#CensusData

Jared Bernstein of the Center on Budget and Policy Priorities on this year’s Census data on poverty, income, and health insurance — PLUS: TalkPoverty’s Pat Garofalo on why the next recession will be far more painful than it needs to be, particularly for low-income folks. Subscribe to Off-Kilter on iTunes.

Every year in mid-September, the U.S. Census Bureau releases its annual snapshot of poverty, income, and health insurance. And every year, economists tear into the numbers to see what they tell us about the consequences of federal and state policy decisions for everyday families. To help unpack what was in this year’s data release, Rebecca sat down with Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and former chief economist to Vice President Biden, to demystify the myriad numbers and data points and decode the story this year’s data have to tell.

Stock markets tanked in mid-August after investors got spooked by economic indicators they view as early warning signs of the next economic recession. While recessions aren’t happy news for anyone, the next recession promises to be far more painful than it needs to be — particularly for folks who are already struggling to stay afloat, as Pat Garofalo writes for TalkPoverty. Rebecca sat down with him to learn more.

This week’s guests:

• Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and former chief economist to Vice President Biden
• Pat Garofalo, managing editor at TalkPoverty.org

For more on this week’s topics:

• For more from Jared Bernstein, check out his blog post on the new Census data over at On the Economy, and for the tl;dr, check out Rebecca’s tweet thread with key takeaways.
• Read Pat Garofalo’s explainer for TalkPoverty, “The Next Recession Will Be Harder Than It Needs To Be. Here’s Why.”

This week’s transcript:

♪ I work and get paid like minimum wage

sights to hit the class by the end of the day

hot from downtown into the hood where I stay

the only place I can afford ’cause my block ain’t saved

I spend most of my time working, trying to bring in…. ♪

REBECCA VALLAS (HOST): Welcome to Off-Kilter, the show about poverty, inequality, and everything they intersect with, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas. This week on Off-Kilter, early warning signs of the next economic recession have many investors and economists starting to get spooked. Meanwhile, advocates for low-income folks are starting to ring the alarm bell that the next recession will likely be far more painful than it needs to be, particularly for families already on the economic brink. I talk with Pat Garofalo, managing editor of TalkPoverty.org about why that is and the state and federal policy actions underpinning those concerns.

But first, every year in mid-September, the U.S. Census Bureau releases its annual snapshot of poverty, income, and health insurance data. And every year, economists tear into the data to see what they tell us about the consequences of federal and state policy decisions for everyday families. To help me unpack what was in this year’s data release, I sat down with Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and former chief economist to Vice President Biden, to demystify the numbers and data points and decode this story this year’s data have to tell. Let’s take a listen.

Jared, thanks so much for coming back on the show. It’s great to hear your voice.

JARED BERNSTEIN: Thank you for inviting me. It’s always a pleasure to hear you and talk to you about these things.

VALLAS: So, you have been digging, as have many of the wonks out there, into this latest census data release on poverty, on income, on health insurance. There is, as always, a tremendous amount in this particular data release. And so, I’m really grateful to you for making some time to help demystify some of what’s in there. It feels like we have to start with what it tells us about health insurance. That was really one of the big reveals from this release. So, tell us a little bit about what it tells us on the health insurance front.

BERNSTEIN: Correct. That was just, to many of us, kind of a jaw-dropping result. What we learned was that health coverage significantly deteriorated last year. Now, these data are for 2018. The census actually gives us a couple of different data points on that. But the main one that they focused on showed that the share of the uninsured — so, this is the percent of Americans without insurance — went up for the first time since 2009 from about 8 percent a year to 8 and a half percent. So, in 2018, about 28 million people lacked health coverage, and that’s an increase of 2 million more people over the previous year.

So, you might ask yourself: the economy’s pretty good, the economy’s pretty strong, you have the Affordable Care Act was in play certainly very much tamping down that uninsured rate. We had a positive trend going in that regard. But we saw last year that trend reversed, and I think that’s as you suggested, the most important take from report.

VALLAS: And just to put that in context, because people may not, like you do, have charts available as there they’re following along in this segment looking back retrospectively to what we’ve been seeing up until this point. But this is particularly important, and as you said, jaw-dropping of a takeaway from this data release because it’s the first time we’ve seen the uninsured rate go up, so go in the wrong direction since the Affordable Care Act took effect.

BERNSTEIN: Correct. And you’re right to bring in the trend. I actually think that’s an essential way of understanding these numbers. The trend in the percent of people uninsured was really knocked down by the Affordable Care Act. And now, I’ve been in this business for decades, and it’s actually a lot more rare than you’d think, Rebecca. I think you probably know this. For a policy to be enacted, and then you turn around and the next thing you know, the target of that policy is responding in precisely the way you wanted it to. It used to be that close to 16 percent of Americans were uninsured. That fell to the kind of numbers we were just talking about, to around 8 percent in 2017. But last year, that trend reversed course, and we now have more uninsured people than we did even though the ACA is still the law of the land. Now, why that trend reverse course has a lot to do with policy actions designed to counteract the benefits of the health coverage, and we can get into that. But that trend reversal, to me, was the most important finding from the report.

VALLAS: We often say on this show policy matters, right? I mean it’s sort of sometimes when you read in the mainstream media about trends or these kinds of numbers, it’s easy to sort of see them and have it almost appear as though policy outcomes are falling out of the sky. But they are the result of very specific policy choices, and progressives have been shouting from the rooftops for the past couple of years that Trump is sabotaging the Affordable Care Act. And that’s almost become, to some people, a tired talking point that maybe they’ve heard so many times that it’s lost its meaning and its punch.

BERNSTEIN: Mmhmm.

VALLAS: But this is the first, if I understand it correctly, this is the first time we’re actually seeing in the numbers the proof in the pudding that the actions by this administration to dismantle the Affordable Care Act through executive action — because they weren’t able to do that through repeal, through Congress, through legislative action — it’s finally bearing fruit in the way that this administration hoped.

BERNSTEIN: Yeah. Let’s dig down into that a bit because everything you said there is correct and important. I think especially I must say I hadn’t quite thought in this regard, this idea that we said it so much it doesn’t even resonate anymore. And that’s why I think the report that came out yesterday is really worth elevating. This report as a lot of numbers in it. It’s for last year. Its news cycle tends to be about half a day. [chuckles] And I think that that is really a problem if that’s the case. That we need to try to plug this information into the policy debate, the poverty debate, even the political debate. So, let’s get down to that increase in the uninsured rate a bit.

So, another striking number that’s very closely related there that came from the report is that Medicaid coverage was down 7/10 of a percent, OK? So, insurance, the share of people with insurance fell. We know that. But we don’t know just from that number what the source is. It could be that people lost jobs, and so they lost their employer-based coverage. Well, in fact, people gained jobs last year, so that couldn’t possibly be the answer. And in fact, you’d kind of expect health coverage to do better in a year where the unemployment was low, the job market was strong. So, it can’t be that. Well, here is a kind of smoking gun. Medicaid coverage — now, Medicaid we know is health coverage for low-income people or for kids through the CHIP program and through adults particularly through the ACA and the expansion states — down 7/10 of a percent. So, this is a powerful signal that the policies that are going after the ACA are having some impact. And what are those policies?

Well, I was reminded by my colleagues at CBP on practically day one in office, the Trump administration was calling on federal agencies to “waive and delay ACA provisions to the maximum extent permitted by law.” OK, this is not a secret campaign. These folks are gunning for the ACA since they got here. They repealed the individual mandate, which we can get into. That doesn’t take effect till 2019. But the Congressional Budget Office believes it’s probably in these 2018 data. There are anti-immigrant measures that are likely leading immigrants to avoid publicly-provided coverage by Medicaid, even legal immigrants. And that has to do with other draconian policies, anti-immigration policies. There’s been cuts in Affordable Care Act outreach and enrollment assistance. And there’s been work requirements that hassle people off of the Medicaid rolls, along with a pretty wide variety of waivers and other sorts of eligibility barriers that are just explicitly designed to have this kind of an impact. And lo and behold, that’s the impact it’s having.

VALLAS: And sticking with health insurance for a second, there’s a lot more we’re going to get to in a moment, but the health insurance section of this data releases is perhaps some of the most jarring set of information in the entire report. So, I want to stay there for just another minute. On the Medicaid front, another really I’ll call it a smoking gun as well that we see from these numbers has to do with comparisons across states when it comes to Medicaid as well. And that’s another thing that we can draw from these data, is the difference in states where Medicaid has been expanded versus in states where conservative lawmakers have continued to stonewall and refuse to expand Medicaid to allow more people to benefit from that program. What do we know about the differences in those two categories of states?

BERNSTEIN: I don’t have those numbers in front of me. And in fact, I’m not even sure if they’ve been crunched yet. The data just came out yesterday. But I did hear from folks here at least in preliminary terms that the loss in Medicaid coverage came not from the Medicaid expansion states, but as you’d expect, from the states that haven’t taken the expansion.

VALLAS: So, we end up, as we would expect, seeing higher insured rates in states where Medicaid has been expanded, which has been the case up until now. So, continuing to see those differences across those two category of states, although a lot more to be crunched.

BERNSTEIN: Absolutely. Correct. And as I noted, we have to dig into the data further to confirm this, but I think at the end of the day what they’ll find is that the lion’s share of that increase in the uninsured rate from about 8 to 8 and a half percent, that trend reversal that we’ve been talking about, probably comes from a loss of Medicaid coverage, and it’s probably in states without the ACA expansion.

VALLAS: Now, to sort of put one more terrifying layer on this, of course, another shoe that could still drop and that many of us who care about health insurance and, you know, hey, say, humans hope does not drop is of course, the Trump administration’s desire to see the courts strike down the Affordable Care Act altogether. And the numbers have been crunched there about what that would mean if that actually does come to pass. You, out of the Center on Budget and Policy Priorities, and your health colleagues have told us that if that does happen, if that case goes that way and the ACA is struck down by the courts as Trump is hoping happens, we’ll see that uninsured rate nearly double even from the numbers that we’re at today and that you’re talking about now.

BERNSTEIN: Yeah, I think we’re going to snap back to where we were before the ACA. I mean again, the ACA — Affordable Care Act — led to the largest decline in the uninsured rate since the introduction of Medicare and Medicaid back in the 1960s. If you track the percent of Americans without coverage, you see a huge drop back in the ’60s, and then you see a huge drop right after the ACA went into full effect about five or six years ago. And not only could that be reversed, it’s actively being reversed by policies that are hostile to it.

VALLAS: Now, we’ve talked a lot about health insurance so far, and that is a lot of the kind of big takeaways from this report. But the report also looks at incomes. It also looks at poverty. I want to get into those components as well, and that’s a big part of what you’ve dug into, including in a blog post that you did on your blog on the economy and in some tweeting that you were doing digging into these numbers. And so, what is it that we learned about the state of incomes from this report?

BERNSTEIN: Well, those findings were more on trend and generally more positive because the expansion, the economic expansions, was in its 10th year last year and had some momentum. We had low unemployment, we had rising real wages, inflation was pretty low, and that helped lift the earnings of middle- and low-wage workers. There’s some wrinkles in here because there’s just a lot of different ways that those data play out in this report. We did, and some of them are less positive than the scenario I just outlined. But for the most part, we saw earnings help to boost incomes and lower poverty.

So, for example, the poverty rate — everything comes in two flavors in this complicated report — they offer two different poverty rates. The official poverty rate, which is the one that we talk about a lot, it’s the one eligibility for anti-poverty programs is keyed off of. That fell by half a percentage point from 12.3 percent to 11.8 percent. So, that half-a-point drop is a positive development, and I think it relates to some of the earnings numbers we saw. We saw increases in family incomes at the lower end of the scale. We saw median earnings for both men and women go up more than 30 percent in real terms. That’s actually a big gain for those folks. And we saw incomes for families of different types go up as well. So, the median household income for family households, meaning households with two or more people, went up significantly, one or two points. I can’t remember. And the median income for households with just one person — called non-family households — that went up too. Weirdly, when you mush those together, the overall median only went up a little bit less than a percent, and it was statistically insignificant. But I would kind of discount that because I think it has to do with what happens when you mush together two series in a way that just gives a little bit of an anomalous result.

So, you can conclude that income went up based on positive earnings results, and that’s the good news. The less-good news is that income growth is decelerating. It’s growing more slowly now. It’s growing more slowly for white families, for black families, for Hispanic families. It’s growing more slowly as the expansion kind of ages. We’ve already seen job growth slow down a bit. So, that’s one point to consider. I think the other important point — I might even elevate this more — is that if we look at actually where income is, we look at the level of median household income, it’s somewhere around $63,000, median household income, 2018 dollars. It’s precisely where it was in 1999, OK? So, that’s almost 20 years of a period where productivity was up, GDP was up. And yet the median household is just about where it was. So, you have to kind of wrap your head around short-term gains that have been significant and are clearly related to the tight job market and this impact of the long-term structural inequality problem, which has been holding down income growth for middle- and low-income families for decades on end.

VALLAS: And I want to dig into that income side. I want to get back to poverty in just a second. But as I’m listening to you talk about this, we’re seeing these slight improvements, and it’s always great to see improvement. Better than heading in the wrong direction. But as I’m listening to you talk, it’s hard for me not to think about the incredible contrast between this sort of slight, and as you said, decelerating growth trend when it comes to everyday families’ incomes and the corporate profits that are continuing to soar, including helped by Trump’s tax law that offered massive handouts to wealthy corporations. So, here he is, out there talking about this quote-unquote economic miracle happening in the United States. But is it fair to say that we’re watching the rich continue to get lots and lots richer, but everyday families, while they’re seeing slight improvements, are effectively treading water?

BERNSTEIN: I think it’s very fair to make precisely that conclusion when we’re looking over the longer term, which is how many families kind of evaluate their position. I mean folks notice if they’re doing better this year versus next year, but if they’re slogging through and affording housing and health care and sending your kid to college and maybe being able to save something, paying for childcare, folks notice very acutely that that hasn’t gotten any easier for them despite the fact that they’re playing by the rules, staying in the labor market, working, and so on. And yes, same time they happen to be reading their paper about soaring corporate profitability and all the initiatives these folks do that the kind of corporate or donor class can do to avoid paying taxes on those earnings. Yeah, that’s the source of a lot of dissatisfaction, populist anger. You know, you talk to political scientists about how that plays out in politics, but there is very much an acute sense that over the longer term in what economists call a structural versus cyclical kind of a time frame, there’s people who justifiably feel left behind.

I think it’s also important, though, to sort out that there’ve been some positive trends in the near term that are very much related to the tight job market. I don’t think it’s something progressives should ever do to dismiss those benefits because they’re associated with a full employment economy, low unemployment, and disproportionately more opportunities for precisely those folks who are left behind. The benefits of a very tight labor market flow more to middle-, moderate-, low-income folks who really depend on that kind of tautness to get ahead. The problem is again, in that structural sense, is that those periods have been too few and far between over the past 30, 40 years.

VALLAS: In your analysis in your in your blog post digging into these data — and there’s so much in there, but I want to pull out a couple of pieces — you also point to one other key factor that we should not overlook when it comes to some of the wage growth that we’ve seen, particularly at the low end of the income ladder. And that’s the minimum wage increases that we saw in a whole bunch of states in 2018. Talk a little bit about that connection to what we’re seeing in the income numbers.

BERNSTEIN: Right. 18 states raised their minimum wage, lifting the earnings of four and a half million people, according to the Economic Policy Institute. And that is very clearly associated with higher earnings and incomes in those states. I’m quoting the work of Elise Gould, who has focused on this and draws these graphs showing income and earnings growth for states that raised and didn’t raise their minimum wages. And you see a pretty stark difference there. And again, whenever you and I talk, policy is always lurking right behind the curtain as it should. And the idea there is that once again, this is a very simple direct policy. I mean the ACA is not simple, but it is direct. And I know earlier, you pass the Affordable Care Act, the uninsured rate starts to tank. You raise minimum wages, well guess what. Low-income people earn more. Now you have to have a PhD in economics to not understand that because there’s this very common argument that if you raise the minimum wage, the folks who get it are going to be hurt by it. But there’s a very deep and, I think, quite high-quality literature pushing back on that contention.

VALLAS: I’m speaking with Jared Bernstein. He’s a senior fellow at the Center on Budget and Policy Priorities and former chief economist to Vice President Biden. We’re going to take a quick break. More on the census data and what they tell us about health insurance, incomes, and poverties after we come back.

[hip hop music break]

You’re listening to Off-Kilter. I’m Rebecca Vallas speaking with Jared Bernstein at the Center on Budget and Policy Priorities about the census data that just came out this week and what they tell us on a whole slew of fronts, including poverty and income and health insurance and more. We were talking just now about incomes and the connection to policy choices, including state minimum wage increases, which have had a lot to do, he was just saying, with why we’re watching some level of wage growth take place happily, particularly at the low end of the pay scale. And Jared, in your analysis on your blog about the new census data, you also make a really, really interesting point connecting some of the labor market trends that we’ve seen in this tighter labor market and what it’s meant for lower-income folks to, in particular, some of the proposals that we’ve seen from this administration, which is to take health insurance and housing and food away from people who can’t find jobs. They call it work requirements. We know it’s penalizing people who can’t find steady work. And the point you make there is that actually, there’s a lot in these data that really fly in the face of the very premise on which that type of proposal is based.

BERNSTEIN: Precisely. So, you know, I can’t resist a scatter plot even though this is a podcast, not a paper. But if you can just imagine plotting the unemployment rate against changes in poverty, what you’ll find is that — and this, again, won’t surprise our listeners — that when you have low unemployment, poverty goes down. Now, I’ve done some other research that digs deeper into this looking at pretty granularly the labor supply decisions made by low-income people. They are extremely responsive to the labor market. This notion that poor people are sitting out of tight job markets and not taking jobs so they can bilk the government for benefits could only be believed like someone who has very little understanding of how the world works and especially how anti-poverty policy works. The benefits that we’re talking about these days for anti-poverty programs tend to provide nutritional support — that’s SNAP — some housing subsidies, medical coverage. And the bulk of the benefits on kind of a day-to day-basis through work. So, the Earned Income Credit or the Child Tax Credit: these are policies that last year lifted about 8 million people out of poverty. Social Security lifted 27 million people out of poverty. And as you go down the list, those numbers decline. If you look at SNAP is probably about 3 million. Housing subsidies, about the same thing.

The point is that you really can’t survive if you’re a parent with a couple of kids in any way that any of us would recognize as a decent lifestyle without work. The American economy’s conditioned unemployment for able-bodied, working-age people and poor people respond to that incentive. And they do so when the job market heats up. And that’s why I’ve argued, and we’ve argued here at the Center, so strenuously against the idea of putting in work requirements because people already are implicitly required to work by the system we set up, and they do so. What the work requirements do is set up a bunch of B.S. hassle-factor hurdles that people have to get over. I mean we’re talking about low-income people who are often going in and out of jobs, or often, they get whacked by even a small bill or daycare falls through. They don’t have the options of wealthier people. And so, it’s hard to organize if you’re poor, a parent with a couple of kids in any American city. And so, putting these requirements on top of that is really just administrative hassle to nudge people off Medicaid and SNAP. And that’s just one of the administration’s attempts in that regard.

VALLAS: Now, sticking with poverty here for a second, you alluded before to how we saw a continued sort of slight downtick in the official poverty rate, a trend that we also saw last year, and a continued happy trend that obviously, people like you and me who work on reducing poverty in this country very much hope to see in these data every time they come out. That being said, I certainly, in reading this, felt very strongly the need not to make too much of a very slight decline in the official poverty rate considering that the data tell us that we still have 38.1 million people in this country living below that very austere official poverty level, which you and I know bears no resemblance to what it actually takes to afford a basic standard of living in this country.

BERNSTEIN: Well, your intuition is exactly right, and it’s also one that is corroborated by another piece of this report that we haven’t talked about yet. In your last set of comments there, you mention the inadequacy of the official poverty measure. It really is a very inadequate measure. It hasn’t really changed much since the late 1950s when it came online. Certainly hasn’t been updated for some of the advances that we’ve made in anti-poverty programs, nor has it been updated for the increased cost of living in areas that we just discussed: childcare, housing, paying for utilities, and so on. Well, they have something called the supplement: The census has a supplemental poverty measure, and that is not the official measure. So, I haven’t emphasized that thus far, but we should talk about it. First of all, as you correctly mentioned, there’s 38.2 million people officially poor. Under the supplemental measure, there’s over 4,000 more poor people, so 43.5 million are poor. That’s a rate of 13 percent or so. So, about 12 percent are poor officially; about 13 percent are poor under the better measure. But as you kind of alluded to, the better measure didn’t change in 2018. It was about 13 in 2017. It didn’t go down. And that tells you something important. We don’t know exactly why yet, but I think it has to do with the difference in the thresholds.

The poverty threshold in the official measure is just adjusted by inflation. So, inflation was a little bit north of 2 percent last year, so it went up a little bit. But the incomes of near-poor people went up more, and so you had less official poverty. The SPM, or the supplementary poverty measure, the more accurate measure, its threshold is adjusted not by overall inflation, but by the increase in prices of food, shelter, utilities, clothing. And that threshold, I believe it climbed more quickly. And so, more realistically, poverty may really not have gone down much at all last year because low-income people were trying to make ends meet in areas where prices rose faster than average.

VALLAS: And then something you point out, and that we would be absolutely remiss if we didn’t mention, of course, is the massive racial disparities that persist when it comes to poverty rates. It doesn’t look the same when you break down non-Hispanic whites versus blacks versus Latinx folks. We’re talking about multiples of the poverty rate for non-Hispanic whites when you look at those other racial groups. Tell us a little bit about what we see when we break those numbers down by race.

BERNSTEIN: Well, turning to the official numbers again just because they broke things down yesterday, and these differences are fairly constant across the measures, is African-American poverty, about 21 percent in 2018. For whites, it’s about 8 percent. So, blacks are two and a half times the poverty rate of non-Hispanic whites. For Latinx, you have a poverty rate of about 18 percent. Remember for whites, it’s 8. And so, again, multiples of the white rate for non-white folks.

VALLAS: And I find that just particularly important to re-remind us of both because it’s obviously incredibly important to continue to highlight those racial disparities and gaps that persist. But also because Trump has done so much touting of the low African-American unemployment rate that has emerged on his watch, making it sound as though he’s quote-unquote the best president we’ve ever seen for African-Americans.

BERNSTEIN: Well, let’s look at that. I mean we just talked about the differences in poverty rates between say, blacks and whites: 21 percent over 8 percent. Not the same thing with unemployment rates. I mean the unemployment rate in 2018 for African Americans was six and a half percent. For whites, it was three and a half percent, so not quite twice the white rate, but close to it. Three and a half percent unemployment for whites, six and a half for blacks. So, yes, the black unemployment rate has declined. And in fact, it’s declined at a good clip, and that’s a very good thing. It’s an outcome of what I was saying earlier: when the job market improves, folks at the lower end gain disproportionately. You know, it’s sort of the inverse of the old saying when the economy sniffles, economically vulnerable people catch pneumonia. Well, the opposite is true here as well. But while those trends have been positive, the disparity in the levels very much persists.

VALLAS: So, I want to flip back to this supplemental poverty measure, which you were just explaining before. One of the things that it does in — and you started to hit on this, but it’s just such an important point that I really want to dig into it a little bit more deeply before I let you go — and that’s that the supplemental poverty measure does something different, as you said, than the official poverty measure, which is particularly important. And that’s to count programs like SNAP, like Social Security, like rental assistance in how it looks at who is officially poor, or excuse me, who is counted as poor under that alternative measure. And so, one of the things it allows us to do every year when these data come out is to know how many people were protected from poverty by these types of programs. And again, I find that particularly important against the backdrop of an administration trying to dismantle all of the programs that I just mentioned and many more that I didn’t mention. So, would love for you to walk through a little bit in detail what those findings were from this year’s report. And then I would think we would be remiss if we didn’t remind people of some of the attacks on these types of programs that are ongoing as we speak.

BERNSTEIN: Sure. So, it’s funny. When we think of anti-poverty programs, I suspect not everybody thinks of Social Security right out of the gate. But it’s actually the biggest fish in the pond there. 27 million people were lifted out of poverty last year through Social Security. 17 or 18 million of those were elderly people. And while we haven’t done the calculation for this year yet, if you look at just poverty without including Social Security benefits for elderly people, look at elderly poverty without Social Security, you’re going to get a number somewhere around 40 percent, which is just third or fourth world. If you then include Social Security, that goes down to below 10 percent. So, you’re really making a huge difference in the living standards of moderate- and low-income people with Social Security. Refundable credits, refundable tax credits, like the Earned Income Credit, the Child Tax Credit, these are credits tied to work, lifted eight million people out of poverty last year. That’s the second biggest player. The third biggest is nutritional support or SNAP, a little north of 3 million. When you get down to housing subsidies, it’s also about rental assistance, as you said, it’s about 3 million. And then a bunch of other programs: school lunch, child support, TANF, unemployment insurance: those were all a million, but still kind of in the half-a-million to a million range.

So, this gets to, if I may just for a second. We’ve been taking our listeners through a ton of numbers. Let me take this last point we were just discussing and put it in a context of a thematic, my thematic, interpretation of this report that came out yesterday. Because it very much relates to this idea of the effectiveness of these anti-poverty programs and the fact that they’re under attack. We know that despite his rhetoric to the contrary, that there is a significant rearguard desire among conservatives to cut Social Security. So, that would be devastating for folks who depend on it, which tend to be moderate, lower-income people. But there are other actions that are in play right now that would affect some of these other programs. So, under food stamps or SNAP. And I know you’ve talked about this under the categorical eligibility rule, basically.

And you had a great Twitter thread on this yesterday I saw, Rebecca. And this is the idea that the administration is kicking millions of people off the SNAP rolls by disallowing places to keep people on the rolls even if their earnings go up a little bit. Which is kind of pushing back on this cliff effect. So, that’s important. We’ve talked about the work requirements and the negative impact that they’re having on Medicaid. We reference this public charge rule change that threatens to block legal immigrants from seeking the support that they and their kids need. And you and I talked in the past about another really kind of evil initiative to change the way poverty’s measured to make it look like fewer people are poor. We’ve already criticized the official poverty measure of being inadequate to measuring the real challenges facing low-income people. The administration wants to make that worse by essentially making the thresholds even lower relative to what they would otherwise be. And that’ll make it look like more people are poor. And because so many anti-poverty programs are keyed off of the poverty line, it would mean less eligibility for people.

So, let me tie this all together. The report showed basically three things. One was that the economy is generating some important gains for moderate- and low-income people through the tight labor market. The second was that anti-poverty programs work. Social Security, the EITC, the rental assistance, the food support: all of that lifts millions of people out of poverty. Those who are positive trends: the economy and the anti-poverty programs. The third is that current administration policy is successfully reversing the trend in the ACA and leading to more people lacking insurance coverage. Now, what I believe the administration is trying to do here is screw up those first two positive factors so they look a lot like the third one. They’re trying to anti-poverty programs what they’ve done to health coverage. And it’s not for this podcast, but their trade war is wreaking havoc on the overall economy. So, the administration is recklessly endangering the first two positive elements — the economic momentum and the anti-poverty effectiveness — through the trade war on the first count and the measures we just discussed — public charge, rebasing the poverty line, CAT EL in food stamps, and so on — and thereby try to screw up the effectiveness of these programs just like they’ve screwed up the effectiveness of the Affordable Care Act.

VALLAS: And a really timely reminder, since you mentioned that ongoing attack that the Trump administration is waging on the Supplemental Nutrition Assistance Program, our largest food assistance program, which as you mentioned, we learned from the census data protected 3.1 million people from poverty last year. So, a really, really effective program. The numbers bear it out. But as folks have heard on this show many times, and now is the moment to re-remind folks because the deadline is coming up, but that comment deadline. And listeners of this show need no reminder of the importance of public comments because they have seen this many, many times now on this administration’s watch, but that public comment deadline is coming up. It is actually next Monday, the 23rd. So, HandsOffSnap.org is still live and accepting comments. You have not missed your chance. It takes about two minutes to do. I can commit to that because I’ve done it through the comment field, and it really just takes a couple of minutes. So, you have not missed your window to raise your voice and say, no, I don’t want to see over 3 million people lose access to food assistance and half a million kids lose access to free school meals, which is what the Trump administration wants to do by fiat since they didn’t get their way in the farm bill that ended up ultimately protecting SNAP last year.

So, in the last couple of minutes that I have with you, Jared, we’ve talked about the wrong approaches that this administration is taking, the ways that it’s threatening very slight gains, and the ways that it’s trying to do to SNAP and housing and myriad other anti-poverty programs what it has done to health care. What is the policy agenda that you would want to see taken up if this administration were actually trying to fight for the forgotten man and forgotten woman that Trump campaigned on promises to help, or more likely, if we see a change in power come to bear next year in the election?

BERNSTEIN: Yeah, a critically important question. I think in the context of our discussion about this report, it’s actually pretty instructive to take what happened in the report and learn what we can from it about getting to a different set of results where we want them in health insurance and amplifying the positive results on the economy and the anti-poverty programs. Look. On health insurance, if we can have a good, robust debate about a better way to handle this 16, 18 percent of the economy then we’re currently doing. But that’s a different discussion. Right now, based on what we learned yesterday, what we want to do with health care is to expand Medicaid, ACA Medicaid, to states that haven’t taken it up yet. The extent to which that would push in the right direction in terms of, once again, lowering that uninsured rate can’t be exaggerated. Like I said earlier in the call, is an extremely quick-acting, effective policy intervention. So, while we’re having, I think, good progressive discussions about Medicare for All, Medicare for More, Medicare for those who, all those variants, let’s get as much as we can out of the Affordable Care Act by strengthening the exchanges, increasing the subsidies, and providing them higher up the scale to some of the moderate- and middle-income families that ought to qualify, and perhaps most importantly for the low-income population, increasing the number of states that take the Medicare expansion.

Then I think on the employment side, as I mentioned, lots of people in places are being reached by the tight labor market, but lots aren’t. So, I think there needs to be a subsidized employment program to reach those who aren’t reached in its full employment. And we know that there are pockets and places and people in communities that are still left behind. There’s lots to do in those communities, and many of those folks want to work, as I said earlier. This notion that poor people don’t want to or need to work is completely belied by the data. But in some places across the country, there’s just not enough labor demand, not enough opportunities for them. Let’s put those opportunities in place where they’re needed.

And then on the anti-poverty effectiveness, yeah, I think it’s great that 8 million people were lifted out of poverty by refundable credits and 3 million by nutritional support. But I’d like to double those numbers, and I don’t see any reason why not to. I mean the refundable credits are pro-work, so there’s no conservative, shouldn’t be any conservative objection there. And nutritional and food support, not only have we found that those folks, as I mentioned, will respond to labor market opportunities, but those nutrition programs have tremendous long-term benefits for families and especially for kids who get them. And the same with rental assistance and housing subsidy. So, I’d ratchet up the parts that were working, and I’d push back hard on the parts that aren’t.

VALLAS: We’ve talked about a lot, but there’s, believe it or not, a lot more that we didn’t even get to that comes to us from this new census release. So, for folks who want to be gluttons for punishment and get even more of the wonkiness that you’ve just been hearing from Jared Bernstein, you can find it on his blog, JaredBernsteinBlog.com, where he has a piece called The 2018 Poverty Income and Health Coverage Results: A Tale of Three Forces. Of course, we’ve also got a link to that on our nerdy syllabus page. Jared, thank you so, so much for taking the time to help break through some of these numbers and connect it all to the policy that we know is really where we need to be focusing.

BERNSTEIN: Hey, this is my favorite places to come and hang out and talk about this stuff, so thank you.

VALLAS: Well, and it’s always a pleasure. Jared Bernstein is a senior fellow at the Center on Budget and Policy Priorities and a friend of the show and former chief economist for then-Vice President Biden. I’m sure we’ll have him back soon. And Jared, thanks again for taking the time.

BERNSTEIN: OK, my pleasure. Bye-bye.

VALLAS: Don’t go away more. Off-Kilter after the break. I’m Rebecca Vallas.

[hip hop music break]

You’re listening to Off-Kilter. I’m Rebecca Vallas. Stock markets tanked in mid-August after investors got spooked by economic indicators they view as early warning signs of the next economic recession. While recessions aren’t happy news for anyone to be sure, the next recession promises to be far more painful than it needs to be, particularly for folks who are already struggling to stay afloat, as Pat Garofalo writes for TalkPoverty. I sat down with him to learn more. Let’s take a listen.

Pat, thanks so much for taking time to come back on the show.

PAT GAROFALO: Hey, thanks so much for having me.

VALLAS: So, in the past few weeks, there has been lots and lots and lots of talk and scary talk at that about folks who do this for a living seeing early warning signs of an economic recession on the horizon. And first off, I think it’s probably helpful to talk about what these early warning signs are and what they mean. One buzzword that keeps coming up is particularly wonky, and that buzz word is “inverted yield curve.” I promised wonkiness. There it is. So, help us understand what is this inverted yield curve thing, and why is it freaking people out so much?

GAROFALO: So, the extremely short answer is that an inverted yield curve means that it is, the government, is paying more for short-term lending than long-term lending. So, let’s get into it what does that actually mean. The government, in order to raise money and to do all the stuff it has to do, sells Treasuries, T-Bills they’re often called, in different increments of time: 10 years, 20 years, 30 years. And if everything is going normal, the government has to pay more in interest on the longer-erm lending. So, it would be you have to pay out more on a 30-year bill than a 10-year bill because it’s harder to predict. As an investor, what’s going to happen in 30 years versus 10 years? What is the state of the U.S. going to be in three decades? We have no idea. Six months from now, that’s a little easier to decide. So, usually, the government has to pay more on those longer-term investments. When the yield curve inverts, that means for whatever reason, people are spooked and think something funny is going to happen in the short-term and therefore demand higher interest rates on short-term lending. So, they think something strange is going to happen in the next six months or two years or five years, whatever the case may be, so the government ends up having to pay more in interest on short-term lending.

And this is a fairly reliable indication that a recession is coming. It doesn’t mean, to be clear, that a recession is going to start next week or next month. It doesn’t mean, like it’s not predictive, but it does mean that the people who are staring at the numbers all day are seeing something strange in the short- to medium-term.

VALLAS: So, just I’m going to do a stab at translating that just a little bit. If I’m understanding you correctly, people are worried enough about the short-term future that they are taking on sort of shorter-term investments rather than kind of those long-term investments. And so, that’s shaping interest rates, and that’s what’s driving the change in that curve.

GAROFALO: Yeah, and it’s more that they’re demanding higher rates of interest on those shorter-term investments. So, usually, you say, eh, fairly confident that I’m going to get paid back in full in six months and everything’s going to be fine because there’s no weirdness out there in the world. And now folks are saying, eh, I’m actually not so sure about six months. So, maybe let’s demand 25 cents interest instead of 10. I’m pulling numbers out of thin air. But that sort of idea, like, eh, because I’m not feeling so great about the way things are going, I want to get paid more upfront.

VALLAS: And so, it really comes down to the perceived risk, right? That’s sort of what ends up translating into this interest rate.

GAROFALO: Exactly.

VALLAS: So, if I’m getting the research on this right and some of the trends, the yield curve has inverted before every single U.S. recession since 1955, so that’s part of why people view this as such a strong predictor and such a strong alarm bell that rings when they see this. There was actually a letter that I feel summed this up pretty well by two researchers at the Federal Reserve Bank of San Francisco where they put it as follows: “Forecasting future economic developments is a tricky business, but the yield curve has a strikingly accurate record for forecasting recessions. Periods with an inverted yield curve are reliably followed by economic slowdowns and almost always by a recession.” So, there it is sort of summing up what you said. Don’t take it from us. Take it from, I guess, the Federal Reserve Bank of San Francisco and some of their researchers taking a look at this.

So, if that’s why folks are starting to worry about the next recession, a big part of what you have started to argue — and you’re not alone. A lot of advocates for low-income individuals have been making this point as well as these alarm bells start to ring — but if the next economic recession is coming, we shouldn’t just be worried that we’re about to plunge into a recession at some point in the near future, maybe the next 18 months or so if those trends are any level of predictor from when we see that the yield curve invert. But you’re arguing that this recession isn’t just likely, isn’t just on the horizon, but it’s likely to be a lot more painful than it needs to be, particularly for folks already on the economic brink. So, help us understand what are the reasons underpinning that concern that you and other advocates for low-income individuals are starting to voice.

GAROFALO: Absolutely. So, I mean the starting point is that recessions happen, right? They just occur. There’s no way to keep an economic expansion going forever. And we’re currently in the midst of the longest economic expansion in American history. So, even if there was no inverted yield curve, a recession is going to come at some point eventually. So, in a perfect world during the time between recessions, you prepare for them by doing things like having states boost their reserves so they have money to hand out when the recession comes, by having the federal government build up the unemployment insurance system and the SNAP system, these things that we call automatic stabilizers, which are programs that when things go bad automatically pay out money to counteract that badness. That would be a perfect world. We are not in a perfect world. Instead, here during this economic expansion, the government has been gutting those programs, making them less effective, making it so that they’re going to reach fewer people, so when the inevitable recession occurs it’s going to be that much harder to get that money into the hands of people who need it.

VALLAS: Now, may be obvious to listeners that a big part of those automatic stabilizers that you’re describing in a main policy response that we see during recessions starts with unemployment insurance, which you mentioned. And I feel like that’s the place that we need to start. But unfortunately, it’s a program and it’s a set of policies that policymakers only ever seem to remember exist and only tend to do what they need to do around when we’re already in a recession. Because people remember, oh my god! We’ve got unemployed people! They need benefits. Let’s take a look at how we’re dealing on that front. You’re arguing that we’ve actually been heading in the wrong direction, both at the federal level and particularly at the state level when it comes to what our unemployment system and what those protections and that network of protections looks like. Which is part of why you’re really concerned about us not being prepared for this recession. What are the federal and state policy actions that we’ve seen in the recent several years that have started to weaken that system?

GAROFALO: Yeah, the attitude on this is completely backwards during good times or the perfect time to be fixing those system so that they reach more people. But everybody in mostly state legislatures, because it’s mostly states that handle administering this program, look at and say, hey, unemployment’s 3 percent. We don’t need UI anymore. And they slash it back, and they make it harder to qualify. And they cut the number of weeks that workers are eligible for, and then as you said, the recession comes and everybody panics. And then suddenly, they’re scrambling to try and fix these problems. So, nine states have cut their unemployment benefits, four of those with absolutely no mechanism for re-increasing them when the unemployment rate goes up. In Florida, they’ve cut it down to 12 weeks. Now, if you remember back to the Great Recession, some states and some places were up to 99 weeks of unemployment benefits. So, that’s a dramatic, dramatic, dramatic reduction.

VALLAS: Because people were facing really long-term unemployment.

GAROFALO: Absolutely

VALLAS: And 26 weeks, the basic amount, was not enough.

GAROFALO: Exactly. And so, this is concerning for two reasons. One, just on a face, like that’s absolutely not enough time. But when states expand and give additional weeks beyond the normal 26 during bad economic times, that tends to be subsidized by the federal government. Given the way everything happened in 2008, 2009, 2010, and ’11, I don’t have a ton of faith in the Senate to actually do that again. So, you’re going to be left with states having these bare-bone programs and not being interested in helping and expanding them. Or even if they are interested, not being able to because they’re not getting assistance from the federal government.

VALLAS: One of the statistics in your piece for TalkPoverty, which is called, The Next Recession Will Be Harder Than It Needs To Be: Here’s Why, really, I feel, bears calling out and also probably repeating a few times because it really puts a fine point on what you’re describing and the inadequacy of our current unemployment system. And that’s that today, basically one in four unemployed workers actually manage to receive unemployment insurance in their time of need. That might be shocking to people. It should be shocking to people hearing that, given that our unemployment insurance system is the program that exists to be there for people when they lose a job through no fault of their own. One in four doesn’t sound like a great statistic.

GAROFALO: No, it’s really bad. And that’s a combination of factors. Some of that is bad eligibility requirements, where people are ineligible for the program for bad reasons. And some of that is just simple access, where it’s just really hard to finish the paperwork or get Internet access in order to get at the programs to sign up. Or people who don’t have permanent addresses, so they can’t get checks mailed to them. There are tons of barriers to people accessing the program. And I think the main argument that, I mean lots of other folks are making is that we had the opportunity to fix those during the good times when it would have been easier and no one was panicking. And it would have been a great opportunity to say, hey, now that we can all breathe and people have jobs and aren’t getting laid off left and right, let’s work on those access issues. Instead the opposite happened.

VALLAS: So, basically, and I’ll pull out a quote from your piece just to sum this up, “The main bulwark against poverty when mass unemployment occurs has been whittled down from a standard that, even before the recent cuts, left America among the least generous countries in the world.” I guess to sum it up even shorter, we’re kind of screwed when the recession hits on the unemployment protections front unless states start to reverse these actions, or we start to see a change in course at the federal level. It doesn’t stop, though, at unemployment insurance.

GAROFALO: Yes.

VALLAS: This is one of those, “But wait, there’s more” moments. I feel like we have those often.

GAROFALO: It always gets bleaker.

VALLAS: It gets bleaker and bleaker the longer this conversation goes. And so, you actually point also to food assistance, another really important protection. When people lose a job, they have trouble putting food on the table. Many of these are folks who actually have trouble putting food on the table even when they do have a job because of low wages. Our largest food assistance program, the Supplemental Nutrition Assistance Program or SNAP, formerly called food stamps, was a huge, huge important responder during the Great Recession. But you have been pointing out some of the recent changes that Trump and others have been making to that program that are weakening it in really important ways.

GAROFALO: Yeah, and I mean anyone who’s listened to this show has heard you drum on these changes for a very long time. So, you’re more of the expert on this than I am. But there’ve been several real changes that have made it, like UI, harder to qualify, harder to get access to the program. And so, when the recession occurs and people realize that they need it and turn to the safety net, it’s not going to be there. They’re going to have a harder time getting enrolled, if they can enroll at all. And to your point, during the Great Recession, SNAP was huge. It expanded a lot exactly like it was supposed to. And then as people were able to get back to work and as the economy healed, the rolls got smaller and smaller. That’s exactly how a program like this is supposed to work.

VALLAS: And it was really only — just to jump in there — it was one of the only programs that functioned effectively in that way because it functions as a legal entitlement, which to dewonkify means if you’re eligible, if you meet the eligibility requirements for the program, you receive the benefits. Rather than programs like say, TANF — Temporary Assistance for Needy Families — which actually declined in a lot of states during the recession and wasn’t there for people in a way you would hope a program that’s supposed to provide income assistance to poor people and families with kids would because that program is a block grant. It’s not an entitlement. It’s not there for everyone who qualifies. It’s only there for a small share of people because the funding is so inadequate.

GAROFALO: Yeah. I can remember during the 2012 campaign, people were screaming, oh, food stamps have gone up by x million people under Obama! It’s like, yeah, exactly. They needed them. And that is literally what this program is supposed to do. And as the economy heals, that number will go down again, which is exactly what happened. And the concern with all the rules being pushed through by the Trump administration is that it is just that much harder to access this program for the first time when you’re trying to get into it when you need it.

VALLAS: And there’s one particular change that you point out, which is really important. We’ve talked about it a lot on the show but not necessarily recently because there’s been additional threats to SNAP that have come in its wake.

GAROFALO: Every day.

VALLAS: Yeah, pretty much every day it feels. And you actually point to one particular change that we have talked about at length on this show but not recently because there have been so many even more recent attacks on the SNAP program since then. But one particular change that’s going to have a lot to do with weakening SNAP in times of recession.

GAROFALO: Yes, this is particularly important during long, hard economic times is states are allowed to apply for waivers to extend their program to give more than the usual number of weeks. The Trump administration has made that harder. So, when state lawmakers look and say, hey, actually, the duration of unemployment in our state and in these particular counties is 40 weeks, 50 weeks, 60 weeks, people are looking for a job for a year and a half. Hey, can we get them extra UI because it’s really bad out there? It’s going to be harder for them to do that when they go in and say, hey, federal government, can we can we do this thing? The federal government’s going to say no.

VALLAS: And the same is true when it comes to Medicaid given similar policies this administration has pushed in the states when it comes to Medicaid, basically conditioning all these kinds of assistance on people being able to work a certain number of hours per week. But if they can’t find those jobs, basically, what you’re saying is these programs are no longer going to be there for people in their time of need.

GAROFALO: Exactly. Yeah. By making programs contingent on work during a recession, you’re just getting it all wrong. That’s completely backward. [laughs]

VALLAS: You also point out — and this is not coming necessarily from the Trump administration, but a trend that we’ve seen in states that it doesn’t get a lot of attention until we’re in times of recession kind of like UI — and that’s that most states have balanced budget requirements. How is that going to play out during a recession?

GAROFALO: This is actually huge and a major problem. You know, the idea is during a recession, during bad economic times, the government steps in to fill the spending gap that individuals can’t. So, when things go south, the government comes in and spends money, and gives it out to folks or gives it out to businesses, whatever to keep the economic wheels rolling. But states can’t do that. They can’t have a deficit like the federal government does. So, what they tend to do if they’re doing things right is that during good economic times, they build up reserves which they can then spend without violating their balanced budget requirements. Not all states do that. And some that are particularly vulnerable to bad economic times that don’t have economies like a New York or an Illinois or California where they have big cities and are really robust, have not only not been building up their reserves, they’ve been using their reserve money to cut taxes for rich people during the good economic times. Some of this is just the way that lawmakers think. They see things are good and that there’s no short-term problem. And they say, yay! It’s time for tax cuts and to do all the things I wanted to do instead of preparing for the inevitable. But it’s going to be a problem.

VALLAS: And just to close on the bleakest note of all, as you sort of intimated before, what we saw during the Great Recession was the federal government step in to fill the void when states did not have their policy acts together on these fronts. That was a big part of why we actually saw a significant and successful response to the recession in the form of economic stimulus and more. But you’re worried, as are many others, that that might not be something we would see happen in the way that it would need to, given the current political climate.

GAROFALO: I mean every step of the way during the recession, Mitch McConnell was uninterested in doing the things that he needed to do: uninterested in giving states support, uninterested in doing unemployment benefit expansions. So, I don’t have a ton of faith that he is the guy, if something goes wrong, to be heading up the effort.

VALLAS: So, we don’t know exactly that the recession is coming tomorrow or next week or six months from now or when, but if I’m hearing you right, it’s coming. And we’re starting to get worried that it could be coming somewhat soon, and we’re frankly not prepared. And it’s low-income people who are going to end up bearing the brunt.

GAROFALO: Exactly. Not just unprepared, actively undoing the things you would do to prepare.

VALLAS: In the last minute or so that I have with you, what is the policy agenda that you wish we were pursuing at this point to be prepared? And I realize that’s a big question.

GAROFALO: How much longer do we have?

VALLAS: [laughs] Unfortunately, just 60 seconds.

GAROFALO: Excellent! In addition to having states reform unemployment insurance to make it easier to access and not harder and to not set up barriers to people and to not set up barriers for themselves that they have to do this song and dance in order to extend the program, just having the federal government get onboard and say, hey, when things go wrong, let us tell you now we’re going to step in. We’re going to give you funds so you don’t have to lay off teachers. We’re going to expand unemployment insurance. We’re going to expand access to SNAP. Giving that signal to states today would be really important. And we’re doing the opposite.

VALLAS: I’ve been speaking with Pat Garofalo who is a terrifying individual, unfortunately, with the things he’s been sharing with us today!

GAROFALO: I’m going to put that on my business card.

VALLAS: Yeah, you could substitute managing editor of TalkPoverty for —

GAROFALO: For terrifying individual.

VALLAS: — terrifying individual when it comes to recessions. But really appreciate you helping connect some of these dots, given how important being prepared for the next recession, the imminent as it may be, will be for the families in this country who are already struggling the most.

And that does it for this week’s episode of Off-Kilter, powered by the Center for American Progress Action Fund. I’m your host Rebecca Vallas. The show is produced by Will Urquhart and David Ballard. Find us on Facebook and Twitter @offkiltershow, and you can find us on the airwaves on the Progressive Voices Network and the We Act Radio Network or anytime as a podcast on iTunes. See you next week.

♪ I want freedom (freedom)

Freedom (freedom)

Now, I don’t know where it’s at

But it’s calling me back

I feel my spirit is revealing,

And now we just trynta get freedom (freedom)

What we talkin’ bout…. ♪