In recent congressional hearings and in a National Review op-ed, Senator John Kennedy (R-LA) has raised concerns about the way that the Census Bureau measures poverty. His comments ignore that the Census Bureau already has a widely respected and relied upon metric that addresses many of his points, and the poverty measure he proposes would not accurately measure the economic hardship faced by families. However, his comments do speak to the broader need for economic measures that capture the full breadth and complexity of families’ economic realities.
Many of the concerns the Senator raises about the official poverty measure not counting certain types of income have been raised by numerous poverty researchers across the political spectrum for many years. That’s why the Census Bureau, with support from the Bureau of Labor Statistics, unveiled a new poverty measure in 2011 called the Supplemental Poverty Measure (SPM). This measure reflects recommendations from a federal interagency technical working group that drew on a 1995 National Academy of Sciences report on poverty measurement and subsequent research. Census SPM estimates are available from 2009 onward and Columbia University researchers have estimated the SPM back to 1967. The SPM has become the go-to poverty measure for policy researchers.
Unlike the official poverty measure, which counts only a family’s cash income, the SPM counts non-cash benefits (e.g., SNAP, housing assistance, WIC, school lunch, and home energy assistance) and tax credits (the EITC and Child Tax Credit) as income. It also subtracts various expenses, namely federal and state income and payroll taxes, child care and other work expenses, out-of-pocket medical expenditures, and child support paid. In addition, the SPM accounts for the evolution over time in societal standards of poverty by updating its thresholds each year based on changes in what most families spend on basic needs (food, clothing, shelter, and utilities). SPM thresholds vary based on local housing costs and the family’s type of housing, such as renters versus homeowners with a mortgage. In 2024, the poverty rate using the Census Bureau’s SPM was 12.9 percent. Without accounting for these resources, poverty measures can obscure both the extent of families’ hardship and the role public benefits play in helping them get by.
One valid concern that Senator Kennedy raises is that the official poverty measure masks the progress that we’ve made against poverty over the last 50 years. For tracking long-term trends in poverty, using the SPM instead of the official poverty measure is much better because the SPM counts non-cash benefits and tax credits that have become more common over the last 50 years. In fact, SPM estimates for 2021 reveal that the American Rescue Plan’s Child Tax Credit expansion, in conjunction with other relief measures, spurred the largest one-year drop in child poverty on record, driving child poverty down to an all-time low of 5.2 percent.
Senator Kennedy’s bill would require the Census Bureau to publish a poverty measure that would follow the methodology of a CBO report from January 2025. In that report, the CBO finds that the poverty rate would have been 1.2 percent in 2019 and 0.8 percent in 2021 using the measurement specifications that Senator Kennedy prefers. However, that same CBO report warns that “the results should not be interpreted as a measure of the percentage of people who face economic hardship… measurements of poverty typically compare income with a corresponding poverty threshold that is used to determine economic hardship. For the current analysis, CBO has added sources of income to the income measure but has not adjusted the poverty threshold itself.” CBO’s analysis, completed at the request of Representative Jason Smith (R-MO), was not meant to be a proposal for a new poverty measure.
A fundamental principle of poverty measurement is that the basic needs defining the poverty threshold must align with the resources counted toward meeting it. Given that official poverty thresholds don’t account for basic medical needs, it would be misleading to add Medicaid and Medicare benefits to a family’s income without adjusting those thresholds—something the CBO report explained but Senator Kennedy is calling for nonetheless. The proposed measure’s failure to follow this principle would lead to treating medical benefits as if they’re available to pay for other needs, such as rent and groceries, which is not the case.
Fortunately, many researchers have been working on this issue and have developed methods to create a health-inclusive poverty measure that accurately aligns the public benefits available to pay for medical needs with those needs. In fact, a 2023 U.S. Census Bureau working paper used a health-inclusive poverty measure to calculate a poverty rate of 14.3 percent in 2019 and 9.6 percent in 2021. That’s very different from the 1.2 percent in 2019 and the 0.8 percent poverty rate in 2021 that CBO calculated using the approach proposed by Senator Kennedy.¹ Senator Kennedy’s bill does not follow the established process for developing a new poverty measure, which consists of multiple years of research, public engagement, and consultation with agency experts. It proposes a poverty measure that ignores best practices in poverty measurement and would paint a dangerously misleading picture of the economic realities faced by families in the United States.
Poverty statistics shape how policymakers and the public understand the economic hardship families face and the role public programs play in helping them meet basic needs. Using methods that don’t follow best practices for poverty measurement to calculate a near zero poverty rate can have harmful consequences. It can disguise the hardship that families experience. Such statistics will inevitably be misinterpreted as the percent of people facing hardship. If public benefits programs are gutted based on such misleading statistics, that would harm millions of people in not just low- but also moderate-income families.
Need-based (also known as “means-tested”) programs help nearly 1 in 3 people in the United States. People rely on public benefits programs during periods of joblessness and when working to supplement their earnings to help them afford the basics like food, health care, housing, and child care. Most of the people enrolled in these programs are in families that combine public benefits programs with substantial work. For example, nearly 90 percent of households receiving SNAP with a non-disabled, working-age adult had earnings in a given year. Public benefits help families bridge the gap between what many jobs—including many essential jobs—pay and what it actually costs to afford basic needs. Current high levels of inequality in our society would be even higher without public benefits. The programs not only help families today, but also help to expand opportunity, and are an investment in our future. Research shows that these programs have large short- and long-term payoffs for the children receiving the benefits as well as society at large.
These debates about poverty measurement also highlight a broader issue: our economic metrics often fail to capture what families are actually experiencing. GCPI is currently working on a project to estimate the numbers of people burdened by meeting basic needs like food, health care, housing, and child care. We’re finding that for millions of households across the country—even those earning well above the poverty line—meeting many of those basic needs has become unaffordable.
We should enact policies that secure a future where people have the freedom and resources to take care of themselves and their loved ones. We should not create inaccurate and misleading statistics to excuse the gutting of programs that make life more affordable for millions of families.
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¹ The latest figure in the CBO report was for 2021.