On Monday, at an event marking the release of the Half in Ten campaign’s new report—“The Right Choices to Cut Poverty and Restore Shared Prosperity”—Angela Sutton, a Witness to Hunger in Philadelphia, talked about why it’s so critical to protect investments in low-income families during the upcoming deficit debate.

Sutton was shot at age 14, raped twice (including by her father), didn’t graduate high school and was homeless at 16.

“For two years, I slept in an abandoned car, slept in the snow, ate out of trashcans,” she said. “I was supposed to be a statistic, left for dead.”

Sutton said a Section 8 voucher and food stamps helped her find stability. She graduated from Drexel University with an associate’s degree and is now working towards her bachelor’s.

“We need to keep fighting for people that want the American Dream,” she said. “We don’t want a handout, we want to be able to help each other.”

Half in Ten’s second annual report tracks economic and social indicators of progress between 2010 and 2011 towards the campaign’s overall goal of cutting poverty by half within ten years. It flies in the face of the myth that “we don’t know what to do about poverty.”

“The big takeaway from the report is that we can cut poverty and also cut our long-term deficit—it’s all about the choices that we make,” Melissa Boteach, director of Half in Ten, told me.

One of the report’s most striking findings is that although the poverty rate didn’t change in 2011—thanks in large part to antipoverty programs that too many in Congress would like to slash—income inequality continued to grow. The top 20 percent of Americans took home more than half of all income in the US (51 percent), while the bottom 40 percent earned just over 11 percent. The wealthiest 5 percent enjoyed over one-fifth of the nation’s income.

The report attributes widening inequality to the proliferation of low-wage jobs—particularly in the service sector—and a stagnant minimum wage that isn’t indexed to inflation. A federal minimum wage job historically could lift a family of three above the poverty line, about $17,900 today. But it’s been raised only three times in the past thirty years and stands at 7.25 an hour (and just $2.13 for tipped workers), so a full-time worker earning the minimum wage is paid only $15,080.

“This is the context in which Congress and the President are debating deficit reduction,” said Boteach. “Will they do it in a way that exacerbates poverty and inequality? Or make the investments we need to make in order to support working families and grow our economy?”

The report points to some of the policies that are working: The earned income and child tax credits supplement the earnings of low-wage workers and kept 8.7 million people out of poverty in 2011; unemployment insurance lifted 2.3 million people above the poverty line, and would have been more effective if the additional $25 per week in benefits under the Recovery Act had been extended; SNAP (food stamps) lifted nearly 4 million people above the poverty line. On the flip side, in 201l twenty-seven states regressed in providing childcare assistance, and census data indicates that 5 million people were pushed into poverty by work-related expenses, including childcare.

The report notes that all of these antipoverty measures will be at risk during the deficit negotiations. Federal unemployment insurance is set to expire for everyone at the end of December, immediately affecting 2 million Americans; conservatives who protect tax cuts for the wealthiest 2 percent would also roll back the reach and effectiveness of the antipoverty earned income and child tax credits; SNAP cuts were passed by both the Senate and House Agriculture committees and are also at risk in the deficit debate.

Ultimately, the report makes clear that investments in things like education and workforce training, nutrition assistance, health care, and affordable housing create pathways to the middle-class in an economy where too many jobs just won’t get a person there. These investments also make long-term fiscal sense. Child poverty, for example, costs our economy more than $500 billion annually in increased health care costs, worse educational outcomes, lower worker productivity, and increased criminal justice expenditures. A very modest investment in low-income families is associated with significantly higher earnings and work hours per year when children in those families reach adulthood. (The people seem ahead of the politicians on this front: an election eve poll by the First Focus Campaign for Children shows that 82 percent of voters—including 76 percent of Republicans—want Congress and the White House to deliver a plan to cut child poverty in half within ten years.)

The Half in Ten coalition—comprised of 200 national and local organizations across the country—will use this report to inform their actions during the upcoming deficit debate. You can get involved here.

“This report shows that we know what we need to do,” said Boteach. “It’s time for people to take a stand.”

As Congress considers a “Grand Bargain” budget deal, these vital social services are at risk. Check out Laura Flanders on why such austerity cuts aren’t only poor policy—they’re a violation of human rights.