Monday, 13 May 2019

Trump plans to redefine poverty

The Trump Administration is looking into altering how it determines the national poverty level, which may put some Americans at risk of losing access to welfare programs, according to Bloomberg. The move might occur from changing how inflation is calculated in the "official poverty measure" according to a regulatory filing by White House Office of Management and Budget. That formula has been used for decades to try and determine where the poverty line is and what people qualify for social programs and federal benefits.

By changing the measure, the poverty level could wind up rising at a slower rate. One proposal has been a shift  to "chained CPI", which regularly shows a slower pace of price gains than the already rigged traditional measures. It shows slower inflation growth because it assumes consumers will substitute less expensive items when prices rise.

The change is being reported as an effort by the Trump administration to make it more difficult to access welfare programs. Last year, the president signed an executive order calling on federal agencies to strictly enforce current work requirements for welfare recipients and propose new stricter requirements that could reduce eligibility.

This is not the first time that the government has suggested using chained CPI to bring down the cost of government programs. While democrats will not like to hear it, President Barack Obama proposed switching cost-of-living adjustments in Social Security and other retirement programs to the index in 2014. Obama ultimately abandoned the proposal after outrage from congressional Democrats.

The U.N. Special Reporter on extreme poverty warned the U.S. that one of the highest rates of income inequality among Western nations, overwhelmingly benefits the wealthy and worsened inequality among the middle class and poor.

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