Each September, the United States Census Bureau publishes a “Poverty in the United States” report on the current status of poverty across the country. In the report, the Census Bureau reports both the Official and Supplemental Poverty Measures across all fifty states.
We’ve written about the difference between the official poverty measure and the supplemental poverty measure many times in the past at Scioto Analysis. The Official Poverty Measure estimates poverty rates using pre-tax income and family composition. The Official Poverty Measure can be somewhat limited in its scope since it doesn’t make any adjustments to income other than for inflation, though it does provide a consistent definition of poverty over time.
The Supplemental Poverty Measure expands the definition of poverty to include noncash benefits, account for taxes and necessary expenses, and consider geographic cost-of-living differences. The Supplemental Poverty Measure presents a more comprehensive view of poverty and economic well-being across the country than the official poverty measure by adjusting for fiscal and geographic impacts on household resources and needs. Because it accounts for pre-tax income and noncash benefits, the Supplemental Poverty Measure is also useful for evaluating the effectiveness of anti-poverty programs in the United States.
The Census Bureau’s poverty report makes evaluating the effects of anti-poverty programs straightforward. Each year, they report on the change in the number of people in poverty after including each anti-poverty program in the Supplemental Poverty Measure’s calculation. In 2024, these programs resulted in at least 29 million people lifted out of poverty, 8-9% of the total U.S. population.
I decided to look into which anti-programs are the most effective tools at reducing poverty across the country. According to the Census Bureau, the top five most effective programs in reducing poverty in 2024 were Social Security, refundable tax credits, SNAP, Supplemental Security Income, and housing subsidies.
Social Security lifts 29 million Americans out of poverty
According to the Census Bureau, Social Security was responsible for lifting 28.7 million people out of poverty in 2024. This makes Social Security by far the most impactful anti-poverty program in the country by sheer magnitude. The most significant proportion of Social Security recipients are retirees– about 20.1 out of the 28.7 million people who were moved out of supplemental poverty are aged 65 years or older.
In 2024, the U.S. federal government spent about $1.5 trillion on Social Security, accounting for 15.9% of total federal spending. Despite the success of Social Security in providing supplemental income to retirees and disabled persons and reducing poverty, the program continues to grow more expensive each year.
The Social Security Administration projects that by 2035, federal taxes will only be able to fund about 75% of the cost of Social Security. Given how many people the program affects, it’s no surprise that worries about the long-term feasibility of Social Security have grown more serious over the past several years.
Refundable tax credits lift 6.8 million Americans out of poverty
In 2024, the Census Bureau reports that refundable tax credits lifted about 6.8 million people out of poverty in the United States. Refundable tax credits include the Earned Income Tax Credit and the refundable portion of the Child Tax Credit.
In a blog post I wrote earlier this year, I discussed the difference between grants and tax breaks in fighting poverty. I found that tax breaks are often much more efficient than grant-based anti-poverty programs. The administrative burden for tax-based anti-poverty programs is lower than other anti-poverty programs, as administering funds through the tax code is less costly than funding state and local welfare programs through grants.
Another reason refundable tax credits are so good at moving people out of poverty is that they allow households to spend money how they see fit instead of requiring the government to understand the individual needs of different households to achieve economic security. This is a similarity that refundable tax credits have to Social Security: these programs provide direct cash assistance to households, which allows them to use the money as they see fit.
SNAP lifts 3.6 million Americans out of poverty
The third most effective anti-poverty program according to the Census Bureau is SNAP. If you don’t know, SNAP stands for the Supplemental Nutrition Assistance Program, and it provides monthly funds for low-income households to purchase food. In 2024, SNAP was responsible for lifting about 3.6 million people out of poverty.
SNAP is different from Social Security or refundable tax credits because it provides in-kind benefits, which are non-cash benefits that are provided to meet specific needs (in this case, food). However, in many ways, SNAP functions similarly to cash-based anti-poverty programs by freeing up a significant portion of monthly income for other household expenses.
According to the ALICE survival budget for Ohio, the state where I live, a single adult’s monthly survival cost for food is $443, nearly 20% of their total monthly budget. The average SNAP benefit for a family in 2023 was about $332, relieving a significant portion of food spending for other household expenses.
Supplemental Security Income lifts 2.5 million Americans out of poverty
According to the Census Bureau, Supplemental Security Income is responsible for lifting about 2.5 million people out of poverty in 2024. Supplemental Security Income provides monthly cash payments to low-income older adults and people with disabilities.
Despite the program’s effectiveness in reducing poverty, The Brookings Institution estimates that just 50% of people who are eligible for Supplemental Security Income receive benefits. This may be partially due to the program’s complicated application and approval process. In particular, Supplemental Security Income has extremely strict limitations on assets. To qualify for Supplemental Security Income, countable resources may not exceed $2,000 for an individual or $3,000 for a couple, a metric that has not been updated since 1989.
Housing subsidies lift 2.1 million Americans out of poverty
According to the Census Bureau, housing subsidies are the fifth most effective anti-poverty program in the United States, lifting about 2.5 million people out of poverty in 2024. Housing subsidies in the United States generally fall into three main categories: rental housing assistance, assistance to state and local governments, and assistance for homeowners. To reduce poverty, the main goal of housing subsidies is to make housing affordable for low-income households. Two of the major forms of housing subsidies for low-income households are section 8 vouchers and public housing.
Section 8 vouchers are rental subsidies which allow renters to pay a lower, more affordable monthly rent payment to private landlords. Renters typically pay about 30% of their gross monthly income on rent, and the government pays the difference between the amount charged by the landlord and the amount paid by the renter. Public housing refers to subsidized residential properties that are owned by the government to provide more affordable places for low-income households to live.
Housing subsidies can be a great way to reduce poverty since they focus on the most significant portion of most households’ monthly budgets. However, the shortage of affordable housing continues to grow across the country, and most housing subsidies are associated with long waiting lists and stigma.
