Observing the frantic urgency of the Occupy Wall Street movement in all of its sign-toting, street-clogging glory, I cannot help but think that the 99 percent is fixating on the wrong problem. While the middle class has indeed suffered from the current economic downturn, that proverbial storm will eventually pass. The people who really deserve to be angry are those on the edge of the federal poverty line. As it stands now, the FPL hardly serves as an accurate measure of families' abilities to meet their needs. In light of the increasing number of long-term unemployed Americans who are struggling to make ends meet, it is time for the Obama administration to make drastic changes to the poverty cutoff.
There are several reasons to raise the FPL. The current line is set so low that it fails to extend the qualification of "poor" to a sufficiently high income level. In turn, the artificially low FPL adversely affects eligibility for poverty assistance programs such as the Food Stamp Program that use the FPL as a means test.
Merely raising the FPL is not enough, however. The current calculation method for the FPL dates from the '60s and simply multiplies the estimated cost of a frugal food budget by three. Since the '60s, this baseline has only been adjusted for inflation in food prices, despite the fact that food costs have risen at a much lower rate than housing, services and transportation costs. At this point, the poverty threshold has essentially become an arbitrary number without relation to incomes or real costs of living. The problems of the current poverty line are compounded by the system's lack of adjustments for geographical variation rendering the FPL even less accurate in states with higher costs of living.
In light of these concerns, Congress commissioned a National Academy of Sciences panel to examine the poverty line in the 1990s, resulting in recommendations that a new standard be created based on a threshold for meeting basic needs: food, clothing, shelter and a little more. The NAS panel recommended that this be calculated using an amount between the 30th and 35th percentiles of family costs as measured in the Consumer Expenditure Survey, a report on Americans' buying habits, along with a 15 to 25 percent multiplier for other necessary expenses. Additionally, the NAS report recommended that thresholds vary geographically to reflect differing regional costs.
Adopting the NAS approach would address many weaknesses of current poverty measurements. By looking at costs beyond food budgets, the NAS approach sets a poverty line that is actually reflective of families' real expenditures. The NAS approach also better accounts for expenses such as health care, work-related costs and child support. Finally, providing for geographic variation in poverty thresholds makes the NAS approach more responsive to regional needs.
Although some concerns over costs and disruption to pre-existing systems make the NAS approach far from perfect, even an imperfect reconceptualization of the FPL would be preferable to maintaining the dated and inadequate measures currently in place. Given a choice between allowing too much or too little access to poverty relief programs, it is better to extend overly generous coverage to eligible families than it is it leave those who are already down on their luck out in the cold.
While there have been various legislative measures introduced in Congress to address the FPL, the easiest solution may be for the Obama administration to bypass the legislative branch altogether. Since the current FPL formula comes from a directive of the Office of Management and Budget, the administration has the authority to change the measurement without congressional action. This solution is ideal because it would allow the government to continually refine the FPL without subjecting it to politicized debate in Congress.
While raising the FPL alone is insufficient for addressing the overall economic situation in the United States, bringing it up to a livable standard will reduce pressures on families heading into the 2012 elections. With all this in mind, it is obvious that an FPL increase would be a smart choice for both the president and the nation.
