Over the last decade, the gap between the wealthiest and those with the least has grown considerably – since 1980, real median household income has grown four times faster for the top 10 percent of households than it has for middle-income households. As the recently released Census data confirms, the effects of the recession continue to impact millions of low-income families. Prolonged levels of high unemployment and reductions in household income have caused an additional 2.6 million Americans to fall into poverty from 2009 to 2010. The poverty rate is even more severe for children, with 22 percent falling below the poverty line. These numbers are especially stark for minority communities: over 30 percent of Hispanic, African American, and Native American children today live in poverty.
Today,the White House released Creating Pathways to Opportunity, a report that highlights steps the Administration has taken to reverse these trends and create opportunity for all Americans. The President has fought repeatedly for policies to help more Americans climb the ladder to the middle class. That work began with the Recovery Act, which helped increase employment by up to 3.5 million workers at the end of 2010 according to the Congressional Budget Office. And according to the Center on Budget and Policy Priorities, it kept more than six million Americans above the poverty line in 2009 – from enhanced Supplemental Nutrition Assistance Program benefits that ensured more than 45 million low-income Americans had the means to put food on the table to initiatives to rehabilitate homes and stabilize housing prices in 13,000 neighborhoods nationwide suffering from concentrated foreclosures. The President continued that fight with the December 2010 tax package that continued the expansion of the Child Tax Credit and Earned Income Tax Credit, which will benefit nearly 16 million families with 29 million children. That same deal helped more than nine million students afford college, through extension of the partially refundable American Opportunity Tax Credit, and secured a critical one-year extension of unemployment insurance benefits.
When considered together, the President’s actions have made a significant impact on low-income communities in five specific areas:
- Rewarding Work. From putting more money in the pockets of working families to investing in initiatives to help workers remain connected to the workforce and gain new skills, the President has made historic reforms to reward work. The President secured the Making Work Pay tax credit in 2009 and 2010 and then a payroll tax cut that amounted to a 2 percent raise for working Americans in 2011. In addition, the President secured historic expansions in refundable tax credits for low-income families. Additionally, through the Recovery Act, over 260,000 adults and youth were placed in subsidized jobs and an additional 367,000 low-income youth received summer employment.
- Reforming America’s Education System. To further empower Americans in their climb out of poverty and into the middle class, the President has made historic investments and reforms in education from cradle to career – from launching a $500 million fund focused on improving state early learning systems to doubling the funding available for Pell Grants for low-income students. And as a result of the groundbreaking Race to the Top initiative, more than 40 states have raised standards, improved assessments, and invested in teachers to ensure that all of our children receive a high-quality education. The Obama Administration has also secured $40 million over the past two years to develop the Promise Neighborhoods initiative – modeled off of the Harlem Children’s Zone – to provide communities with the cradle through college continuum of services.
- Health Security for American Families. The President has also taken historic steps to ensure greater access to health care for the neediest Americans. Within a month of taking office, the President signed the Children’s Health Insurance Program Reauthorization Act into law, expanding health coverage to more than 4 million low-income children who would otherwise go uninsured. And because of the Affordable Care Act, 34 million Americans will become insured by 2021 as a result of provisions expanding Medicaid coverage for adults up to 133 percent of the poverty level. Indeed, the Affordable Care Act is already working to expand coverage: nearly one million more young adults have gained access to health insurance because of this critical new law.
- Investment in Small Business and Community Development. The President has also consistently supported investments in small businesses that in turn invest in low-income communities. Through measures like the Small Business Jobs Act, the President has signed into law 17 small business tax cuts, established new initiatives to expand access to credit, and enhanced SBA lending programs.
The President has also provided additional support to Community Development Financial Institutions that lend to small businesses in the hardest-hit rural and urban communities and has also proposed to build on historic investments in the New Markets Tax Credit by expanding it from $3.5 billion to $5 billion in his FY2012 budget proposal. This will make it easier for community development entities to attract private-sector funds for investment in startups and small businesses operating in lower-income communities.
- Mitigating the Impact of the Housing Crisis. When the President took office in January of 2009, the housing market had seen major losses for 30 straight months, slashing home equity in half which combined with the recession left many communities struggling economically. To begin rebuilding our housing market and economy, the President jump-started mortgage loan modifications, which help to keep families in their homes. More than 4 million families have had their mortgages permanently modified since April, 2009 – nearly twice the number of foreclosures which occurred in that time. And to help over 1 million Americans avoid homelessness, the President provided $1.5 billion through the Recovery Act for the Homeless Prevention and Rapid Re-Housing Program.
Most recently, to continue the fight to create opportunity, the President announced the American Jobs Act, which would put Americans back to work and put more money in their pockets. The American Jobs Act will provide:
- A new Pathways Back to Work Fund will provide hundreds of thousands of low-income youth and adults with opportunities to work and to achieve needed training in growth industries. The Fund will support three things: i) summer and year-round jobs for youth, building off of successful programs that supported over 367,000 such jobs in 2009 and 2010; ii) subsidized employment opportunities for low-income individuals who are unemployed, building off the successful TANF Emergency Contingency Fund wage subsidy program that supported 260,000 jobs in 2009 and 2010; and iii) promising and innovative local work-based job and training initiatives to place low-income adults and youths in jobs quickly.
- Investments to rebuild and modernize infrastructure, which include a school construction initiative that will modernize 35,000 public schools, with a focus on the school districts with the largest numbers of children in poverty; a new Project Rebuild initiative to rehabilitate and refurbish hundreds of thousands of vacant and foreclosed homes and businesses in communities that have been hardest hit by the housing crisis, building off successful models from the Neighborhood Stabilization Program; and a new training initiative to expand infrastructure employment opportunities for minorities, women, and socially and economically disadvantaged individuals.
- An extension and expansion of the payroll tax cut passed last December, which will boost the incomes of virtually all 160 million American workers, and a tax credit to provide up to $4,000 per worker for businesses who hire individuals who have been looking for a job for 6 months or more.
- An extension of unemployment insurance that will ensure that 6 million Americans will not lose their unemployment insurance benefits, while encouraging reforms that will help get the long-term unemployed back to work, armed with lifelong skills.
This Administration will continue to focus on putting teachers in the classroom, police officers on the beat, and construction workers back on the job rebuilding our schools, roads, and bridges. The next step is for Congress to take up each individual piece of the American Jobs Act and vote for these common-sense measures that independent economists have said will grow the economy and lead to nearly two million jobs. Because with so many Americans out of work and so many families struggling, we can’t take “no” for an answer.