As part of its low-key campaign to make life just a bit more miserable for struggling Americans, the Trump administration is weighing a plan that would gradually cut programs like food stamps and Medicaid by changing how it calculates the official poverty line each year.
At least, that appears to be the case based on a new regulatory filing the White House’s Office of Management and Budget published this week, which was first spotted by Bloomberg. The document asks the public to comment on whether OMB should tweak the way it adjusts the federal poverty threshold for inflation each year. Any such move would likely lead the government to raise the line more slowly over time, and as a result, fewer Americans would end up eligible for government benefits from food aid to health insurance. Soliciting public input is a first step that often leads to a formal regulatory change.
Finding ways to slash the welfare state through executive fiat has become a hobby of sorts for the White House. Late last year, for instance, the Trump administration proposed rules that would kick an estimated 750,000 individuals off of the Supplemental Nutrition Assistance Program—aka food stamps—by curtailing the ability of states to waive the program’s work requirements for adults. (Republicans had tried and failed to include that change in the last farm bill; the proposed rule hasn’t yet been finalized) This latest gesture might not have the same sort of immediate dramatic effect—but it does have a certain perverse quality: An administration, headed by a billionaire, that passed a massive tax cut for corporations and the rich, now wants to cut the safety net by making poverty disappear on paper, while likely making hardship more acute in reality.
The official poverty line was first set at three-times the cost of a basic diet during the Johnson administration, and has been adjusted for inflation each year since then using the Consumer Price Index for All Urban Consumers, or CPI-U. In its request for comment, OMB says it’s “currently reevaluating the appropriateness” of continuing to use the index, and brings up two alternatives that tend to rise more slowly—the Chained Consumer Price Index and the Personal Consumption Expenditures Price Index.
There are many, many federal programs that use the official poverty line to determine eligibility. To take just a few important examples, Americans can’t get food stamps if they earn more than 130 percent of the poverty threshold. For Medicaid, the magic number is 138 percent (in expansion states). For Obamacare subsidies, it’s 400 percent. By inching up the official poverty mark at a slower pace each year, the government would end up cutting the number of families that qualify for those benefits.
Now, there is nothing sacred about the current poverty line; it’s the sort of outdated statistic that could probably be replaced by a more modern benchmark, like the Census Bureau Supplemental Poverty Measure. There also may be legitimate arguments for rethinking how we adjust the poverty line for inflation as part of a broader redesign. But, as Arloc Sherman of the Center on Budget and Policy Priorities noted to me, that’s not what the administration is doing. Instead, it’s gaming inflation measures to cut the safety net.
“There could be any number of ways you could reconsider the poverty definition, and they’ve cherry picked the one thing that would lower the poverty threshold,” he said.
The good news here is that inflation adjustments are a pretty slow way to cut a federal program, and a future president could reverse whatever changes the Trump administration enacts now. If a Democratic White House was feeling particularly ambitious, it could even set the poverty line to rise faster than it does today, to make up for the fact that it was probably too low to begin with. Two parties can play at this game.
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