The Shriver Brief : Poverty Law Commentary & Insights : Sargent Shriver National Center on Poverty Law : Affordable Housing, Healthcare Reform

The Great Recession has undermined the economic security of people and communities across America, including the poor. There were 43.6 million Americans living in poverty in 2009, an astounding 17 percent increase in the two years since the Great Recession began in 2007. With poverty at such a rising tide, never has it been more important for our elected representatives to take effective action to fight poverty.

Each year the Shriver Center publishes its Poverty Scorecard, which grades the performance of every Member of Congress on the fifteen or so most important poverty-related votes of the year. Experts in approximately twenty different subject areas help us identify which votes to use. The Scorecard’s purpose is to hold our Senators and Representatives accountable – every single one of them – for their efforts to fight poverty, or their failure to do so.

The major legislation Congress has considered over the past two years reflects an evolving federal response to the Great Recession. In 2009, there were several bills in the housing field, especially relating to foreclosure. In 2010, much of the focus was on extending unemployment insurance benefits and spurring job creation. Examples include: Hiring Incentives to Restore Employment, votes to extend the TANF jobs program, multiple unemployment insurance extensions, the Disaster Relief and Summer Jobs Act. Major consumer protection legislation and national health care reform were also produced in 2009 and 2010 in response to the troubled economy. Summaries of important legislation, including the Health Care and Education Reconciliation Act, appear in the Poverty Scorecard.

As in 2009, several major pieces of legislation that will have a significant impact in fighting poverty were enacted into law in 2010. These include the Affordable Care Act (national health care reform), reauthorization of the federal child nutrition programs, a series of extensions in the weeks of eligibility for unemployment insurance benefits, bills that sought to stimulate job creation, and a package of major fiscal relief to the states.

The final version of each of these bills was the product of significant compromise. Health care reform did not include a public option. Child nutrition reauthorization was at a lower funding level than recommended by the President and the cost was offset by a cut in future SNAP (supplemental nutrition assistance program, formerly known as food stamps) benefits, as was the cost of major fiscal relief to the states. Unemployment insurance benefit extensions were generally for short periods and did not include extensions of many other anti-poverty programs such as the TANF emergency contingency fund. Job creation initiatives were greatly scaled down from the bills that were introduced. And then there was the greatest compromise of all, a 13-month extension of federal extended unemployment insurance benefits and low-income tax credits in return for extending tax cuts for the wealthy and lowering the tax on large estates.

As a result of the significant compromises that occurred, half of the 16 bills included in the Poverty Scorecard passed both the Senate and House and were signed into law, a higher percentage than in previous years. Of the 8 other bills, 2 failed to obtain the 3/5 vote required to invoke cloture and move to a final vote in the Senate and 6 were considered in the House only. At least some of these bills were not considered in the Senate because of the Senate rule which prevents legislation from moving to a final vote unless there is a super-majority of 60 per cent voting in favor of “cloture”, commonly called the filibuster rule. The Senate should eliminate the profoundly undemocratic filibuster rule and allow legislation to be voted on and approved by a simple majority.

The Scorecard includes a summary of each vote we scored that describes the measure that was voted on and why it was important in fighting poverty.

With the help of national anti-poverty experts in 20 different fields, the Shriver Center has identified the 16 House votes and 14 Senate votes over the past year that were the most significant in fighting poverty. Each member is assigned a letter grade, A though F, based on their overall voting performance. Members with a perfect voting record earned an A+ and members who voted against reducing poverty every single time got an F-. Members who did not vote on enough bills were not graded. In total, we graded 428 of 435 Representatives and 99 of 100 Senators.

Distribution of Grades for Senators and Representatives

Congressional Delegations with Poor Voting Records

We compared each state’s poverty ranking with the average voting rank of its congressional delegation. As in past years, we often found a negative correlation between a state’s poverty rate and the voting record of its members, i.e., the states with the highest poverty rates often had delegations with the lowest average score in voting to fight poverty.

Congressional Delegations with Good Voting Records

In contrast, Congressional delegations in several states around the country with higher than average poverty rates had good records in voting to fight poverty.

Even states with comparatively low poverty rates have a lot of poor residents. The Congressional delegations in five states with relatively low poverty rates had especially good records in voting to fight poverty.

The Poverty Scorecard is a powerful tool that advocates, media, and citizens can use to evaluate the performance of their elected representatives. The goal of the Poverty Scorecard is to enable citizens to read about how well their legislator stood up and fought for the interest of low income communities. Readers can even use the action page to contact their legislator. Our representatives must be held accountable.

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The 2010 legislative session will pass without Congress reauthorizing cash assistance for poor families with children (called Temporary Assistance for Needy Families or TANF); instead, its funding was simply continued at current levels for the next year. Reauthorization will likely occur next year, and Congress has already begun hearings on how to improve TANF. When Congress gets around to reauthorizing TANF, it must mend our frayed safety net. Ultimately, the key to improving TANF will be to measure success not by caseload reductions but by the elimination and alleviation of poverty. 

The federal poverty line in the U.S. for a family of four is just $22,050. In Illinois, 15% of families with children under 18 were poor in 2009. Those who live in extreme poverty have income totaling less than half of the poverty line. It is unconscionable that the safety net in an industrial democracy such as our own still leaves nearly nineteen million people living in extreme poverty in 2009. In Illinois 8.5% of children are growing up in extreme poverty, and many are not being helped by TANF at all. The same picture is playing out around the country.

Since federal welfare reform was enacted in the 1996, the Government Accountability Office (GAO) reports that caseloads have plummeted across the country—declining 87% in just 10 years. Meanwhile, extreme poverty is 18% higher than it was in 2000. The decline in TANF caseloads is due almost entirely to a huge rise in the number of eligible families who are not receiving benefits. Even before the recession, the GAO concluded that increasing the enrollment of eligible families to 1995 levels would lift 800,000 children nationally out of extreme poverty. Welfare has declined, but the real human need for it has not.

A few months ago, the Senate Committee on Finance concluded a “Hearing on Welfare Reform: A New Conversation on Women and Poverty.” The Sargent Shriver National Center on Poverty Law submitted testimony to that hearing. Among other suggested reforms, we highlighted the need to fundamentally rededicate TANF to its purpose—to be a robust and flexible safety net to lift people out of poverty. 

Here in Illinois, we have made significant strides to improve TANF through Public Act 96-0866, (described more fully here), which went into effect on July 1, 2010. By making benefits available sooner, and to more poor individuals, our TANF program has become a more robust safety net during the recession. In fact, Illinois has experienced a relatively significant increase in TANF receipt during the recession, rising approximately 40% in two years and 15% in just the months since Public Act 96-0866 went into effect on July 1, 2010. But we are still not talking about many families; only one in nine Illinois families in poverty receives TANF.

TANF reauthorization presents the opportunity to rededicate the program to its most critical goal, the alleviation of poverty, while at the same time furthering the aims of reducing dependency on aid and strengthening families. It is time to reauthorize TANF.

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[This is the last in a series of six articles summarizing the half century history of the US poverty threshold and the dire need for an updated poverty measure.]

As the earlier posts have discussed, the main problem with the currently poverty measure is that its ridiculously out of date. Updating the measure will offer a more realistic view of what constitutes poverty in 2010. The measure will actually have some real relationship to costs rather than rely on antiquated 1955 costs. It’s currently based on the lowest cost food plan available in 1955; a time when food constituted 1/3 of the average family’s budget. Now, however, food is only 1/7 of a family’s budget while the costs of housing, childcare, and health care, none of which are taken into consideration, have all risen disproportionately. The 2008 average poverty threshold of $22,025 for a family of four represents the same purchasing power as the corresponding 1963 threshold of $3,128.

The current poverty measure is also confusing. As discussed previously, the poverty thresholds are published by the Census Bureau and are the original measure and are mostly used for statistical purposes. The poverty guidelines are published by the Department of Health and Human Services (HHS) and are used for determining eligibility for certain federal benefit programs. The Census Bureau and HHS also follow different labeling practices. The Census Bureau labels its poverty thresholds by the year to which they are applied, whereas HHS labels its poverty guidelines by the year in which it issues them. Because of these disparate labeling practices, the Census Bureau poverty thresholds for 2008 and the 2009 HHS are actually for the same year. Trying to compare these two versions leads to confusion.

Perhaps most importantly, however, is the fact that such outdated poverty measures are used for benefits determinations at all. Although some means-tested programs do not use the poverty guidelines in determining eligibility (e.g. TANF, SSI, EITC), many others do.  Currently at least 82 federal or federally assisted programs use information about numbers of people in poverty in some way in formulas for allocating funds to states or localities, or use some percentage of poverty in calculating benefits eligibility. Federal programs that use the guidelines in determining eligibility include Head Start, Low Income Home Energy Assistance, Children’s Health Insurance Program, Food Stamps, and Women Infants and Children (WIC). Some federal programs use a percentage multiple of the guidelines, such as 125%, 150% or 185%. This is not the result of a single coherent plan, instead, it stems from decisions made at different times by different congressional committees or federal agencies. Additionally, some state and local governments have chosen to use the federal poverty guidelines in some of their own programs and activities such as state health insurance programs.

Use of the poverty guidelines might not have been important if cash and in-kind government benefits for poor families had risen at the same rate. The rate of growth has, however, been very unequal. In the early 1960s more than $8 out of $10 in public means-tested benefits was transferred to poor people as cash, less than $2 as in-kind benefits. By the early 1990s, more than $7 out of $10 was transferred as in-kind benefits. Official poverty statistics, therefore, mask the full extent to which poverty has been reduced by programs to ameliorate it, because they exclude the consumption gains that result from in-kind transfers.

The new poverty supplement addresses many of these deficiencies. Yet, there will likely be little to celebrate from the new data. Given the depth and length of this recession, the supplemental measure will likely confirm what we’ve known for a while – that more and more working families are living on the brink. On the other hand, the new measure could prove transformative if it becomes the central basis by which we establish whether we are making progress on reducing poverty.

The current poverty measure’s failure to evaluate the effectiveness of anti-poverty programs creates the false impression that poverty is intractable and that we’ll never make a dent in this problem no matter what government does. In reality, research shows that just four policy recommendations, to improve the Earned Income Tax Credit, Child Tax Credit, child care assistance, and minimum wage, would cut the U.S. poverty rate by 26% over 10 years.

This new data can help us understand how well the federal government is responding to the recession and what types of policies are most effective at helping those families striving to join the middle class. In particular, these supplemental figures could take on added significance at a time when many in the government point to an overhaul of public benefit programs as the best hope for reducing the ballooning federal debt. The fact that the new measure will not immediately be used as an “official measure” is also beneficial.

Using the new measure as a supplement allows studies of the potential effects such a switch could have. Once this impact is assessed, advocates can then lobby for a change if appropriate.

In the meantime, after such a long discussion about the poverty measurement, it is important to remember exactly what the purpose of the U.S. poverty measure is. As its creator explained:

"Unlike some other calculations, those relating to poverty have no intrinsic value of their own. They exist only in order to help us make them disappear from the scene . . . .With imagination, faith and hope, we might succeed in wiping out the scourge of poverty even if we don't agree on how to measure it."
 

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[This is the fifth in a series of six articles summarizing the half-century history of the U.S. poverty threshold and the dire need for an updated poverty measure.]

As fears about the economy became reality, the call for modernizing how the nation measures poverty took on new urgency. The President’s FY 2011 budget, for example, included a proposal for creating a new poverty measure. 

Based on this new sense of urgency as well as the many previous proposals and discussions, in March the U.S. Census Bureau announced that it will be developing an alternative way to measure poverty. The Supplemental Poverty Measure will be released in the fall of 2011, at the same time that the official income and poverty measures for 2010 are released. This new measure will be broadly based on NAS’s1995 recommendations, but updated by the research done on this issue for the past 15 years. The precise formula has yet to be determined, but in general it is expected that the measure will:

• Define “family unit” to include all related individuals who live at the same address in order to reflect today’s family structure;
• Use the most recent five years of available data to increase the stability of the poverty thresholds;
• Include in-kind benefits to meet help meet food, clothing, shelter, and utility needs as income, and deduct basic expenses such as work expenses, taxes, child care, out-of-pocket expenses, child support and commuting costs;
• Be updated annually and the measure itself continuously improved based on the latest research; and
• Include some form of geographic adjustments that present a more realistic relationship between cost of living and what it takes to meet basic needs.

Based on alternative poverty measure figures previously used by the Census Bureau experimentally, it is clear that the new measure will put poverty rates much higher than the official rate. Although it’s impossible to predict precisely what the new supplemental rate will reveal, other alternative measures’ figures would predict the following:

• Overall poverty is expected to increase from 13.2 percent, or 39.8 million people, to 15.8 percent, or 47.4 million, mostly due to rising expenses from medical care and other factors.
• About 18.7 percent of Americans 65 and older, or nearly 7.1 million, will be considered poor compared to 9.7 percent, or 3.7 million, under the traditional measure, due to out-of-pocket expenses from rising Medicare premiums, deductibles, and a coverage gap in the prescription drug benefit.
• About 14.3 percent of people 18 to 64, or 27 million, will be in poverty, compared to 11.7 percent under the traditional measure, many of which will be low-income, working people with transportation and child-care costs.
• Child poverty should be lower, at about 17.9 percent, or roughly 13.3 million, compared to 19 percent under the traditional measure, since single mothers and their children’s non-cash aid, such as food stamps, will be counted as income.
• And the Northeast and West will have bigger jumps in poverty, due largely to cities with higher costs of living such as New York, Boston, Los Angeles, and San Francisco.

Importantly, this new poverty measure will not replace the official poverty rate, but will instead be published alongside the traditional figure as a "supplement" for federal agencies and state governments. The point of the new measure is to provide a more realistic view of poverty including both the necessary expenses of modern day living as well as the anti-poverty programs currently being used. Issuing a supplemental measure, however, will not change eligibility for any governmental benefits or, in and of itself, cost the government one penny in additional poverty program expenditures. While some may argue that this new measure should immediately become the official measure, such a change shouldn’t be rushed into because the impact of the new measure must first be assessed.

The next and final blog in this series explores what effects, if any, this new supplemental measure will have on current benefit programs and current programs attempting to ameliorate poverty.
 

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[This is the fourth in a series of six articles summarizing the half century history of the US poverty threshold and the dire need for an updated poverty measure.]

In September 2008 and again in 2009, the Measuring American Poverty Act (MAP Act) was introduced in Congress. The bill had a number of provisions intended to build on the NAS approach while seeking to address many of its criticisms. In general, it would have incorporated NAS’s suggestions that the poverty measure be based on current consumption patterns for food, clothing, shelter and other basic necessities, include income assistance from public programs (e.g., Earned Income Tax Credit, Food Stamps, Housing Assistance) and deduct necessary expenses (e.g., federal income taxes, work expenses, and out-of-pocket medical expenses). Finally, it would have also taken into account NAS’s suggestions to include geographical differences in the cost of living. Among the bill’s key provisions were:

• Thresholds: The Census Bureau would have been required to adopt thresholds along the lines recommended by NAS to better reflect the needs of children.
  

• Resources: The bill would have adopted the NAS approach of counting tax credits, non-cash benefits such as food stamps, and housing subsidies as household income, and, at the same time, subtract expenditures for health care, necessary work-related expenses, and child support.
  

• Historical Measure: The bill would have treated the current official poverty measure as the “historical” measure, and require that calculation and reporting of poverty rates be done for both the modern and historical measure.
  

• Use of New Measure: The bill would have specified that adoption of the modern measure would have had no automatic effects on program funding formulas or eligibility rules that currently use the official poverty measure. Instead, Congress would, over time, have been required to make whatever adjustments it considered appropriate on a program-by-program basis.
  

• Decent Living Standards and Medical Care Risk Measure:  The bill would have directed that NAS make recommendations for Decent Living Standards and Medical Care Risk measures. The Decent Living Standard would be defined as “the amount of annual income that would allow an individual to live at a safe and decent, but modest, standard of living,” that is, an amount intended to be above that of the poverty thresholds. The Medical Care Risk measure would calculate the extent to which individuals are at risk of being unable to afford needed medical treatment, services, goods, and care, taking into account both uninsured and underinsured statuses.

• Calculation of Relative Measure: While the bill would not have mandated reporting of relative poverty measures using percentages of median income, it would have required that public online tools be made available to allow members of the public to calculate poverty using alternative approaches, including calculations based on 50 and 60 percent of median income.
  

In sum, the proposed bill would have addressed a range of concerns leveled against the NAS approach. First, in addition to establishing a “modern” poverty measure the bill would have laid the groundwork for developing a Decent Living Standard measure. This measure would recognize that a family needs resources far exceeding the current poverty line in order to have a “reasonably” decent life, while acknowledging that it would not be feasible to immediately implement a new poverty line that is twice as high (or higher) than the current one. Finally, over time, a Decent Living Standard recognized in federal law could have become an important vehicle for analyzing and talking about the need to increase the number of families that have the resources not just to get by but to thrive.

The bill also would have ensured that there would be no immediate effects on existing funding or eligibility rules by specifying that there would be no automatic effects on program funding formulas and benefits eligibility.  Instead, it recognized that there may be good reason to adjust funding formulas and eligibility rules overtime.

One drawback to the MAP Act was that implementation of the new measure would have required Congressional action. In contrast, the administration could have, and still can, change the current measure without Congressional action since the directive to use the original poverty measure came from the Office of Management and Budget. Administrative action would be preferable to legislation because the measure could be developed and continually refined without locking in the detailed rules contained in parts of the Act. Still, the introduction of the MAP Act was an important step forward in showing how the administration or Congress could build on NAS’s recommendations and the subsequent learning and experience to develop a significantly better poverty measure.

The next blog in this series discusses the recently announced supplemental poverty measure.

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[This is the third in a series of six articles summarizing the half century history of the US poverty threshold and the dire need for an updated poverty measure.]

For the last fifty years, there has been no improvement to the Federal Poverty Measure. The National Academy of Sciences (NAS) 1995 approach for updating the poverty measure was probably the closest the U.S. has come to such reform in recent history. Among the report’s recommendations were that:

• The poverty threshold should be comprised of a budget for three basic categories (e.g., food, clothing, shelter including utilities) and a small additional amount to allow for other needs (e.g., household supplies).
• Actual data on household spending should be used to develop a threshold for a reference family.
• Each year, the threshold should be updated to reflect changes in spending on food, clothing, and shelter over the previous three years and then adjusted for different family types and geographic areas of the country.
• The resources of a family to be compared with the thresholds to determine poverty status should be defined to include money and near-money disposable income (e.g., resources should include most in-kind benefits and should exclude taxes and certain other nondiscretionary expenses (e.g., work expenses).
• A regular updating procedure to maintain the time series of poverty statistics should be used.

The primary advantage of NAS’s proposal was that it would have directly addressed many criticisms of the current poverty measure by:

• applying thresholds that actually reflect the costs families incur to meet a set of basic needs;
• ensuring a logical relationship between the thresholds and resource-counting rules;
• using resource rules that both better reflect family resources and expenses such as health care, work-related costs, and child support paid, and that do a far better job of showing the effects of key policies; and
• providing for geographic variation in the thresholds to reflect variations in actual costs.

These changes are important, in that they would have created a measure that better reflects the effects of government and anti-poverty policies. For example, the American Reinvestment and Recovery Act, or ARRA, contained a number of provisions intended to help poor and vulnerable groups. The current poverty measure does not reflect these efforts since ARRA’s expansion of tax credits, such as the Earned Income Tax Credit, Making Work Pay, and Child Tax Credits, as well as SNAP benefits and child care assistance, are not considered in the measure.Thus, there is no way to measure their effectiveness. Similarly, removing these credits and benefits would financially hurt many, but will not affect the poverty level at all. Adopting an NAS-type approach would have fixed this problem.

However, NAS’s approach also had a number of drawbacks. Among them:

• Measuring economic deprivation by assessing whether households can afford to meet a set of basic needs is not productive when international comparisons and many other developed countries use a “relative” measure of poverty based on the share of families below 50 or 60 percent of median income (on the premise that, in a developed society, measuring the number of families far from the median provides a better measure of whether families are outside of the social mainstream).
• Using self-sufficiency standards, basic living budgets, and family budgets aims too low because often such measures conclude that the amount of income a family needs for a reasonably decent life or similar formulation may be twice the current poverty line or higher.
• Using thresholds that reflect only food, clothing, shelter, and “a little more” do not adequately reflect the developmental needs of children.
• Excluding health care and work-related costs in the thresholds can make the measure misunderstood by suggesting that these costs are not important. And, by only subtracting actual expenses, the measure provides no recognition that some families have low or no expenses because they are going without needed health or child care.

Despite these drawbacks, NAS’s approach became the one most widely debated. There was great consensus as to many of its principles, but, as always, disagreement among others. Eventually, NAS’s suggestions were used, at least in part, as the basis for several legislative proposals for updating the poverty measure that were eventually introduced.

These legislative proposals are discussed in the next blog in this series.

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[This is the second in a series of six articles summarizing the half-century history of the U.S. poverty threshold and the dire need for an updated poverty measure.]

Today's policy experts are not the first to raise concerns over the poverty measure's accuracy. As early as November 1965, policymakers expressed concerns about the poverty thresholds and how to adjust them for increases in the general standard of living. In 1968, ideas began to be discussed about raising the thresholds to reflect such increases. A committee was established to reevaluate the thresholds. Ultimately, the committee decided to adjust the poverty thresholds only for price changes, and not for changes in the general standard of living. Thus, in 1969, it was decided that the thresholds would be indexed by the Consumer Price Index (CPI) instead of by the per capita cost of the economy food plan.

In 1973, a thorough review of federal income and poverty statistics occurred. Specifically, the Subcommittee on Updating the Poverty Threshold recommended that the poverty thresholds be updated every ten years using a revised food plan and a multiplier derived from the latest available food consumption survey. It also recommended that the definition of income used to measure overall income should also be the income definition used to calculate the multiplier for the poverty thresholds. This would generally have resulted in higher poverty thresholds at each decennial revision. Unfortunately, none of these changes were implemented.

Interestingly, beginning in 1979 the Census Bureau began testing a variety of experimental poverty measures using various expanded definitions of income and alternative methods to account for inflation. None of these, however, replaced the official poverty measure.

In 1981, several minor changes were made to the poverty thresholds in accordance with recommendations of an interagency committee. During most of the 1980s, although there were extensive debates about poverty measurements, particularly about proposals to count government noncash benefits as income for measuring poverty without making corresponding changes in the poverty thresholds, no changes were actually made.

Perhaps the closest the U.S. came to succeeding in revising this measure came in 1990. A Congressional committee tasked the National Academy of Sciences/National Research Council (NAS) with studying the official U.S. poverty measure and providing suggestions for how to revise it. In May 1995, NAS’s report was published. According to the report:

The major conclusion is that the current measure needs to be revised: it no longer provides an accurate picture of the differences in the extent of economic poverty among population groups or geographic areas of the country, nor an accurate picture of trends over time. The current measure has remained virtually unchanged over the past 30 years. Yet during that time, there have been marked changes in the nation’s economy and society and in public policies that have affected families’ economic well-being, which are not reflected in the measure.

Ultimately, none of NAS’s recommendations were implemented.

In 2004, the Office of Management and Budget held a workshop to review progress made in moving towards a new measure of income poverty as recommended by NAS’s 1995 report.  Over the succeeding three years, these discussions continued but did not result in any consensus. That is, not until recently.

Stay tuned for the next installment in the series where we discuss the findings and implications of the National Academy of Sciences’ Report.

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[This is the first in a series of six articles summarizing the half century history of the U.S. poverty threshold and the dire need for an updated poverty measure.]

The Federal Poverty Measure is badly in need of revision. The current measure is not an accurate reflection of the resources a family needs to stay healthy and thrive. This six-part series will examine the history of the measure and past and current efforts to reform it.

The Federal Poverty Measure is a decades-old relic that became widely utilized by historical accident. The current measure was created during the mid-1960s by an economist at the Social Security Administration (SSA) who began publishing articles with poverty statistics for the United States using a poverty measure that she had developed.

Since 1965, there have been two slightly different versions of the Federal Poverty Measure: (1) the poverty thresholds, and (2) the poverty guidelines. The poverty thresholds are the original version of the Federal Poverty Measure. They are published by the Census Bureau and are used mainly for statistical purposes. The poverty guidelines are a simplification of the poverty thresholds. They are published by the Department of Health and Human Services and are used for administrative purposes (e.g., determining financial eligibility for certain federal programs).

The original poverty threshold measure has two components--a set of poverty lines or income thresholds, and a definition of family income to be compared with those thresholds. Both components of the measure are flawed and need to be revised.

In devising the measure, the economist used the price of food as the basis of the measure. At the time the measure was developed, families of three or more persons spent about 1/3 of their after-tax money income on food. In particular, the "economy food plan"--the cheapest of four food plans developed by the Department of Agriculture, which was designated for "temporary or emergency use when funds [were] low," was used as the basis. The poverty thresholds were determined by taking the dollar costs of this food plan for families of various sizes and multiplying the costs by a factor of three to allow for other expenses. However, currently food is only 1/7 of a family's budget, while the costs of housing, child care, and health care, none of which are taken into consideration, have all risen disproportionately to the cost of food.

A family's income was calculated using pre-tax income levels, since that was the only income information available at that time. Although income was based on pre-tax dollars, the poverty thresholds were created using estimated income available after taxes. In other words, using this measure, a family would seem to have more money relative to the poverty line than they had in reality. The inconsistency of this method was acknowledged, but since there was no other alternative, it was understood that the result would yield "a conservative underestimate" of poverty.

In effect, the measure was for a hypothetical average family that had to cut back on its expenditures. The measure assumed that expenditures for food and non-food items would be cut back at the same rate and that the amount that a family would be spending on non-food items would be minimal, but sufficient. Thus, the original poverty measure was presented as a measure of income inadequacy, not of income adequacy. As its developer noted, "if it is not possible to state unequivocally 'how much is enough,' it should be possible to assert with confidence how much, on an average, is too little."

In May 1965--just over a year after the Johnson Administration initiated the War on Poverty--the Office of Economic Opportunity adopted the poverty thresholds as a quasi-official definition of poverty for statistical purposes and for program planning. In 1969, the thresholds became the federal government's official statistical definition of poverty, though it was clearly stated that "[the official poverty thresholds] were not developed for administrative use in any specific program and nothing in this Directive should be construed as requiring that they should be applied for such a purpose." Thus, these thresholds were intended to be used for research, not to determine eligibility for antipoverty programs.

The next blog in this series will examine previous efforts to revise the Federal Poverty Measure.

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