This statement from the Center on Budget and Policy Priorities discusses a proposal from the Trump Administration that would alter the method used to annually adjust the poverty line, effectively weakening basic assistance programs and increasing hardship for low-income families.
The Trump Administration yesterday floated a proposal to use a lower measure of inflation when adjusting the poverty line each year. Consistent with other policies the Administration has pursued, 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 reductions in assistance that this proposal would produce stand in stark contrast to the Administration’s 2017 tax law, which conferred large new benefits on the highest-income households.
If the poverty line is altered in this fashion, fewer individuals and families will qualify over time for various forms of assistance, including many who work hard but are paid low wages. That’s because using a lower measure of inflation like the chained CPI to adjust the poverty line each year would make the eligibility thresholds for various programs that serve people in need lower and lower over time, compared with what the thresholds otherwise would be. This, in turn, would lower the income eligibility limits for programs like SNAP (formerly known as food stamps) and Medicaid, which are tied to the federal poverty line. It also would reduce the Affordable Care Act’s (ACA) premium tax credits — and thereby increase the out-of-pocket premium charges faced by millions of people who purchase health insurance through the ACA marketplaces.
The notion that the nation does too much to help struggling families stands in contrast to a broad set of data. For example, even with our current poverty line and set of supports, the Department of Education says that more 1 million school children were homeless in the 2016-2017 school year, and the Department of Agriculture (USDA) says that 15 million households faced food insecurity in 2017, meaning that they experienced difficulty affording food.
This proposal is entirely discretionary on the part of the Administration. No statute or regulation requires it to alter the methodology for updating the poverty line. Rather, the Administration is choosing to consider a policy that would weaken basic assistance programs and thereby increase hardship.
The Center on Budget and Policy Priorities is a nonpartisan research and policy institute that pursues federal and state policies designed both to reduce poverty and inequality and to restore fiscal responsibility in equitable and effective ways.