For those who analyze, research or make anti-poverty policy—or more importantly, those who are living with the real-life implications of a lack of material resources—2025 has been yet another tumultuous year.
As we approach 2026, Spotlight once again highlights the most important and impactful stories of the year in the poverty and opportunity space.
Safety Net Impact of the “Big Beautiful Bill”: The so-called “Big Beautiful Bill,” the tax and spending framework passed by the Republican Congress and signed by President Trump in July, makes significant changes to Medicaid and SNAP as well as other safety net programs.
On SNAP, the budget bill will reduce funding by approximately 20%—an $186 billion cut that marks the largest reduction in the history of the program. The bill also imposes stricter work requirements on SNAP participants. For the first time, adults between the ages of 55 and 64, as well as adults with children over the age of 14, are subject to these rules. They must work a minimum of 20 hours a week or only get benefits for a maximum of three months over three years. Preciously, such requirements applied only to able-bodied adults without dependents aged 18 to 54.
The budget bill also shifts some SNAP costs from the federal government to the states. States are required to cover a higher share of administrative costs beginning in fiscal year 2027—rising from 50% to 75%—and, for the very first time—must also pay a percentage of benefit costs based on their SNAP payment error rate beginning in fiscal year 2028.
On Medicaid, the budget bill mandates changes that the Urban Institute has estimated equate into an approximately $1 trillion cut to the program. Among those changes:
- Increasing application and other paperwork requirements could make it difficult for young adults to apply for and maintain Medicaid coverage.
- Conditioning Medicaid expansion coverage on whether beneficiaries work, volunteer, or participate in work-related activities for 80 hours per month or are enrolled in school at least half time, unless they qualify for and receive an exemption based on characteristics such as pregnancy, medical frailty, caring for a disabled family member, or being a parent of a child under 14.
Finally, the new law increases the federal Child Tax Credit from $2,000 to $2,200 per child; however, the increase remains only partially refundable and thus will not be available to many low-income working families. In addition, though many questions remain about how the policy would actually work, the tax and spending framework created a new type of child savings, “Trump Accounts,” and a temporary program of $1,000 payments for each child born in Trump’s presidential term.
The Latest U.S. Poverty Statistics: The main measure of U.S. poverty did not change significantly in 2024, and household income also remained about level except for gains among the wealthiest Americans, according to the annual poverty numbers released in September.
Overall, many aspects of the annual Census Bureau data on poverty, income, and insurance for the final year of former President Joe Biden’s administration were not significantly changed from the previous year.
- The supplemental poverty measure, which is considered the main gauge of poverty as it is adjusted for government support such as food assistance and tax credits, as well as household expenses, was 12.9% in 2024, similar to the previous year, the Census Bureau said.
- The official poverty rate fell slightly to 10.6% from 11.1% in 2023.
- Real median household income was $83,730 in 2024, not significantly different from 2023, bureau officials said.
- Median income increased by 5.1% for Asian households and 5.5% for Hispanic households, while it declined by 3.3% for Black households in 2024. It did not change significantly for white households.
“We’re seeing that household income and earnings kept pace with inflation,” Liana Fox, bureau assistant division chief for social, economic and housing statistics, told reporters.
“It’s a story of stability, but not necessarily growth – except at the top end of the income distribution,” she said.
The Government Shutdown: This year’s 43-day government shutdown caused massive disruptions, chaos and partial payments for SNAP benefits, with some states scrambling to cover gaps, leading to reduced benefits or delays for families.
- Benefits were delayed or reduced in many states due to federal funding uncertainty, with some states issuing partial payments or using state funds to bridge the gap.
- Court Rulings: Lawsuits forced the government to partially fund the program, even as the Trump administration tried to reduce payments, leading to confusion and partial benefits (around 65% of normal).
- Ongoing Instability: Even after the shutdown ended, concerns remained, with the USDA demanding extensive state data, threatening administrative funding, and potentially future payments if states don’t comply, creating a tense environment.
The looming problem of housing: In conversations and interviews with poverty policy makers, government leaders and service providers on the ground during 2025, when you ask what the number one problem is that they face, the answer is almost invariably the lack of affordable housing.
A majority of U.S. mayors believe housing affordability in their cities will worsen over the next year according to a survey of bipartisan mayors conducted by the U.S. Conference of Mayors (USCM) in partnership with the Bipartisan Policy Center and the Capital One Insights Center and released this summer.
The most common challenges mayors cite are the direct costs of housing development—materials, labor, and land—along with the ability to secure private or federal funding.
“Republican and Democratic mayors alike—from rural communities to major metropolitan areas—are advancing practical solutions to improve housing affordability,” said Dennis Shea, executive vice president for housing at the Bipartisan Policy Center. “This survey highlights the bipartisan momentum at the local level and the opportunity for government at all levels as well as the private sector to build on that progress together. With the ideas and leadership of the mayors, we’re optimistic about creating more affordable housing options and expanding opportunity for families across the country.”
Also adding concern to policymakers: the Trump administration’s new approach to low-income housing and homelessness policy.
Earlier this month, The Department of Housing and Urban Development temporarily revoked a controversial policy change that would significantly cut permanent housing funding for people experiencing homelessness.
HUD withdrew the notice of funding opportunity about 90 minutes before a Monday afternoon court hearing regarding two lawsuits challenging the agency’s recent changes to the Continuum of Care program — one from a coalition of 21 attorneys generals and governors and another from a group of 11 local governments and non-profit organizations.
The growing debate over direct cash payments: A July article by veteran New York Times poverty reporter Jason DeParle plunged the poverty policy community into an intense discussion about the impact of direct cash payments—an increasingly popular policy tool at the state and local level.
DeParle reported that results from the Baby’s First Years program “found that years of monthly payments did nothing to boost children’s well-being, a result that defied researchers’ predictions and could weaken the case for income guarantees.”
In Baby’s First Years, 1,000 eligible mothers were recruited in hospitals at the time of their child’s birth across four sites — New York City, greater New Orleans, the Twin Cities, and the Omaha metropolitan area. Mothers received a monthly unconditional cash gift of either $333/month or $20/month for a total of 76 months. The cash gifts started at their child’s birth and ended three months after their child’s 6th birthday. Recruitment of study participants began in May 2018 and ended in June 2019. Quantitative data is being collected just after birth and when the child reaches 12, 24, 36, and 48 months of age.
Some direct cash payment supporters, as well as some of the members of the Baby’s First Years team, argued that the results were skewed because the COVID-19 pandemic emerged during the period of the study.
“Baby’s First Years never could have predicted this completely historic, unique context that most of their treatment period came during, meaning the pandemic,” Luke Shaefer, the Hermann and Amalie Kohn Professor of Social Justice and Social Policy and Professor of Public Policy at the Gerald R. Ford School of Public Policy at the University of Michigan, told Spotlight recently. “The first thing that’s historic is that we did more with cash transfers than ever before, and in a very dramatic way. Their control group got significant sums of unconditional cash transfers through the economic impact payments, the expanded Child Tax Credit and expanded unemployment insurance.
“And so, the treatment is not what they intended at the beginning. They selected a very modest amount to begin with, but then you add the fact that we have all these cash transfers. And then the second thing is just to build the experiment during a time when, for child development, everything goes haywire.”
The debate, however, continues unabated. Jim Sullivan, Professor of Economics at Notre Dame University and the co-founder and Director of the Wilson Sheehan Lab for Economic Opportunities, told Spotlight recently that: “Those results and those from several other randomized trials have really kind of painted a picture of the limitations of the impacts of these projects. And absolutely every policy conversation that I’m in now that involves re-allocating cash references them.”
