Noting that young children in poverty face a greater likelihood of impaired development because of their increased exposure to a number of risk factors associated with poverty, this report presents statistical information on the incidence of poverty during early childhood. The report notes that the poverty rate for U.S. children under age 3 remains high (18 percent) despite its decline since 1993 from 27 percent, with very young children more likely to be poor than any other age group. Young children who live with single mothers are far more likely to be poor than those who live with married parents. The poverty rate for Black and Hispanic children under age three is three times higher than that for White children. Hispanic young children living in a two-parent family are three times as likely to be poor as Black children and the gap is increasing. For the majority of poor children under age three, having parents who are employed does not prevent them from living in poverty. It is argued that the welfare reform of the 1990s has removed much of the safety net of public assistance for poor children and that the increasing unemployment in the current recession poses new challenges for them. The report maintains that postponing a debate about how to reduce young child poverty will increase the ultimate costs of corrective actions. The report concludes by asserting that it is possible to develop and implement strategies to reduce young child poverty that would still be consistent with American values. (KB)