Proposal to shrink the federal poverty line - public comment opportunity

The Office of Management and Budget (OMB) is seeking public comments by June 21st, on its proposal to change how we measure poverty by updating the Census poverty thresholds for inflation each year.

The currently-used Consumer Price Index for All Urban Consumers (CPI-U) breaks down how the cost of living changes from year to year - such as increasing prices of goods/services that are creating more of a cost burden for consumers. Instead of using the standard CPI-U, the proposal by the OMB would use a slower-growing measure called the chained CPI, to inflation-adjust the official poverty line every year.

This would result in lower and lower poverty thresholds over time and - as a consequence - fewer and fewer people defined as poor enough to qualify for school lunches and breakfasts, food assistance, Medicaid, subsidized housing, prescription drug benefit subsidies and other federal benefits.

The resulting cuts to federal benefits payments would approximate $35 billion over a decade - or a 0.5 percent cut to programs. According to the Center on Budget and Policy Priorities, this initiative would ‘increase hardship’ - particularly for those who ‘work hard but are paid low wages.’ Many of the households that would be affected are led by women, who continue to typically earn less than men.

Below are a few examples by the Center on Budget and Policy Priorities of estimated impacts ten years following the potential implementation of this change:

  • Over 300,000 children would lose Medicaid/CHIP coverage

  • Over 250,000 seniors and people with disabilities would lose or get less help paying prescription drug costs

  • Over 250,000 adults would lose coverage through Medicaid expansion

  • Over 150,000 consumers would lose cost-sharing assistance and see higher deductibles

In addition, low-income households spend more of their budgets on ever-increasing housing costs. This is in the context of several studies that show that recently, low-income households have experienced higher inflation than others. Further, research shows that the existing poverty line is already too low.

If you are interested in submitting a unique public comment on this proposal, see guidance from the Coalition on Human Needs HERE. Keep up to date on relevant issues HERE.