Poverty levels could escalate without targeted stimulus
Now, we’re finally getting somewhere.
Beyond the boorish political posturing and ideologically driven amendments, there are some encouraging elements in the American Recovery and Reinvestment Act that would help alleviate the effects of the recession.
The Center for American Progress notes that 169,700 more Coloradans are at risk for falling into poverty. Fifty-eight percent of these folks would be so deeply impoverished that their annual income would amount to less than half the 2009 poverty rate — a minuscule $11,000 per year for a family of four.
The economic downturn means hard times for millions of Americans. If unemployment rates reach double-digits, as some economists fear, nearly 7 million people will lose their jobs, more than 7 million will lose their health coverage, and more than 12 million will fall into poverty.
The economic recovery legislation before Congress would cushion the blow for the most vulnerable families by cutting taxes and strengthening the safety net, while boosting the economy and creating jobs to make the middle class stronger and larger. Helping struggling families is not only the right thing to do in hard times; it is also one of the most cost-effective ways to fight the recession. Aid for low-income families generates five times more economic activity than aid for high-income families, according to some estimates, because these families are more likely to spend the money immediately on necessities rather than saving it.
There’s still much to reconcile between the House and Senate bills. Namely, the Senate version emphasizes tax cuts for companies (pdf) that will have little to no stimulative effect, according to the Congressional Budget Office. That’s coupled with a stingy Senate offering $40 billion less in direct assistance to states facing massive budget deficits.
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