New Census Bureau Numbers for Poor People In the U.S.

Awhile back, I led off a posting by asking how many poor people there are in the U.S. The answer was nobody knows because the official poverty measure is so flawed.

Back in 1995, the National Academy of Sciences produced recommendations for an alternative measure that would take account of actual living costs, geographic differences and the impacts of public benefits. Experts generally agree that such a measure would be a big improvement over what we’ve got.

The Census Bureau has issued alternative poverty estimates based on the NAS recommendations. So do we now know how many poor people there are in the U.S.? No. But we’ve got at least six sets of figures that generally point in the same direction.

All four detailed sets base living costs on the Consumer Expenditure Survey–a two-part program that collects information on what Americans buy and how much they pay.

Two of these sets adjust poverty thresholds for geographic differences. One also subtracts Medicaid out-of-pocket expenses from income. The other includes Medicaid out-of-pockets in the poverty thresholds.

Looking at the first set, what we find is that, in 2008:

• There were 47.4 million poor people in the U.S., as compared to 39.8 million under the official poverty measure.
• The poverty rate was 15.8%, rather than the official 13.2%.
• The child poverty rate was 17.9%, rather than the official 19%. The drop here probably reflects the impacts of food stamps and other non-cash benefits.
• The poverty rate among seniors wasn’t lower than for any other age group, as the official measure indicates, but higher–18.7%. Rising health care costs are probably the culprit here.
• While the poverty rate for blacks was unchanged at 24.7%, poverty rates for all other race/ethnicity groups were higher than the official rates, topped by Hispanics at 29%.

The second set puts most of these figures higher.

• Instead of 47.4 million poor people, we get 50.8 million–16.9% of the population.
• The child poverty rate goes up to 19.8%, rather than down.
• Poverty rates for all race/ethnicity groups go up, with the Hispanic rate reaching 31.8%.
• However, the poverty rate for seniors goes down a bit, to 18.1%.

I wish I knew enough to know which set of figures gives us the more accurate picture.

What’s clear enough is that there were many more poor people in the country than the original Census report indicated–unless you accept the view that the Bureau’s NAS formula is seriously flawed. Here again, I wish I knew more, but the aggressively anti-government source makes me suspicious.

If the formula’s not so bad, then the Bureau’s poverty thresholds are too low. Using the NAS recommendations, the 2008 threshold for a family of two adults and two children would increase from $21,834 to $29,654.

Here’s where the need to know comes up against fiscal politics.

As I’ve written before, bills have again been introduced in the Congress to establish a new poverty measure based generally on the NAS recommendations. They would not replace the current measure as the standard for calculating federal benefits. But the alternative measure would almost certainly show that many poor people are denied benefits because they don’t fall below the official poverty line–or whatever multiplier is used for the program.

Are members of Congress ready to deal with that? What about the Obama administration, which could adopt the alternative measure on its own?

The Census Bureau said it expedited release of the NAS-based poverty estimates because both wanted to see a broader range of numbers. Now they’ve got them. Let’s see what they do.

National Housing Trust Fund Needs Funds

In 2008, the Congress established a National Housing Trust Fund as part of a large bill intended to address the emerging housing crisis.

The Fund was to provide grants to states, which they were to use to increase and preserve the supply of rental housing for extremely low and very low income households* and to help them become homeowners.

Ninety percent of the funds had to be used for rental housing, and at least 75% had to benefit extremely low income households. The initial goal was to fund construction and/or preservation of 1.5 million affordable rental units. The National Low Income Housing Coalition estimates the shortage at about 2.8 million units. So the Trust Fund could make quite a dent.

However, the Trust Fund was to be financed principally by a percentage of the value of new business generated by Fannie Mae and Freddie Mac. Their contributions were indefinitely suspended when they fell into financial distress. So we’ve got a partial solution to the affordable housing crisis on paper only.

President Obama’s proposed Fiscal Year 2010 budget for the Department of Housing and Urban Development included $1 billion for the Trust Fund. Now two bills have been introduced that would give the Fund working capital in different ways.

Both would use funds in the Troubled Asset Relief Program (TARP)–the program that’s been buying up mortgage-backed securities and other “troubled assets” to stabilize financial institutions.

The Main Street TARP Act (H.R. 3766), introduced by Congressman Barney Frank (D-MA), would simply transfer $1 billion from the TARP account to the Trust Fund. It would limit what families have to pay for rent on units funded with Trust Fund money to no more than 30% of their adjusted income. This would ensure that the units remain affordable for the long term.

The Preserving Homes and Community Act (S. 1731), introduced by Senator Jack Reed (D-RI), would transfer $1 billion of the revenues produced by the government’s sale of warrants, i.e., rights to purchase stock in the financial institutions it bailed out. NLICH says that sales of warrants have already brought in $2.9 million. So the funds to transfer should be available.

Neither of these bills would give the Trust Fund the long-term, assured revenue stream it will need to achieve the 1.5 million unit goal. But both could jump-start construction and renovation at a critical time.

The House bill current has twelve cosponsors. The Senate bill has seven. Both will need more to get them on the action agenda. NLICH has e-mails we can customized to help build support.

* Extremely low income households are those with incomes at or below 30% of the applicable area median income. The upper income limit for very low income households if 50% of the AMI. AMIs vary widely, both from state to state and within some states.

Are Poor Parents Bad Parents?

Surely the vast majority of poor parents do the best they can for their children. Still, a disproportionate number of them wind up losing their children to child welfare agencies.

One reason seems to be that more child abuse and neglect actually occur in poor families. According to the latest U.S. Department of Health and Human Services National Incidence Study of Child Abuse and Neglect, children in families with incomes below $15,000 a year were 14 times more likely to be harmed by some form of abuse and 44 times more likely to be endangered by physical neglect than children in families with annual incomes of at least $30,000.

Data like these have led the National Coalition for Child Protection Reform to call the view that child mistreatment cuts across class lines a myth. After all, it says, child abuse is linked to stress, and poor families tend to be under more stress than rich families.

But, as NCCPR goes on to argue, many child protection laws virtually define poverty as neglect. In Illinois, for example, it’s failure to provide “care necessary for [a child's] well-being.” Here in the District of Columbia, negligent treatment is “failure to provide adequate food, clothing, shelter, or medical care.”

The D.C. law goes on to make an exemption for deprivation due to lack of financial means. But there are reasons to believe this is honored more in the breach than in the observance. Consider, for example, that 34 children were put into foster care last year because of “inadequate housing.”

Perhaps other reasons were linked to poverty as well. More than half the 2008 foster care placements the Child and Family Services Agency reports were because of “neglect (reported/alleged).” There’s a lot of room here for judgments based on how well children fare when their families are poor.

Now we all know what happens when child welfare agencies leave children in homes where they shouldn’t be. But there’s also a lot of evidence that children are taken away from their parents when other options would be better for them.

What if the parents who lost their children due to “inadequate housing” had received housing vouchers or other assistance to improve their living conditions? We’ll never know.

What we do know is that a number of studies indicate that children are seriously damaged by foster care placements. For example, a large study of young adults who’d been in foster care found that they had twice the rate of post-traumatic stress disorder as Iraq war veterans. A third of them reported some form of maltreatment by an adult in the foster care home. Only 20% of them could be said to be “doing well.”

And then there are the horrible cases of children who died from abuse or neglect in foster care homes.

So when we see an exponential increase in foster care placements, as we have in D.C., we shouldn’t conclude that the child welfare system is working. We should try to find out more about the cases. Were the children being abused or willfully neglected? Or was the “neglect (reported/alleged)” something that could have been readily addressed by safety net programs or other services?

Or do a fair number of the placements reflect misjudgments on the part of the caseworkers? Professor Matthew Fraidin at the University of the District of Columbia Law School recently testified that 60% of the cases handled by his students resulted in the children’s being returned to their homes because, when confronted, CFSA agreed they weren’t being abused or neglected.

Was any racial prejudice involved? According to the latest CFSA assessment by the Center for the Study of Social Policy, as of January 2009, 98% of the children in out-of-home placements whose race was known were black. That’s about a third more than the percent of D.C. children who are black. Seems like an awfully big point spread to me. And here again we’ve got studies that make the question worth asking.

Unfortunately, neither we nor interested experts can get a good fix on whether children are being taken away from their parents because of their poverty and/or race. Here in D.C., as in most states, child welfare proceedings and records are closed to everyone not directly involved in the case.

What would happen if we let some sunshine in?

NOTE: I’m deeply indebted to Professor Fraidin for calling my attention to this issue and taking the time to educate me. The sources reflected here came largely from him. The analysis and errors, if any, are my own.

New Report Aims To Improve DC TANF Program

The DC Fiscal Policy Institute and So Others Might Eat have just issued a pioneering report on the District’s TANF (Temporary Assistance for Needy Families) program. It’s a must-read for anyone who cares about how this crucial safety net program works–and doesn’t.

I say the report is pioneering for a couple of reasons. One is that it goes beyond the usual bounds of advocacy. Yes, it calls for more funding. But it also delves into administrative issues–ways the program could be improved through new procedures, changes in vendor contracts and the like. In the process, it also provides a terrific education on a very complex program.

The report also pioneers in methodology. The research involved focus groups with local TANF recipients and interviews with service providers who work with them. The effort here was not just to collect illustrative stories or quotes but to learn from those who know the program best.

Their perspectives confirm some things we already knew, e.g., that TANF benefits are woefully inadequate. They also shed new light on some serious systemic problems–reasons the program doesn’t, as it’s supposed to do, enable needy families to become self-sufficient.

A sample of key findings:

• Five times as many DC TANF recipients receive only basic job readiness services as are placed in other available job training and education programs.
• Only small fractions of recipients who face barriers to work, e.g., domestic violence, mental and physical health issues, receive the supportive services they need.
• Recipients who find jobs (and not nearly all do) earn an average of $9.00 per hour–a full-time annual wage of just $18,720.
• Only 45% of them are still employed after six months.

As the report shows, the Income Maintenance Administration, which administers the District’s TANF program, could do a lot to improve outcomes. The City Council could conduct more probing oversight. But the root of some of the problems is in the federal legislation.

TANF will be up for reauthorization in Fiscal Year 2010. The DCFPI/SOME report and other experience-based studies can provide useful guidelines for a much-needed overhaul.