Trump Administration Seeks to Re-Define the Poverty Line
July 10, 2019
The Trump administration is escalating its attacks against working families and using the power of the executive branch to implement their agenda unilaterally. This circumvents the legislative process and is a rejection of the legislative branch’s power.
How Agency Rule Changes Work
Our many federal agencies create and implement policies that have profound impacts on our nation. Members of President Trump’s cabinet can direct the agencies to alter their policies and procedures by proposing specific rule changes. The agencies are required to give citizens and organizations a specified time period (usually 30-60 days) to comment on proposed changes before the agency is allowed to make a final rule. The agency must consider every comment before they implement their decision. These comments are often the only means the public has to check the power of these rule changes.
After a rule change goes into effect, people or organizations can then challenge the agencies in court and the agencies must prove they considered every argument in every submitted comment. Because of this requirement, NETWORK and many of our partners have submitted comments on the harmful proposed rule changes the Trump administration has been rolling out in various federal agencies. We encourage our members to keep track of these sly and underhanded harmful policy proposals and submit comments to prevent or at the very least, stall, the Trump administration from enacting more damaging policies without Congressional approval.
Proposed Poverty Line Rule Change
One proposed rule change that NETWORK and many other advocacy organizations submitted comments to the Office of Management and Budget (OMB) about would alter the inflation measurement used to determine the U.S. poverty line. The Official Poverty Measure (OPM) in the U.S. is calculated based on three times the estimated cost of a subsistence food budget for an average family, and adjusted for inflation each year. The OMB usually uses the Urban Consumer Price Index (CPI-U) as the inflation adjustment mechanism. The OMB’s proposed rule would mandate a switch from using the CPI-U to the chained Consumer Price Index (C-CPI-U) or the Personal Consumption Expenditure Price Index (PCEPI). The inflation index the OMB uses to adjust the poverty line is extremely important because it will alter families’ eligibility for social programs.
Both proposed alternative inflation indices—the chained CPI and the PCEPI—underestimate inflation. The CBO reports that the chained CPI grows 0.25 percentage points slower than the CPI-U. This is because the chained CPI and PCEPI account for when consumers substitute goods for one another in the marketplace based on price increases. However, low-income families do not have the level of economic flexibility where they can exchange goods for one another, thus making this measurement inaccurate. Moreover, low-income families feel inflation more severely than middle and high-income families. Low-income people spend a larger percentage of their income on housing, and home rents have risen at double the inflation rate. Using indices that underestimate the inflation rate to determine the poverty line is an utterly inaccurate measure of the costs low-income families face. These should not be used to calculate the poverty line in the U.S. Our principles of Catholic Social Justice teach us to prioritize the needs of those at the economic margins. This proposed rule denies the fundamental realities of people struggling to make ends meet.
Furthermore, this move would have devastating effects of people who currently qualify for federal programs. The Center of Budget and Policy Priorities (CBPP) calculated that switching to the chained CPI would lower the poverty line by 2.0% and using the PCEPI would reduce the poverty line by 3.4%. This dramatic reduction would prevent millions of individuals and families from receiving benefits and social services, as they would no longer be eligible even though their actual economic status remains unchanged. As a result, the CBPP projects that more than 250,000 senior citizens would no longer qualify for Medicare Part D Low-Income Subsidy, 150,000 seniors would have to pay premiums exceeding $1,500 per year, 300,000 children would lose medical coverage under the Children’s Health Insurance Program (CHIP), 250,000 adults who gained coverage under the Affordable Care Act (ACA) would lose it, and 150,000 consumers would no longer receive cost-sharing assistance in ACA marketplaces.
The U.S. poverty line is already too low—20% of people living in the U.S. do not meet one or more of nine basic need standards. This change would strip millions of life-saving supports, compounding the already severe impacts of poverty, homelessness, and hunger in our society. As people of faith, we are called to support those in need—not further entrench vulnerable families in poverty.
NETWORK believes that it is our obligation to prevent the catastrophic effects of this proposed rule. The Trump administration is circumventing the legislative branch where citizens have more influence, amplifying the need to closely follow and comment on agency rule changes spearheaded by Trump Cabinet members. Although the period for submitting comments on this rule has closed, it is our imperative to continue tracking OMB’s decision making, to hold the executive branch accountable to the people, and to advocate for policies that mend the gaps.
Elisa McCartin is a NETWORK volunteer and student at Georgetown University.