Census Bureau Reports 16.1% Poverty Rate

Another round of news on poverty in the U.S. — this time from the Census Bureau’s latest report on the results of analyses using its Supplemental Poverty Measure.

Once again, the national poverty rate is higher than the rate the Bureau earlier reported, using its official measure — 16.1%, as compared to 15.1%.

In other words, about 3 million more people — a total of nearly 49.7 million — were living in poverty last year.

On the other hand, the percent of people living in extreme poverty, i.e., below 50% of the applicable threshold, is 1.5% lower than the official measure shows.

We get a mixed picture for state-level poverty rates, for which the Bureau uses three-year averages. Some of the rates are higher than the official rate. Some lower.

The rate for the District of Columbia rises sharply — from 19% to 23.2%. This is higher than the rate for any state except California.

As I’ve written before, the official measure sets poverty thresholds at three times the annually adjusted costs of what used to be the U.S. Department of Agriculture’s cheapest food plan.

The SPM starts from the costs of basic living expenses, adjusted for differences among major geographic areas and also differences in living situations, e.g., renting versus owning.

To these, it adds some other “necessary expenses,” e.g., payroll taxes, health care co-pays and other out-of-pocket costs.

On the other side of the ledger, it takes account of not only cash income, but some “near-money” federal benefits like tax credits and also some in-kind benefits, e.g., food stamps, two forms of child nutrition assistance, housing subsidies.

And it uses actual household size, rather than counting only household members who are related to one another, as the official measure does.

These differences explain not only the difference between the overall SPM rate and the official rate, but shifts in rates for different age and race/ethnicity groups.

We see, for example, that:

• The child poverty rate drops from 22.3% to 18.1%, reducing the number of children in poverty by about 3 million.
• The poverty rate for seniors rises from 8.7% to 15.1%, increasing the number of poor people 65 and older by somewhat more than 2.6 million.
• The poverty rate for blacks drops from 27.8% to 25.7% — still far higher than the non-Hispanic white rate of 11%, but now 2.3% lower than the rate for Hispanics.
• The poverty rate for Asians rises from 12.3% to 16.9% — the largest percent change for any race/ethnicity group reported.
• For children, the extreme poverty rate is less than half what it is under the official measure — 5.1%, as compared to 10.3%.
• For seniors, however, the extreme poverty rate rises — from 2.3% to 4.3%.

This year’s report is unusually timely because it gives us a read on the anti-poverty effects of some benefits that are at immediate risk. It tells us that:

• Food stamp benefits lifted more than 4.6 million people, including  about 2.1 million children, out of poverty last year.
• Well over 8.6 million more people, including nearly 4.7 million children, would have fallen below the poverty threshold if their family’s disposable income hadn’t been boosted by refundable tax credits.
• Unemployment insurance benefits kept nearly 3.4 million people out of poverty — mostly adults, but about 963,400 children too.
• And Social Security — the single most effective anti-poverty program we’ve got — accounted for 25.6 million fewer poor people than there would have been without its benefits. Poverty rates for all age groups would have been higher. The rate for seniors would have soared to 54.1%.

So there are the benefits. Now here are the risks.

The farm bills now pending in Congress would cut food stamp benefits for at least half a million households — 1.3 million if the House version prevails. The House bill would also mean no more food stamps at all for as many as 3 million people.

As you’re well aware, the Bush-era tax cuts are expiring. We can be quite confident that most will be renewed.

But Congressional Republicans want to extend earlier versions of the refundable Earned Income Tax Credit and Child Tax Credit, not the expanded versions that have made a significant difference to low-income working families.

The federal program that funds unemployment insurance benefits for longer-term jobless workers will also soon expire. Some two million workers and their families may face the new year with no source of cash income.

Lead Republicans in Congress are about to sit at the bargaining table with their Democratic counterparts and White House officials to thrash out an alternative to the so-called fiscal cliff.

They say they’ll be amenable to increased revenues (not to be confused with higher tax rates for the wealthiest 2%).

But the deal must also include “real changes to the financial structure of entitlement programs” — apparently something along the lines of the recommendations in the plan produced by the co-chairs of the President’s fiscal commission, a.k.a. Bowles-Simpson.

These recommendations would cut Social Security retirement benefits in several different ways. With the average benefit now only $1,230 a month, we could see more seniors in poverty if the Democrats don’t hold firm to the position they’re taking now.

NOTE: A couple of the benefits impact figures reported by the Center on Budget and Policy Priorities are a bit higher than mine. This is also true for figures reported by the Center for American Progress. I’m at a loss to explain the discrepancies.

Food Stamp Benefits Too Low for a Healthy Diet, New Study Confirms

In 2008, Children’s HealthWatch and partners reported on a unique study aimed at finding out whether food stamp benefits enable low-income families to buy what they need for a healthy diet. Now we’ve got a followup.

The answer now, as before is no. And though the followup was conducted only in Philadelphia, the findings are generally applicable to other urban areas, including the District of Columbia.

For both studies, Children’s HealthWatch developed a shopping list based on the U.S. Department of Agriculture’s Thrifty Food Plan — the current basis for setting the maximum value of food stamps.

Then a couple of trained graduate students went to stores of various sizes in four low-income neighborhoods. They collected prices for the items on the shopping list and noted items that weren’t available.

Not surprisingly, small stores didn’t stock anything close to the TFP market basket.* An average of 50% of the items were missing — mostly fresh fruits and vegetables and other “healthy, nutrient rich foods.” Even medium-sized stores stocked, on average, only two-thirds.

But, in a way, what was on the shelves (or not) didn’t matter because food stamp benefits wouldn’t have covered the costs of the TFP items.

A family of four with the maximum benefit would have been short an average of $196 per month. In other words, it would have had to come up with $2,352 per year to eat according to the TFP that met its nutritional needs.

Shortfalls were considerably higher for families who have to rely on nearby small stores — $251 per month or more than $3,300 a year for the family of four.

Recall that the current maximum food stamp benefit reflects the 13.6% boost Congress passed as part of the Recovery Act. Without it, the family of four would have been short an average of $276 per month or somewhat over $3,300 per year.

This is clearly more than a low-income family can afford. Even now, as one the Drexel University’s Witnesses to Hunger says, “The amount we get for three meals a day is not cutting it …. [W]e have to eat unhealthy food.”

The food stamp boost is due to end in November 2013 rather than, as originally expected, some five or so years later. Congress foreshortened its life to offset the costs of some other measures.

Congress could, of course, restore the funds it raided, thus giving the food stamp program enough to pay for the boost until the inflation-adjusted cost of the TFP yielded the same results.

Children’s HealthWatch recommends this. The Food Research and Action Center is campaigning for it as well.

Yet there’d still be a shortfall — at least for a great many families in urban areas. Children’s HealthWatch mentions families in rural communities as well.

The root cause here is the way food stamp benefits are calculated, i.e., costs of the items in the TFP, adjusted annually for nationwide price increases.

FRAC recommended some time ago that food stamp benefits be based on USDA’s Low-Cost Food Plan. This plan, it said, is “the lowest of the three government budgets for normal use” and “generally in line with what low and moderate-income families report they need to spend.”

Children’s HealthWatch says the food plan switch should be considered — specifically to more accurately reflect food costs in areas where they’re higher than nationwide averages.

The Low-Cost Food plan now costs, on average, about 23% more than the TFP. This is considerably less than all but the poorest households spend.

The latest food security survey for USDA found that households with incomes above 185% of the federal poverty line — then about $40,790 a year for a family of four — spent 30% more than the TFP created for their size and configuration.

That’s just 1% more than the average shortfall the Children’s HealthWatch researchers found.

The food stamp program is due for reauthorization this year, along with the rest of the complex and controversial Farm Bill. Highly doubtful that Congress will even try to enact a revised law until some time after the elections.

But it’s still good to get the fundamental benefits issues on the radar screen — and keep them there in as many ways as we can.

I, for one, would like to see mystery shoppers armed with TFP grocery lists prowling corner stores and supermarkets all over the country.

* Each of USDA’s food plans is actually 15 different market baskets specifying types and quantities of food for different age and gender groups, plus two each for families of two and four members. The ChildrensWatch shopping list was apparently based on one of the market baskets for a family with two adults and two children.

Food Stamp Benefits Will Drop 10 Percent If Congress Doesn’t Undo Cuts

As many of you probably know, the Recovery Act increased the maximum food stamp benefit by 13.6%. For a family of four, this has meant as much as $80 a month more for groceries.

The boost was originally supposed to last until the increase was no greater than the cumulative annual increases in food price inflation. That was expected to happen no sooner than some time late in 2018.

Then came the need to extend two expiring parts of the Recovery Act that provided states with some urgently-needed fiscal relief. The bill couldn’t get through the Senate without a pay-for, i.e., some budget changes that would fully offset the costs.

The Democratic leadership ultimately decided to offset nearly half the costs by moving the end date for the food stamp boost back to April 2014.

Next things you know, there was a need to pay for the reauthorized Child Nutrition Act. And the Senate decided again to tap food stamp benefits. This time it lopped five months off the already-foreshortened boost.

The President’s proposed budget for this fiscal year would have put the five months back. But his budget was effectively dead on arrival in Congress.

So as things stand now, food stamp benefits will revert to what they’d have been if adjusted only for inflation in November 2013.

The Congressional Research Service estimates the initial per person loss at somewhere between $10 and $15 a month — an average of about 10%.

This might not seem like a lot. But as I’ve written before, food stamp benefits are egregiously low, even with the boost.

We’ve got new evidence from the U.S. Department of Agriculture itself.

In 2010, it reports, 41.5% of households that got food stamp benefits had “very low food security.” This means that at least one member of the household sometimes had to skimp on meals or skip them altogether because there wasn’t enough money for food.

Now low-income families may have to get along on considerably less. And our anemic economy may lose the biggest bang-for-the-buck stimulus we’ve got.

The Food Research and Action Center has launched a grassroots campaign to get the cut-off months restored, along with a now-expired suspension of a targeted time limit on food stamp benefits.

It has an online letter we can send to the President asking him to restore the two Recovery Act measures as part of his proposed Fiscal Year 2013 budget.

It also encourages us to weigh in with our Members of Congress.

Not much use if we live in the District of Columbia. But we disenfranchised souls can still do our bit by passing the word along to friends and relatives who live anywhere else in the U.S.

Acute Food Needs Now Monthly Events For More Than Three Million U.S. Households

Food pantry visits are becoming “the new normal,” reports Feeding America, the country’s largest charitable food distribution organization.

The “new normal” here refers to a shift in the role food pantries play in helping low-income people feed themselves and their families.

People used to seek help from food pantries when they had what Feeding America refers to as “temporary acute food needs.”

Now, it says, a majority of clients use pantries “as part of their long-term strategies to supplement monthly food shortfalls.” In other words, “acute food needs” aren’t occasional emergencies. They’re regular, foreseeable events.

Feeding America has come to this conclusion by analyzing client responses to a survey it conducted in 2009.

According to the new analysis:

• More than half (54%) of the clients surveyed had used a pantry for at least six months during the past year.
• More than a third of them (36%) had used a pantry at least once a month during the past year.
• These frequent users reported using a pantry for, on average, more than 28 consecutive months.

We learn two different, perhaps related facts about these recurrent and/or frequent pantry clients.

First, 58% of them received SNAP (food stamp) benefits — another clear indication that the benefits often don’t cover the costs of a month’s worth of food.

Second, a disproportionate number of recurrent users were seniors. One out of three of all recurrent users was 60 or older. And 56% of them were long-term recurrent users.

This too sheds some light on the food stamp program.

According to the U.S. Department of Agriculture’s latest report on SNAP participation trends, only 34% of eligible seniors, i.e., those at least 60 years old, were enrolled in Fiscal Year 2009. This is 38% lower than for the eligible population as a whole.

The low participation rate for seniors continues a long-term trend. Studies have produced a variety of explanations, summarized by the Food Research and Action Center in a broader review of research on access and access barriers to getting food stamps.

Some of the barriers deter participation by other groups as well, e.g., the stigma attached to “welfare,” complex applications processes, difficulties in getting to a food stamp office, long waiting times once there, the need to go back and wait recurrently to again prove eligibility.

But one barrier stands out for seniors in particular. They decide the hassles just aren’t worth the small amount they can get.

USDA’s recently-released report on the characteristics of SNAP households shows that, for most, the benefits are truly small.

Of the fewer than 2.9 million seniors who got food stamps in 2010, 80% lived alone. Their average monthly benefit was $119 — or about $1.30 per meal.

This might explain why some low-income seniors decide to rely on their own scarce resources, supplemented by free food from a friendly pantry rather than cope with the hassles involved in getting food stamps.

Also why seniors who do get food stamps would have to develop an anti-hunger strategy that includes regular visits to a pantry.

Young and old food pantry clients alike face greater risks of hunger in the months to come.

As Feeding America notes, food prices are rising. Food companies are adopting new efficiencies and thus have less surplus to donate.

Bad economic times have reduced charitable donations from other sources. Also triggered cutbacks in funding by some state and local governments.

And to top it all, Congress has cut funding for the Emergency Food and Shelter Program by 40%, leaving $80 million less for local homeless services programs, including food pantries.

The House of Representatives has approved a $63 million cut for TEFAP (the Emergency Food Assistance Program), which provides about 25% of the foods that Feeding America’s food bank partners distribute to emergency providers like pantries.

Maybe hope for TEFAP in the Senate, though ultimately the House would have to back down.

Still and all, “the beginning of the ‘perfect storm,’” as Feeding America says.