The Biden administration has consistently searched for ways around Congress when it has a policy goal in mind.
In the Wall Street Journal, American Enterprise Institute poverty scholar Kevin Corinth wrote about a progressive plan to expand the welfare state through changing the definition of poverty, based on a report written by Democratic supporters.
The first thing to keep in mind in conversations about poverty definitions is that every definition is arbitrary. The Official Poverty Measure (OPM) currently in use dates back to the start of the War on Poverty, as Corinth outlined in an AEI paper. The way the OPM is calculated has not changed since 1978. For this year, it’s $14,580 for an individual and $30,000 for a household of four. It’s subject to yearly adjustments for inflation, according to a predetermined formula.
Since there’s nothing scientifically necessary about the current formula, and it hasn’t been updated in so long, it may seem reasonable to change it. But the way a change is currently being considered has more to do with progressive politics than with scientific accuracy.
The poverty line is important because Congress has used it to define eligibility for numerous government programs. Corinth gives examples such as SNAP, which is capped at 130 percent of the poverty line, and Obamacare, which is capped at 400 percent. “The Biden administration could raise the poverty line, and thereby expand these benefits as soon as September, when the Census Bureau releases its annual report on poverty,” Corinth wrote. “The new poverty line would affect programs starting in 2024, all without any input from Congress.”
The mechanism by which this adjustment could be made is not a new law, but rather a report issued from the National Academy of Sciences. Of the 13 authors of the NAS report, “12 of them have contributed to Democratic causes or worked for Democratic administrations,” Corinth wrote.
Unsurprisingly, the report argues for a much higher poverty line that would result in a significant expansion of welfare programs. Using the poverty line that the report advocates, rather than the OPM, the poverty line this year for a household of four would be $35,850, almost 20 percent higher. Ten years from now, the poverty line for a four-person household would be $51,650, compared to $38,500 using the OPM.
The definition the NAS report advocates would also break with precedent by being a relative definition of poverty, thereby incorporating progressive ideas about income inequality into the way poverty is measured. Under the NAS report’s definition, “People could become better off and still be classified as ‘poor’; poverty would decline only if income at the bottom of the distribution increases more quickly than in the middle class,” Corinth wrote.
The definitional change would result in a significant increase in government spending. Over the next ten years, Corinth estimates that SNAP spending would be $46.5 billion higher and Medicaid spending would be $77.5 billion higher if the new definition was adopted instead of the OPM. That new spending would be required by law, even though the definition that requires the additional spending was changed with no input from Congress.
It would also reallocate spending between the states. The new poverty measure advocated in the NAS paper is “higher in states like California and New York, where housing is more expensive, and lower in states like West Virginia and Mississippi, where housing is cheaper,” Corinth wrote.
Such a significant change in the way welfare programs are run, with major budgetary impacts, is a question Congress should decide. But the Biden administration has consistently searched for ways around Congress when it has a policy goal in mind. This is only the latest example.