States beef up fight against poverty

In a rare burst of positive news for America's hard-put poor families, 15 states have set up bipartisan commissions to see how to narrow the yawning income gaps that leave so many Americans in destitution.

The advent of the commissions and serious studies in states from Maine to Washington is good news. It's true, legislatures have struggled with welfare and Medicaid issues for years. But not gladly.

The nationwide poverty rate has stalled around 11 percent or 12 percent for years – for a family of four with income under the federally set line, now $21,200 a year. (Try living on that – a reasonable minimum for food, shelter and clothing would be closer to $30,000.)

The damage to children

Poverty places a huge drag on the economic output of states and communities. Poor health, substandard housing, mental stress, employment crises, teenage pregnancy, low literacy and the added likelihood of arrest and imprisonment are part of a misery package that hits poor populations far more heavily than the rest of us.

The results for children are alarming. A recent study shows that those who spend their first five years in poverty will face daunting odds – first lagging school performance and then, as adults, less income, poorer health and higher psychological stress. Girls growing up poor are five times more likely to be a teen parent; boys are more than twice as likely, after reaching adulthood, to be arrested.

Small wonder that by some estimates, childhood poverty is draining a massive $500 billion a year out of the U.S. economy. State and local governments can hardly not care: They're then saddled with vastly increased welfare, health, social services, criminal justice costs – plus incredible amounts of lost income.

What should the 15 state commissions (and the other 35) recommend?

First, get more money into the pockets of the poor. Even with full-time minimum wage employment, many of our poor subsist on the edge. .

Tax relief for the poor is crucial. Nearly half the 42 states that levy income taxes have thresholds set below the federal poverty level. Sales taxes take a much bigger and more painful bite out of poor people's budgets.

Instead, states should supplement the federal earned-income tax credit for low-income working families with a parallel state credit, as 22 states do.

Next, curb the exploitive debt cycle for poor families by cracking down on such abusive practices as payday lending, predatory mortgages and excessive fees for cashing paychecks. North Carolina and Illinois are among the few states so far willing to buck the loan-sharking lobbies to enact reforms. Banks can help by providing outlets that offer check-cashing, money orders and savings accounts.

Rethink incarceration

There's no shortage of other steps the new state commissions on poverty reduction can recommend, but a critical measure is missing from most of the agendas – reforming the state criminal justice policies that have turned the United States into the world's biggest incarcerator.

A child's life can be torn apart by a parent – especially a mother – going to prison. Some children even land in foster care, making parental incarceration, some reformers assert, a “death sentence” for families.

But even as 400,000 parents a year get released from prison or jail sentences, laws and customs make it hard for them to re-create normal family life. The consequences of having a criminal record can be devastating and continue for years, with children among the most-wounded victims. The state commissions should put incarceration high on their agendas.