November 7, 2013 in Nation/World

Number of poor Americans higher than official count

Associated Press
 

WASHINGTON – The number of poor people in America is 3 million higher than the official count, encompassing 1 in 6 residents due to out-of-pocket medical costs and work-related expenses, according to a revised census measure released Wednesday.

The new measure is aimed at providing a fuller picture of poverty but does not replace the official government numbers. Put in place two years ago by the Obama administration, it generally is considered more reliable by social scientists because it factors in living expenses as well as the effects of government aid.

Administration officials have declined to say whether the new measure eventually could replace the official poverty formula, which is used to allocate federal dollars and to determine eligibility for safety-net programs such as Medicaid.

Congress would have to agree to adopt the new measure, which generally would result in a higher poverty rate from year to year and thus higher government payouts for aid programs.

Based on the revised formula, the number of poor people in 2012 was 49.7 million, or 16 percent. That exceeds the record 46.5 million, or 15 percent, that was officially reported in September.

Americans 65 and older had the largest increases in poverty under the revised formula, from 9.1 percent to 14.8 percent, because of medical expenses such as Medicare premiums, deductibles and other costs not accounted for in the official rate.

Economists long have criticized the official poverty rate as inadequate. 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 declined to a much smaller share, more like one-seventh.

Online: Census Bureau: www.census.gov

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