Child poverty across the United States has spiked sharply since the pandemic, rising from 5 percent in 2021 to 13 percent, according to data analyzed by the Annie E. Casey Foundation. Over 9 million children now live in poverty. Advocates tied the reversal to the expiration of federal aid programs, rising living costs, and stagnant wages.
In New Mexico, officials say a different story is unraveling. The state reduced child poverty by 19 percentage points between 2022 and 2024 with its expanded tax credits, rebates, and anti-poverty investments.
State officials frame the decline as not an anomaly. Rather, it is evidence that aggressive public intervention can soften economic hardship even as federal support ended.
“As child poverty surged across the U.S., New Mexico went the other direction,” Gov. Michelle Lujan Grisham said in a statement. She cited the policies the state pursued after the federal Child Tax Credit expired.
The difference has captured attention at a moment when many child welfare advocates warn that recent and anticipated cuts to safety net programs could deepen hardship for families already struggling.
President Donald Trump’s policies have significantly gutted funding for Medicaid, the Children’s Health Insurance Program (CHIP), and the Supplemental Nutrition Assistance Program (SNAP), with billions in reductions projected over the next decade.
“We know what the causes were,” Leslie Boissiere, vice president of external affairs at the Annie E. Casey Foundation, said in an interview cited in the report. Supports during the pandemic expired, she said, while high costs and meager wages weighed heavily on households.
For young children, the stakes are particularly enormous. “Children 0 to 3 years old have the highest poverty rate of any age group,” said Bruce Lesley, president of First Focus Children.
The consequences, according to researchers, extend beyond household budgets. Poverty in early childhood has been tied to barriers in cognitive development, academic performance, and long-term health outcomes. “In this period when a young child’s brain is in rapid development, poverty is an impediment to that development,” Boissiere said.
Those concerns have fueled fresh debate over whether states can fill the void left by federal retrenchment. And New Mexico has become a test case.
Lujan Grisham credits a mix of direct relief and structural supports, including tax policies that alleviate the needs of low-income households. The approach reflects a wider view, increasingly adopted by some states, that child poverty can be reduced through public investment rather than treated as an intractable condition.
Between 2022 and 2024, federal and state policies chipped at child poverty by at least 10 percentage points in 34 states, and D.C., and New Mexico had the largest in the nation with a 19-point reduction.
The argument has gained traction beyond New Mexico.
In Maryland, Gov. Wes Moore has championed the ENOUGH Initiative. The program is a community-based anti-poverty strategy with millions in grants to high-poverty neighborhoods. Moore described the federal budget cuts as “the single largest rollback of poverty-fighting programs in modern history.” He argued that states must step in where Washington has retreated.
Still, advocates caution that state action and giving can only go so far. Private philanthropy, no matter how large, cannot replace federal anti-poverty programs, they say. Foundations have stepped in with increased support for child-focused programs. But many warn that the scale of federal cuts could overwhelm local gains.
That unease tempers the optimism around New Mexico’s results. Supporters say the state’s progress is proof that policy matters in moving poverty rates. The Annie E. Casey Foundation, however, noted that sustaining those gains may become harder if broader federal support continues to shrink.
For now, though, New Mexico has positioned itself as a counternarrative to a troubling national story. “When the federal government pulled back,” Lujan Grisham said, “New Mexico held the line for its kids.”
Millions more children have slipped into poverty. But New Mexico’s argument carries both political weight and a challenge: Is New Mexico’s outcome a blueprint for others?