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One Big Thing: The most important actions in 2025 affecting poverty across the spectrum—from the poor to the middle class—came from the unprecedented policy choices of the federal government.

It started with the firing of 220,000 federal workers and additional drastic cuts to federal agencies, continued with on-again, off-again tariffs, followed by slashing of all programs that help the poor, like Medicaid, food stamps and home heating and cooling assistance, elimination of the Affordable Care Act subsidies followed by rising costs, overall. 2025 was not a good year for Americans living in poverty, paycheck-to-paycheck or simply trying to make ends meet, and certainly not a banner year for the country’s economy, with an increasing unemployment rate and rising inflation.

I and many others who write about poverty are emphatic that it is our government’s policy choices that perpetuate the cycle of poverty, rather than the individual choices of the poor themselves. One important example is the decision to let the temporary expansion of the child tax credit expire at the end of 2021. The expansion considerably increased the amount of the child tax credit and extended the full amount to the lowest income families, who previously did not qualify — a low income tax payer couldn’t receive the full tax credit because…they didn’t make enough money to deduct the full credit!

This temporary child tax credit expansion decreased the childhood poverty rate by nearly half—to 5.2% in 2021. According to a report published by the Annie E. Casey Foundation in October 2025, based on the most recent data available from 2024, the childhood poverty rate is currently 13% — today, approximately 10 million children in the United States live in poverty.

Here’s what the Foundation also said about the impact of public policy choices on the poor and childhood poverty in particular:

This report, which ana­lyzes U.S. Cen­sus Bureau fig­ures from the annu­al Sup­ple­men­tal Pover­ty Mea­sure (SPM), reveals that more than 1 in 8 chil­dren in this coun­try lived in pover­ty in 2024. With­out the sup­port of gov­ern­ment pro­grams and poli­cies, the child pover­ty rate would near­ly dou­ble — under­scor­ing how vital these efforts are to help­ing fam­i­lies make ends meet. Among chil­dren liv­ing in pover­ty, 61%, or 5.9 mil­lion, lived with at least one employed par­ent in 2024.

For those organizations that helped the poor, 2025 was a year of chaos, according to an end-of-year report from NPR. Tariffs, swiftly changing government policies, like letters cutting funding and then restoring it (including aid to food pantries), the longest government shutdown in history and suspension of SNAP (food stamp) benefits made it nearly impossible to provide consistent help to poor individuals and their broader communities.

Take this head-spinning example from just the last few days. On Tuesday January 13, the Trump Administration sent hundreds of letters to grant recipients cancelling nearly $2 billion in funding for mental health and addiction treatment across the United States. After public outcry and meetings with elected officials, the administration restored the funding one day later, according to NPR reporting:

A Trump administration official has confirmed to NPR that sweeping cuts to mental health and addiction programs worth more than $2 billion are being reversed…Public health advocates said their organizations were breathing a sigh of relief but were also alarmed and shaken.

“It was a day of panic across the country. People are deeply alarmed but hopeful that this money is being restored,” said Hannah Wesolowski with the National Alliance on Mental Illness…Public health officials around the U.S. described the last 48 hours as chaotic.

And living the American Dream? A 2025 report from Investopedia says you might as well fuhgeddaboudit, cause it now costs $5 million over a lifetime for a family of four, if you dare to own a home, a new car, send your two kids to college… and actually retire. Read the details here.

Why It Matters:

This is a moral issue. There is no doubt that the government’s policy choices, like the passage of the “One Big Beautiful Bill Act”, which dramatically cut government aid to the poor and eliminated health care subsidies, will increase poverty in the United States. Add to those cuts the near stagnant wage growth, the slowing job market reported in 2025 and continuing into this year, and it looks like the poor and even the middle class will lose ground in 2026. If we know that a simple tax credit (regardless of cost) will reduce the number of our nation’s children living in poverty by millions, and we purposefully choose against it, and at the same time choose to slash other help for the poor, including ripping away health insurance for millions of working families…what do those choices say about the people we elect?

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What say you about last year’s policy choices impacting poverty in the United States? The constant chaos? What are our options going forward? I’d love to hear your thoughts in the Comment Section below—thanks!

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