U.S. poverty at new high: 16 percent or 49.1m

WASHINGTON (AP) ― A record number of Americans ― 49.1 million ― are poor, based on a new census measure that for the first time takes into account rising medical costs and other expenses.

The numbers released Monday are part of a first-ever supplemental poverty measure aimed at providing a fuller picture of poverty. Although considered experimental, they promise to stir fresh debate over social programs to help the poor as a congressional supercommittee nears a Nov. 23 deadline to make more than $1 trillion in cuts to the federal budget.

Based on the revised formula, the number of poor people exceeds the record 46.2 million, or 15.1 percent, that was officially reported in September.

Broken down by group, Americans 65 or older sustained the largest increases in poverty under the revised formula ― nearly doubling to 15.9 percent, or 1 in 6 ― because of medical expenses that are not accounted for in the official rate. Those include rising Medicare premiums, deductibles and expenses for prescription drugs.

“As seniors choose between food and medicine, some lawmakers are threatening lifeline programs that provide a boost to those in poverty or a safety net to those grasping at the middle class,” said Jo Ann Jenkins, president of AARP Foundation, which represents the needs of older Americans. “With nearly 16 percent of seniors already living in poverty, our country cannot afford to slide further backward.”

Working-age adults ages 18-64 saw increases in poverty ― from 13.7 percent to 15.2 percent ― due mostly to commuting and child care costs.

And for the first time, the share of Hispanics living in poverty surpassed that of African-Americans, 28.2 percent to 25.4 percent. That is due to a jump in the poverty rate for Hispanics under the new measure because of lower participation among immigrants and non-English speakers in government aid programs such as housing and food stamps.

Due to new adjustments for geographical variations in costs of living, people residing in the suburbs, the Northeast and West were the regions mostly likely to have poor people ― nearly 1 in 5 in the West.

Economists have long criticized the official poverty rate as inadequate, although they differ widely on the best ways to calculate it. Based on a half-century-old government formula, the official rate continues to assume the average family spends one-third of its income on food. Those costs have actually shrunk to a much smaller share, more like one-seventh.

The official formula fails to account for other expenses such as out-of-pocket medical care, child care and commuting, and it does not consider non-cash government aid when calculating income, such as food stamps and tax credits, which have increased in the last few years.

In reaction to some of the criticism, the federal government last year tasked the Census Bureau with developing a new measure, based partly on recommendations made by the National Academy of Sciences. The new measure’s goal is to help lawmakers to better gauge the effectiveness of anti-poverty programs. It does not replace the Census Bureau’s official poverty formula, which continues to determine eligibility and distribution of billions of dollars in federal aid for the poor.

“We’re now about to go into federal debt discussions showing a major increase in elder poverty and a decrease for African-Americans. That just defies common sense, and the political implications could be devastating,” said Douglas Besharov, a University of Maryland public policy professor and former scholar at the conservative American Enterprise Institute, who called the new measure “arbitrary.”

“Sure, there’s a lot of suffering out there, but the inexorable result of all of this is to give more ammunition to groups to prevent cuts for the elderly. That means more cuts for low-income families,” he said.

Kathleen Short, a research economist at the Census Bureau, said many of the shifts in poverty reflect the large numbers of older people who hover near the poverty line after receiving cash payments for pensions. The poverty line is defined under the official measure as $11,139 for an individual, or $22,314 for a family of four.

Other findings:

Poverty for Asians increased, from 12.1 percent under the official measure to 16.7 percent. Among non-Hispanic whites, it rose from about 10 percent to 11.1 percent.

The poverty rate for children declined, from 22 percent to 18.2 percent.

On Monday, the Census Bureau said its new measure remained a “work in progress,” with additional refinements needed to better determine commuting and housing costs. The bureau also said it needed to collect additional data before it can publish reliable supplemental numbers on poverty broken down by state.