Poverty in America is coming under scrutiny – and it could become tougher to qualify as truly poor. That’s because the Trump administration is studying a change in calculating the official measure of poverty, which would rely on a less generous method of adjusting for inflation.
It’s a technical change, but it could have a very real effect, according to Indivar Dutta-Gupta, the co-executive director at the Georgetown University’s Center on Poverty and Inequality, a nonpartisan policy research center. Under the proposal, the poverty line would rise by 0.2% less each year than under the current method of assessing poverty, his group estimates.
The difference may appear small, but it would translate into 1.6 million fewer people qualifying as poor within a decade, the Georgetown Center on Poverty and Inequality said. Without that designation, those low-income households could lose access to benefits such as Medicaid, food stamps and dozens of other federal aid programs that rely on the official poverty measure to decide who should receive help.
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At the same time, the Trump administration is rewriting rules for social safety net programs such as food stamps that makes it harder to qualify for aid. In his State of the Union address earlier this month, President Donald Trump praised his administration for an economy that’s helped “7 million Americans … come off food stamps.” But anti-poverty experts say rewriting the rules won’t change the hardship many Americans continue to experience – and could instead make life tougher.
The proposal would “reduce the urgency of reducing poverty” because fewer Americans would appear to be poor, even those with very low incomes, Dutta-Gupta tells USA TODAY. “The harm is real. The difference between getting Medicaid coverage or not can be life-changing.”
It’s unclear whether the measure will be adopted, and if it is, when it would become effective. The White House’s Office of Management and Budget, which did not return a request for comment, said in a recent interim report that its experts are currently finishing their analysis of the chained Consumer Price Index, which grows more slowly than the currently used Consumer Price Index for setting the official poverty measure.
At the same time, anti-poverty advocates and lawmakers such as U.S. Rep. Alexandria Ocasio-Cortez, D-New York, agree that the poverty measure needs to be reassessed – to make it more generous. The official poverty measure was created in the 1960s, they point out, before the advent of the internet, mobile phone bills and surging costs for health care, housing and education. It also assumed that food would be prepared by a “skillful” housewife who “will prepare all the family’s meals at home,” but today, women outnumber men in the workforce.
“When we miscalculate and choose to not recognize poverty in the world we live in today, we are ignoring the necessary cost of living, the cost of food, the cost of the internet and more,” Ocasio-Cortez said a statement at a House hearing held earlier this month on the poverty measure.
Under her bill, The Recognizing Poverty Act, the poverty measure would be recalculated to be “sufficient to make ends meet” and vary by geographic location. In other words, the poverty line in an expensive city like San Francisco would be higher than a low-cost rural region.
“The poverty guides are so ridiculously out of date right now,” says Amy Jo Hutchison, an organizer for the Healthy Kids and Families Coalition in West Virginia, where she works with poor families. “They don’t capture people who don’t qualify” as poor but struggle to meet basic needs.
That’s the case with Amber Roy, who says she when she received her mid-February paycheck, her bank account “was at a zero.” Her $525 rent for her St. Albans, West Virginia apartment was two weeks overdue. Her sons, 14 and 12, haven’t had new shoes since the start of school because her family can’t afford it.
Roy said she feels poor – even though she works about 60 hours a week in two jobs, earning $10 an hour at one job and $13 an hour at the second. Her husband receives Supplemental Security Income, a Social Security program for disabled adults. But with annual income of $36,000, her family is far above the official poverty line of about $26,000 for a family of four.
“I can’t afford clothes for my kids that don’t come from a consignment shop,” she says. “We make too much money” for many federal aid programs, she notes.
The official poverty measure already fails to capture the experience of people like Roy, and relying on a slower inflation rate to set the poverty line will hurt more families, says Hutchinson. Even though the Trump administration points to strong job growth and a low unemployment rate, many families aren’t earning enough to keep their heads above water, she says.
“Why has the phrase ‘working poor’ become a household phrase rather than a problem?” she asks. “It’s those people working for $10-13 an hour and working two to three jobs, not entirely getting by and who don’t qualify for assistance.”
Aimee Picchi is a business journalist whose work appears in publications including USA TODAY, CBS News and Consumer Reports. She previously spent almost a decade covering tech and media for Bloomberg News. You can find her on Twitter at @aimeepicchi.
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