In an op-ed for The Washington Post, Robert Rubin, former Secretary of the Treasury and chairman of LISC for 18 years, warns against the dire pitfalls of cutting anti-poverty programs. Government initiatives that help low-income people are not just social imperatives for the richest country on earth, but also work as “automatic stabilizers” for the economy and keep commerce strong.
The excerpt below was originally published on The Washington Post:
Why hurting the poor will hurt the economy
by Robert Rubin
Not long after I became treasury secretary in 1995, a senior U.S. senator summoned me to Capitol Hill for a meeting. He demanded to know why our department had just opened a community development office, tasked with focusing on poverty, inner-cities and distressed rural areas.
“Treasury’s purview is economic policy,” the senator said. “What exactly do poverty and social issues have to do with your job?”
The answer to that question has never been more important than it is today: Anti-poverty programs such as Medicaid, the Supplemental Nutrition Assistance Program (SNAP, often called food stamps) and other safety-net programs designed to assist low-income Americans are not only social and moral imperatives — they serve critically important economic purposes.
To start, these are vital public investments with high rates of return. They improve productivity and reduce social costs caused by crime, malnutrition and poor health. For adults, Medicaid and SNAP better enable effective participation in the workforce.
Roughly 20 percent of U.S. children live in poverty. In the wealthiest country in the world, that’s not just a moral outrage — it’s a serious detriment to our economic future. For low-income children, Medicaid and SNAP are investments that significantly improve outcomes later in life. For example, one study found that children who received SNAP were less likely to experience stunted growth, heart disease and obesity as adults — and had graduation ratesthat were 18 percentage points higher. We need to do more, not less, to help these children — by providing early family intervention, better schools and housing, safer neighborhoods and much else.