Trump Administration’s Redefinition of Poverty Could Shrink Social Services
“This policy would, over time, cut or take away entirely food assistance, health and other forms of basic assistance from millions of people who struggle to put food on the table, keep a roof over their heads and see a doctor when they need to.”
The Trump administration is proposing changes to the way poverty is calculated that analysts believe would result in fewer benefits for millions of poor Americans.
The proposal by the Office of Management and Budget would change the official definition of poverty by modifying the calculation the Census Bureau uses to determine the size of America’s poor population. Poverty is currently defined in America as “three times the subsistence food budget” for a family of a given size, using a basic diet established in 1963 with data from the 1955 Household consumption survey. In 2019, the poverty line for a family of four is $25,750.
As Vox’s Dylan Mathews points out, “It’s worth dwelling on this for a minute. The way we measure poverty is based on a 58-year-old analysis of 64-year-old data on food consumption, with no changes other than adjusting the poverty line for inflation.”
Effort to ‘Cut Spending’ or Adjust an Outdated System?
Both the George W. Bush and Obama administrations sought to modify the Official Poverty Measure (OPM), with many economists supporting their attempted updates. The Washington Post’s editorial board, for example, supports an updated metric, but claims the Trump administration’s initiative “looks very much like an effort to cut spending on programs for the poor that the Trump administration would be unable to reduce through legislation.”
The Office of Management and Budget’s proposal to change the OPM is in a stage of “request for comment,” and supporters of the measure say it is not focused on hurting poor people, but on adjusting an outdated system. A senior administration official told the New York Times, “Our knowledge about inflation has increased substantially since that time, so it is worth re-evaluating.”
Skeptics of the Trump administration’s alleged neutrality point to its previous actions regarding the social safety net.
The administration released its third budget proposal in March, which included at least $500 billion in cuts to Medicare, structural programs to Medicaid that would significantly shrink its funding, and huge cuts to food stamps, public housing, student loan aid, and the Women, Infants, and Children (WIC) program, among other non-defense programs. The White House is also pushing for stricter work requirements for federal aid recipients.
The Office of Management and Budget is currently headed by Russell T. Vought, a conservative and a supporter of reducing federal aid. The budget office recently planned to cut funding for the Special Olympics until President Trump intervened after public outcry.
New Measuring System Could Lower Number of Americans Eligible for Social Services
Analysts believe the Trump administration will choose a measuring system that shrinks the pool of Americans eligible for social services, such as the Chained Consumer Price Index (CPI). The Chained CPI “assumes that as the prices of goods go up, individuals substitute less expensive items, thereby reducing their overall expenses,” as explained by NPR. While this is the metric Bush, Obama and the Washington Post’s editorial board support, its selective application without updates to social programs could cut benefits for American families on the poverty line.
“This policy would, over time, cut or take away entirely food assistance, health and other forms of basic assistance from millions of people who struggle to put food on the table, keep a roof over their heads and see a doctor when they need to,” Sharon Parrott, a senior fellow at the Center on Budget and Policy Priorities, told the New York Times.
“Simply switching to a lower inflation measure would likely make the poverty line less realistic over time, rather than more accurate, in measuring what families need to get by,” Parrott said.
It would take several years for the Trump administration’s change to seriously impact social services, but the move could influence the public debate about the meaning of poverty.
Dutch Historian Rutger Bregman, who rose to prominence after his scathing speech to the Davos economic forum went viral and from his heated, unaired interview with Fox News host Tucker Carlson, is one of the major voices seeking to reshape societal conceptions of poverty.
Poverty Could Lower IQ
Bregman argues poverty diminishes health and psychological well being, and that societies would benefit by totally relinquishing it with a universal basic income. He points to the work of Princeton psychologist Eldar Shafir and Harvard economist Sendhil Mullainathan, who found that the “scarcity mentality” found in poor people focuses the brain on short-term, survival-oriented thinking and shrinks IQ in the process. “Our effects correspond to between 13 and 14 IQ points. That’s comparable to losing a night’s sleep or the effects of alcoholism,” explained Shafir.
A 2013 report from the Educational Testing Service found the economic and educational cost of child poverty in the U.S. to be $500 billion a year, with the U.S. having the second highest child poverty rate of the world’s 35 richest countries.
Many Americans view job growth as the solution to poverty, but despite the current period of economic growth and low unemployment, millions of employed Americans remain under the official poverty line. As commentators from Hedge Fund billionaire Ray Dalio to Nobel Prize-winning economist Joseph Stiglitz warn, extreme inequality is at the heart of America’s political polarization. If solutions to poverty aren’t offered by incoming officials, the country will continue to slide into the dangers of populism.