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Linder Bill Would Yield More Accurate Poverty Rate and Better Measure Anti-Poverty Program Effectiveness

Press Release

Location: Washington, DC

On September 9, 2010, the U.S. Census Bureau will release its "official" poverty estimates for 2009. But those data will provide only a partial view of poverty in the U.S., because official data currently ignore billions of dollars in government assistance meant to alleviate poverty, as well as other resources millions of families have available.

To better understand both the true depth of poverty in the U.S. and the effectiveness of taxpayer-funded benefits meant to reduce it, U.S. Rep. John Linder (R-GA) has introduced H.R. 5891, the "Poverty Measurement Improvement Act." In making poverty determinations, this legislation would direct the Census Bureau to count as income all taxpayer-funded benefits low-income families receive, among other resources.

"2009 saw a record amount of government anti-poverty benefits, but also a record amount not counted in determining poverty in America," Linder said.

"My bill counts all taxpayer-funded benefits as income, as well as personal resources like home equity. This will provide a clearer picture of the real resources families have available to make ends meet, and how many are truly poor. The simple fact is anti-poverty benefits taxpayers provide, as well as personal resources millions of families have to help them make ends meet, should be counted in determining whether a family is poor or not."

A pre-recession analysis of government spending found that nearly six times as many government anti-poverty benefit dollars were not counted as income, compared to those that were counted when determining whether a family is poor. The gap is likely to have grown since then. According to data compiled by the Congressional Research Service, benefits such as Medicaid, the Medicare Low Income Subsidy, Food Stamps, and Section 8 housing are not counted as income for the purposes of determining poverty. Linder's bill would update the definition of income used to determine the poverty rate to include the value of those benefits, as well as the Earned Income Tax Credit and related refundable tax credits. The calculation would also include the imputed value of home equity. In short, Linder's bill directs the Census Bureau to calculate the "official" poverty rate based on what it defines as "disposable income" instead of the current more limited "money income" concept. The Census Bureau describes disposable income as "the net income households have available to meet living expenses."

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