July 17, 2019
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Changing federal poverty measure won’t mean fewer people are poor

Jose Luis Magana | AP
Jose Luis Magana | AP
In this Saturday, June 23, 2018 file photo, Rev. Dr William Barber II accompanied by Rev. Dr. Liz Theoharis and Rev. Jesse Jackson speaks to the crowd outside of the U.S. Capitol during a Poor People's Campaign rally at The National Mall in Washington.

The Trump administration has proposed to change the way the federal poverty level is set. Such a change would impact eligibility for a myriad of federal support programs ranging from Medicaid and Medicare drug benefits to food stamps and heating assistance.

Given the significant impact of the proposed change, it is important that its potential impacts be fully evaluated and debated. Instead, the Trump administration has rushed the rules without the transparency and impact assessment that typically accompanies such proposals.

Congress should step in now to slow the rushed and incomplete process. At a minimum, lawmakers should require the Office of Management and Budget to undertake the full rulemaking process with its requirement that the impact of such a rule change be fully evaluated. Such a move would also require that public concerns and questions be addressed.

The administration’s rationale for the change — and its speed and lack of transparency — has been vague. An administration official, who declined to be quoted, said simply that the poverty level calculation hadn’t been changed in 40 years, the New York Times reported.

Douglas Holtz-Eakin, a former director of the Congressional Budget Office, told Roll Call that the method, called chained Consumer Price Index or CPI, is used to calculate inflation for tax rates, so it made sense to use it on the expense side of the ledger as well.

Numerous groups — including social service agencies, health care groups and the National Governors Association — have raised concerns that the change would reduce federal support for low-income Americans.

“Given our extensive experience with those in need, we are deeply concerned about possible changes to the [official poverty measure] that would result in the inaccurate measurement of

poverty and the loss of basic support services for millions of low-income families and children struggling daily to get by,” the Catholic Hospital Association of America said in comments to the Office of Management and Budget.

The association, and other groups, said that the move to the chained CPI would underestimate poverty. That’s because it doesn’t measure the things that poor families spend more of their money on — rent and childcare — and presumes that people will switch to lower cost items when prices rise. Especially in rural areas, the association notes, lower-cost food, housing and health care aren’t likely to be available.

The federal poverty measure is used to set eligibility levels for Medicaid, Head Start, LIHEAP, food stamps, tax credits under the Affordable Care Act and other government assistance programs. The left-leaning Center for Budget and Policy Priorities calculated that 300,000 children would lose health coverage through Medicaid and the Children’s Health Insurance Program, and that 250,000 low-income seniors and people with disabilities would receive lower prescription drug subsidies with the change.

In other words, the proposed rule change wouldn’t reduce poverty and the need for assistance. Instead, it would simply take benefits away from families and individuals who need them. This is counterproductive.

“While we understand it has been 40 years since the inflation measure has been reevaluated and an update may be necessary, Governors are committed to preventing changes to the federal poverty line calculation that would potentially reduce federal funding for critical programs, shift costs to states and adversely impact our residents,” the National Governors Association said in a letter.

Governors urge meaningful consultation about the merits of proposed adjustments with states when considering any changes to the federal poverty line. The federal government should provide states with a thorough analysis of the impact of any changes and engage in dialogue about those impacts prior to moving forward,” the letter continued.

This is a reasonable request. Without evidence that the rule change is beneficial, it appears to be a move meant to further punish Americans who are already struggling to get by. That is not a compassionate or constructive approach to policymaking.

 



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