The Administration (through a request by the Office of Management and Budget (OMB)) is seeking comments on how to change the U.S. poverty measure. Changes in the poverty measure would affect how and if people, states and communities qualify for federal programs and funding. To ensure consideration, the comments must be provided in writing no later than 60 days from the publication date which was February 14, 2020. Instructions on how to submit comments is provided through the above link.
For many years there has been debate over the need to change the official poverty measure. Some argue the number of poor would go down if we counted income and support programs differently while others argue that it undercounts the number of families and people who are truly poor. The poverty level for 2020 is $12,490 for one person and $25,750 for a family of four. A separate calculation is made for the states of Alaska and Hawaii but is the same for the remaining 48 states.
The official poverty measure (OPM) is made up of a calculation that is based on the cost of food multiplied by a calculation of how much of a family budget should go toward food costs. Since the food costs are based on an original calculation from the early 1960s adjusted each year, critics argue, in part, that the standard is outdated for a number of reasons. One argument is that the original calculation over emphasizes the part of a family budget dedicated to food costs and undervalues other increasing basic costs such as such as child care, housing, education and transportation costs which have different values from that original calculation. Others argue that it does not take into account differences in the cost of living between the states.
If OMB enacts changes to the poverty line resulting in greater undercounts of poverty it would result in a less-accurate measure of families struggling to afford basic needs. It is also likely to make it difficult for families to afford health care and increase uninsured rates since health care subsidies and coverage are based in part on the poverty level. In addition, updating the poverty line using inaccurate calculation would have an impact on nutrition programs, including SNAP, and other social services assistance programs.
The questions requested for comment (base on an Administration working group report) are as follows:
1. How should a sharing unit be defined? (A sharing unit is the set of people sharing resources in a household.)
2. What standards should the group use to determine which resource measures should be preferred?
3. Should the value of health insurance be incorporated?
4. Should the value of education be incorporated?
5. What income sources should be included
6. What expenses, if any, should be subtracted from income? (For example, how should medical out of pocket costs be treated?)
7. How should the Working Group address the problem of survey misreporting of income in household surveys?
8. What types of spending should be included as consumption?
9. How should vehicles and housing be included?
10. How should the Working Group address the problem of survey misreporting of consumption in household surveys?
11. How should the thresholds be set initially? (See setting poverty thresholds in a baseline year.)
12. How should they be updated over time?
13. Should thresholds be adjusted for geographic areas? If so, how?
14. How should a sharing unit’s size and composition be accounted for?
For more information, go to https://www.regulations.gov/docket?D=OMB-2019-0007. The deadline to submit comments is Tuesday, April 14, 2020 at 11:59 pm (ET).