Census tallies poverty Reagan's way but still finds it rising
The Census Bureau handed the Reagan administration a political hot potato yesterday as it released new figures on the highly charged issue of poverty. The official poverty rate rose steadily during the first two years of the Reagan administration and stood at 15 percent of the population in 1982, the highest level since 1966. Figures for 1983 are not yet available.Skip to next paragraph
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David A. Stockman, director of the Office of Management and Budget (OMB), told Congress last year that the official poverty number ''substantially overstates the rate of poverty, because it ignores $107 billion in in-kind medical, housing, food and other aid that tangibly raises the living standards of many low-income families.''
But the new Census Bureau study took into account the kinds of benefits Mr. Stockman was refering to.
''When you count noncash benefits, you get a lower level of poverty. But no matter what measurement you look at, you get an upward trend'' in the poverty level, says Gordon W. Green, assistant chief of the Census Bureau's population division.
The findings are sure to be hotly debated this election year, as Democrats try to capitalize on what they see as President Reagan's unfairness to the poor. Shortly after the figures were released, US Reps. Charles Rangle (D) of New York , Harold Ford (D) of Tennessee, and Henry Waxman (D) of California announced that in light of the new statistics, they would introduce new antipoverty legislation.
Stockman had no immediate comment on the numbers.
The census study confirmed the OMB chief's assertion that the poverty rate for a given year will drop if the value of noncash benefits such as food stamps or medicaid are added to the resources counted in determining whether a person falls below the poverty threshold. For a single individual the poverty level is
''There is anywhere from a one-tenth to a one-third reduction in the official poverty rate'' when in-kind benefits are counted, Mr. Green says.
The bureau used three alternative measurement systems to value in-kind benefits. While the official poverty rate for 1982 was 15 percent, the alternative measures for in-kind benefits gave readings of 10 percent, 12.5 percent, and 12.7 percent.
The counting of noncash benefits had the sharpest downward effect on the poverty rate among those 65 years old and over, Green says. That is because they are given credit for the value of the insurance premiums they would have to pay to get private health insurance that would equal the benefits they receive under medicare and medicaid.
But considering in-kind benefits in calculating the poverty rate also adds sharply to the rate of increase in poverty between 1979 and 1982 when compared to official figures, which only include the cash individuals receive.
This is due to the combined effects of inflation and budget cuts on these in-kind programs.
For instance, between 1979 and 1982, the poverty rate rose 28 percent if only an individual's cash income is counted in determing poverty.
But if the value of in kind-benefits is counted, the rate rose between 37 and 47 percent, depending on which alternative measure is used.
In determining why poverty rose faster when noncash benefits were considered ''it is difficult to disentangle (the effects of) inflation, recession, and program changes,'' Green says.
One important factor is that many in-kind benefit programs are not indexed for inflation, while the poverty level is. So the value of some noncash benefits dropped as time went on, adding to the rate of increase in poverty when noncash benefits are considered.
Then too, Congress, at the Reagan administration's urging, cut certain social programs like welfare benefits for the working poor.
So the proportion of the the poverty population receiving noncash benefits may have declined over the four year (1979-82) period of the study, adding to the upward pressure on the poverty rate.
Reagan administration officials contend that the ongoing economic recovery will make a sharp dent in the poverty rate for 1983.
But that view is not shared by many economists and poverty experts.
''It would be hard for me to imagine getting back to the 1978-1979 (poverty) level in the next three years,'' Rudolph G. Penner, director of the Congressional Budget Office, told Congress late last year. In 1978 the poverty rate was 11.4 percent.