End of pandemic-era safety net programs increased poverty

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U.S. supplemental poverty rate among people under 18

The expected spike in poverty — particularly child poverty — between 2021 and 2022 shows the impact of letting major pandemic-era safety net program expansions expire, a policy experiment with no precedent in the U.S.

Why it matters: The pandemic programs were enacted as temporary measures. But their expiration still stings for the Americans who experienced an economic boost only to lose it — and there’s more to come.

Driving the news: Real median household incomes fell by 2.3% in 2022 and the poverty rate increased by 4.6 percentage points to 12.4%, according to data released yesterday by the U.S. Census Bureau.

Child poverty more than doubled fr0m 5.2% in 2021 to 12.4% in 2022.

A separate poverty measure that doesn’t include government programs found no significant change in poverty from 2021 to 2022 — highlighting the impact of pandemic-era aid.

The increase in poverty reflects the expiration of the expanded child tax credit and the end of stimulus payments — which occurred as inflation caused the cost of living to rise.

Although more people had health insurance in 2022 than in 2021, this was almost certainly a fleeting phenomenon that has been undone by the unwinding of pandemic-era Medicaid policies.

Between the lines: The conventional wisdom used to be that Washington didn’t let benefit programs expire, not least because taking benefits away from people is politically unpopular.

But that’s exactly what happened last year, despite some calls to extend the enhanced child tax credit.

The economy has subsequently risen to being a dominant issue heading into the 2024 election — and one that President Biden is on the losing side on, according to public opinion polling.

But Republicans’ economic priorities have largely been centered on reducing government spending. “There’s a real opening on the right for some bold family policy,” said Joe Grogan, director of the Domestic Policy Council under the Trump administration.

What they’re saying: “The rise reported today in child poverty is no accident—it is the result of a deliberate policy choice congressional Republicans made to block help for families with children while advancing massive tax cuts for the wealthiest and largest corporations,” Biden said in a statement.

What we’re watching: Government relief programs have continued to expire this year, and more still are coming.

Student loan payments are coming due again next month for the first time in three years, although the Biden administration has announced a new plan that will slash many borrowers’ monthly payments.

At least 6.4 million people have been disenrolled from Medicaid already, per KFF, the majority of which had their coverage terminated for procedural reasons.

And families with children may feel even deeper economic pain this fall after pandemic-era funding for child care providers expires, which is expected to cause thousands of child care centers to close and millions of children to potentially lose care.

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