At the start of the pandemic, after Graciela Flores’ husband lost his job, the couple were so broke they could barely afford to put gas in their car. It was easy for her to imagine where things were going: food stamps, no new school supplies for their three children, phone debts and water bills. Entering a cycle of extreme poverty that they had worked hard to avoid.
“We don’t want to be a part of this,” she said. “We would have lost our home.
Flores, of the Montbello neighborhood in Denver, said the family had so far avoided this plunge only with government cash assistance in the event of a pandemic, particularly in the form of stimulus checks and the recently expanded child tax credit – $ 300 per child per month.
“With this money, we paid part of our rent, we bought food. We can afford school supplies, ”she said. “Basic human needs”.
Its story is part of a trend in Colorado and across the country: Despite the recession that followed the onset of COVID-19, poverty actually declined in 2020, according to US Census Bureau data released in September.
The census reports that the “supplementary measure of poverty” – a data point that takes into account a household’s money and benefits, making it a more comprehensive measure than the basic poverty rate – has been passed. from 12% to 9% nationally in 2020. This is the largest drop since at least 2009.
In Colorado, the measure edged down, now standing at around 11% – tied for the lowest here in more than a decade.
Luke Teater, deputy director of the governor’s budget office, told state budget officials during an economic forecast presentation last month that take-out was clear.
“Despite the significant job losses and loss of wage income in 2020, the strength of the policy response means that we have in fact seen poverty decrease,” he said.
But state senator Dominick Moreno, a Democrat from Commerce City who chairs the state’s Joint Budget Committee, said poor individuals and families should not count on this to continue. He said that while a recipe for poverty reduction – giving people money – seems clear, government cash assistance to meet basic needs was actually more of an emergency policy.
“It’s not rocket science. If people have enough to live on, poverty measures go down and a host of other social problems are alleviated, ”Moreno said. “But I don’t really see a sustainable path to pursue them in the future unless there is this support from the federal government. Certainly in the state we don’t have the resources to do it.
Colorado cannot deficit spending and it cannot raise taxes without the approval of the voters. It has a fixed income tax that applies the same rate to the poor and the rich, and it actually went down last year and will be again this year, to 4.5%. This means the state cannot afford giant new social programs without cutting or squeezing the bones of a host of other core government services.
For reference, it cost the state $ 168 million just to send about 400,000 people direct payments of $ 375 just once, a year ago. It would cost $ 2 billion – about a sixth of all state general fund spending – to send these payments monthly for even a year.
This adds to the obstacle of political will. The concept of endless cash payments to the poor remains a third rail even in this Democratic-controlled state.
“The best way out of poverty is with a job,” said Republican State Representative Kim Ransom of Douglas County, who sits on the budget committee with Moreno. “If we want to try and keep people out of this cycle, giving them government money is not sustainable and it’s not even nice. People want to take care of their families, their children and themselves. They don’t necessarily want to be addicted their entire lives.
The federal government is also controlled by Democrats, but unlike Colorado, it can spend a deficit and rewrite tax codes. But the party’s narrow trio – the White House and both Houses of Congress – have so far failed to approve any lasting cash aid that people like Flores have relied on. Stimulus payments have ended, and extended federal unemployment benefits have ended.
Supporters of the child tax credit, including U.S. Senator Michael Bennet, D-Colorado, are only asking to extend it for a few years after the current expanded version expires at the end of the year.
This credit is expensive, but an August study by Columbia University found that its extension would generate eight times more wealth – in addition to improving education and upward social mobility, while lowering costs for the government related to health care and incarceration.. Jill Hunsaker Ryan, director of the state’s health department, said Friday that expanding child tax credits had “the potential to lift 40% of Colorado’s children out of poverty.”
Silas Atkins of Boulder said he saw the benefits firsthand. The father of two was fired in March 2020 and divorced during the pandemic. He relied on government help to move into affordable housing, which made his children feel comfortable.
“The first time I saw someone say ‘poverty is a political choice’, I didn’t understand what he meant,” he said. “But it’s true. It’s a decision to spend money on other areas and not on basic human rights and the needs of the people.
And studies show that people use cash assistance heavily for basics, as did Flores and Atkins. Marisa Westbrook, a doctoral candidate at the University of Colorado at Denver, observed it during a two-year study in which she followed 35 people from the Westwood neighborhood.
“For the majority of my participants, any form of cash assistance goes towards rent and utilities. And a lot of people are talking about how, beyond cash assistance, they are really using food banks, ”Westbrook said. “It will be an ongoing problem without constant support, constant financial support.”
Moreno, as Colorado state’s top fiscal decision maker, doesn’t dispute that it boils down to political choices.
“As a country, we have made a conscious decision not to make these really essential investments to help people succeed,” he said. “There is still this mentality in this country that everyone is going alone… but we have seen time and time again that this is not really an option for people.”