranted in the first place.
 
"This is the largest expansion of welfare in the history of the country," said Robert Rector, a senior research fellow at the Heritage Foundation. "It's all in the form of one-way handouts."
 
The plan does, however, have some steps to get people back to work.
 
For example, a program set to expire in June lets people keep their Medicaid coverage for up to a year when they leave welfare for a job. The stimulus package keeps that program alive until the end of next year.