Business Economy 08 May 2019 Donald Trump may red ...

Donald Trump may redefine poverty to cut out more from welfare rolls

DECCAN CHRONICLE. | JUSTIN SINK
Published May 8, 2019, 3:07 am IST
Updated May 8, 2019, 3:07 am IST
By changing the index the government uses to calculate how much the cost of living rises or falls, the poverty level could rise at a slower rate.
Donald Trump
 Donald Trump

Washington: The Trump administration may alter the way it determines the national poverty threshold, putting Americans living on the margins at risk of losing access to welfare programmes.

The possible move would involve changing how inflation is calculated in the "official poverty measure," the White House Office of Management and Budget said in a regulatory filing on Monday.

 

The formula has been used for decades to determine whether people qualify for certain federal programs and benefits.

The measure, first set in the 1960s, is calculated at three times the cost of a minimum food diet and adjusted every year as prices rise. In 2018, a family of four making no more than $25,900 was considered impoverished. The figure determines eligibility for a wide swath of federal, state, and non-profit programmes, including Medicaid and food stamps.

By changing the index the government uses to calculate how much the cost of living rises or falls, the poverty level could rise at a slower rate.

One proposal the Office of Management and Budget suggested in the filing is to shift to so-called chained CPI, which regularly shows a slower pace of price gains than traditional measures. Chained CPI shows slower inflation growth because it assumes consumers will substitute less expensive items when prices for specific individual goods increase significantly.

"Because of this, changes to the poverty thresholds, including how they are updated for inflation over time, may affect eligibility for programs that use the poverty guidelines," OMB said in a notice published to the federal register.

The possible change seems the latest effort by the Trump administration to make it harder to access welfare programmes. Last year, President Trump signed an executive order calling on federal agencies to more strictly enforce current work requirements for welfare recipients, and propose additional, more stringent requirements that could further reduce eligibility.

"Millions of able-bodied, working-age adults continue to collect food stamps without working or even looking for work," Trump said in December. "Our goal is to move these Americans from dependence to independence, and into a good-paying job and rewarding career."

This isn't the first time a White House has considered using chained CPI. President Barack Obama in 2014 proposed switching cost-of-living adjustments in Social Security and other retirement programmes to the index.

— Bloomberg

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