Trump Administration Posts 57,000 Public Comments about Shrinking the Poverty Measure Online; Opposition is Overwhelming
Last May, the Trump Administration’s Office of Management and Budget (OMB) requested comments on a proposal that to us seemed to come out of the What’s Down is Up school of public policy. They proposed shrinking the annual inflation adjustment for the official poverty measure. Instead of increasing the poverty threshold annually to match increases in the standard inflation measure (the Consumer Price Index for Urban Consumers, aka CPI-U), OMB wanted to use a calculation of inflation that would grow more slowly. The upshot? As we described at the time, each year fewer people would be considered poor. Because eligibility for benefits like Medicaid and SNAP is related to the official poverty measure, over time hundreds of thousands of people would lose vital assistance. But here’s the Down is Up part: anyone can see that the price of at least some big items low-income people must buy is growing faster than standard inflation. Take rent: The cost of rent rose 31 percent from 2008 to 2018, compared to a 17 percent increase overall for CPI-U. CHN’s comments cited the Bureau of Labor Statistics and the Federal Reserve Bank of Chicago, both of which found that the items low-income people buy had higher inflation rates than all consumer goods.
We are not alone in noticing that, if anything, OMB should be thinking of letting the poverty measure grow more rapidly. More than 57,000 public comments were submitted to OMB, and they overwhelmingly oppose the idea of defining poverty down. OMB has published them (all 1,143 online pages) on the Regulations.gov website. A helpful blog by Center on Budget and Policy Priorities staffer Kyle Hayes links to a summary of comments by an impressive array of organizations, including large hospital associations, the American Medical Association, the National Association of Community Health Centers, Blue Cross/Blue Shield and other large health insurers, AARP, Justice in Aging, the Consortium for Citizens with Disabilities, FRAC, Feeding America, Bread for the World, American Heart Association, a joint comment from the American Academy of Pediatrics, Children’s Defense Fund and others, the National Governors’ Association, United Way…well, you get the idea. More than 50,000 individuals or groups submitted comments via CHN’s website. As we approach Thanksgiving, please know how thankful we are that you weighed in.
In addition to the important doses of reality contained in all these comments, another new report confirmed how wrongheaded it would be to shrink the poverty measure. Produced by the Center on Poverty and Social Policy at Columbia University in partnership with the Groundwork Collaborative, the report draws on research by economist Xavier Jaravel. Jaravel’s important insight is that the rate of inflation is not the same at all income levels. Inflation is in fact lower for people at the top of the income spectrum than it is for low-income people. This research looked at data collected by cash register scanners at U.S. retailers between 2004 and 2015. That leaves out rent, but we already know that has outstripped the CPI-U. The Center on Poverty/Groundwork report shows that if Jaravel’s data-driven approach is applied to poverty calculations, another 3.2 million people would have been counted as poor in 2018. Taking the disparate impact of inflation into account, the bottom fifth saw its income drop by 6.7 percent, while the top fifth gained 16.6 percent. If the Trump Administration remains blind to this reality and persists in shrinking the poverty calculation, things will get still worse for low-income people. If it ignores all the evidence and refuses to consider the likely impact on eligibility for services, OMB will be just as arbitrary and capricious in its policy-making as other agencies have been under Trump – and courts have often stopped those agencies from proceeding.