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Crossing the line: New models differ on what it means to be poor

Published: Saturday, Dec. 29 2012 9:24 a.m. MST

Robin Flores of Paterson, N.J. catches up with her old friend, Jose Merced of Paterson, after lunch at the Eva's Village service organization in Patterson, N.J. on Christmas Day, Tuesday, Dec. 25, 2012.

Associated Press

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At 6 feet 3 inches and 250 pounds, President Lyndon Johnson was an oversized man famous for getting his oversized nose right up in another man’s face and badgering him with data, stories and sheer energy until he gave in.

This persuasive assault, known as “the treatment,” was usually a one-on-one affair. But when Johnson stood before Congress on Jan. 8, 1964, to declare a “war on poverty” the whole country was set back on its heels.

“This administration today, here and now, declares unconditional war on poverty in America,” Johnson said. “It will not be a short or easy struggle, and no single weapon or strategy will suffice, but we shall not rest until the war is won.”

“Our aim,” he added, “is not only to relieve the symptoms of poverty, but to cure it, and above all to prevent it.”

Republicans were flummoxed. “It’s the Sermon on the Mount,” one Democrat told the Washington Post. “How can anyone attack it?”

A flurry of legislation followed. Some programs, like Medicare and Medicaid, had lasting impact. But as the Vietnam War consumed the Johnson Presidency, federal focus and resources were diverted from the War on Poverty.

More to the point, it soon became clear that both wars lacked strategic vision. Declaring war was one thing. Knowing how to win it was another.

“My friends,” said President Ronald Reagan twenty-four years later in another State of the Union address, “some years ago, the federal government declared war on poverty, and poverty won.”

Using the official poverty rate, Reagan had a point. And it still holds.

Poverty in 2010 was 2 points higher than in 1970, Bruce Meyer and James Sullivan noted in a recent Brookings paper, despite years of economic growth and trillions of anti-poverty spending. And by 2011, 15 percent of Americans stood below the line, up sharply from 12 percent a decade earlier.

And yet, the numbers are murkier than they sound.

For nearly 20 years, experts have debated what it means to be poor. Finally, in the fall of 2012, the Census Bureau for the first time released its long-awaited Supplemental Poverty Measure, which some think more accurately measures true poverty.

How we measure poverty has weighty policy implications. For starters, the poverty line shapes how policy makers and the public think about various disadvantaged groups, and how we measure policy success.

The new supplementary measure, for example, counts more elderly as poor by placing more emphasis on medical costs. A third alternative, proposed by Meyer and Sullivan, finds fewer poor overall, but more of them are poorly educated, Hispanic and married couples with children.

Policies grow directly out of these assumptions. The new health care law, for example, guarantees free care to those near the poverty line, currently $23,050 annually for a family of four. Scaled subsidies are then given up to 400 percent above that line.

The new measure now appears alongside the official poverty line, but does not replace it. Not yet, anyway. In time, the two competing standards may flip places. Or both may be supplanted by a third. One thing is clear: for the first time in fifty years, what it means to be poor in America is up for grabs.

A simple yardstick

The official poverty measure is the handiwork of Molly Orshanksy, the economist who developed it for the Social Security Administration in 1963. Except for cost-of-living hikes, her poverty standard has remained unchanged for the past fifty years.

Noting that typical Americans at the time paid roughly 1/3 of their income on food, Orshansky simply took the cost of a nutritious diet and multiplied it by three to account for other expenses.

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