Redefining Poverty

Statisticians try to frame the question in purely objective terms, but any answer is bound to have political overtones: Who is poor? Currently, the Government's official definition of poverty is based solely on cash income. A nonfarm family of four, for example, was considered to be poor if its annual income in 1981 was less than $9,290. This standard, however, does not take into account noncash benefits like food stamps, medical care and subsidized housing. Since 1965, the market value of those benefits has grown from $2.2 billion to more than $72 billion, and the programs account for two out of every three dollars of Government aid received by the poor. To determine poverty levels more accurately, the Senate asked the Census Bureau to find a way to put a dollar value on the benefits received by low-income families.

Studying data for 1979, the bureau concluded that if all major Government benefits at their full market value were considered as income, the number of families defined as poor would drop 42%, from 23.6 million to 13.6 million. Bureau experts admit there is a misleading factor in their new calculations: medical services account for 75% of all noncash benefits. While important to the poor, such services do not help lift them above the poverty line; indeed, inclusion of medical benefits in the formula makes it seem that those in the worst health are the wealthiest. Yet even if Medicaid and Medicare were excluded, the number of those defined as poor would drop 16% if the market value of their housing and food benefits were considered as income.

"People can bring to this report whatever conclusions they want," said Census Bureau Director Bruce Chapman. "We hope it will be used as a point of departure for discussion." Conservatives can use its findings to argue that poverty is less of a national problem than people have thought; liberals can contend the figures prove the importance of social programs the Administration wants to cut still further. Census Bureau experts say it is too early to take any action based on the study, since they have not yet compared the monetary value of benefits for the poor with those that primarily help middle-class families, like tax deductions for mortgage interest. A Government spokesman for the Office of Management and Budget insisted there will be no attempt to redefine the poverty line "until after a full airing of all the statistics."