[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
MEASURING POVERTY: HOW THE
BIDEN ADMINISTRATION PLANS TO REDRAW
THE POVERTY LINE AND ROB RESOURCES
FROM RURAL AMERICA
=======================================================================
HEARING
before the
SUBCOMMITTEE ON WORK AND WELFARE
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 24, 2023
__________
Serial No. 118-WW04
__________
Printed for the use of the Committee on Ways and Means
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
______
U.S. GOVERNMENT PUBLISHING OFFICE
55-996 WASHINGTON : 2025
COMMITTEE ON WAYS AND MEANS
JASON SMITH, Missouri, Chairman
VERN BUCHANAN, Florida RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona JOHN B. LARSON, Connecticut
DARIN LaHOOD, Illinois EARL BLUMENAUER, Oregon
BRAD WENSTRUP, Ohio BILL PASCRELL, Jr., New Jersey
JODEY ARRINGTON, Texas DANNY DAVIS, Illinois
DREW FERGUSON, Georgia LINDA SANCHEZ, California
RON ESTES, Kansas BRIAN HIGGINS, New York
LLOYD SMUCKER, Pennsylvania TERRI SEWELL, Alabama
KEVIN HERN, Oklahoma SUZAN DelBENE, Washington
CAROL MILLER, West Virginia JUDY CHU, California
GREG MURPHY, North Carolina GWEN MOORE, Wisconsin
DAVID KUSTOFF, Tennessee DAN KILDEE, Michigan
BRIAN FITZPATRICK, Pennsylvania DON BEYER, Virginia
GREG STEUBE, Florida DWIGHT EVANS, Pennsylvania
CLAUDIA TENNEY, New York BRAD SCHNEIDER, Illinois
MICHELLE FISCHBACH, Minnesota JIMMY PANETTA, California
BLAKE MOORE, Utah
MICHELLE STEEL, California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio
Mark Roman, Staff Director
Brandon Casey, Minority Chief Counsel
------
SUBCOMMITTEE ON WORK AND WELFARE
DARIN LaHOOD, Illinois, Chairman
BRAD WENSTRUP, Ohio DANNY DAVIS, Illinois
MIKE CAREY, Ohio JUDY CHU, California
BLAKE MOORE, Utah GWEN MOORE, Wisconsin
MICHELLE STEEL, California DWIGHT EVANS, Pennsylvania
LLOYD SMUCKER, Pennsylvania TERRI SEWELL, Alabama
ADRIAN SMITH, Nebraska
CLAUDIA TENNEY, New York
C O N T E N T S
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OPENING STATEMENTS
Page
Hon. Darin LaHood, Illinois, Chairman............................ 1
Hon. Danny Davis, Illinois, Ranking Member....................... 2
Advisory of October 24, 2023 announcing the hearing.............. V
WITNESSES
Kevin Corinth, Senior Fellow and Deputy Director of the Center on
Opportunity and Social Mobility, American Enterprise Institute. 7
Douglas Besharov, Professor, University of Maryland School of
Public Policy.................................................. 34
Bruce D. Meyer, McCormick Foundation Professor of Public Policy,
University of Chicago.......................................... 46
David Hansen, Director of Educational Opportunities and
Investments, Perry County Ohio Job and Family Services......... 61
Elaine Maag, Senior Fellow, Urban-Brookings Tax Policy Center.... 67
MEMBER QUESTIONS FOR THE RECORD
Member Questions for the Record and Responses from Bruce D.
Meyer, McCormick Foundation Professor of Public Policy,
University of Chicago.......................................... 95
PUBLIC SUBMISSIONS FOR THE RECORD
Public Submissions............................................... 101
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MEASURING POVERTY: HOW THE
BIDEN ADMINISTRATION PLANS TO REDRAW
THE POVERTY LINE AND ROB RESOURCES
FROM RURAL AMERICA
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TUESDAY, OCTOBER 24, 2023
House of Representatives,
Subcommittee on Work and Welfare,
Committee on Ways and Means,
Washington, DC.
The Subcommittee met, pursuant to call, at 2:00 p.m. in
Room 2020, Rayburn House Office Building, Hon. Darin LaHood
[Chairman of the Subcommittee] presiding.
Chairman LaHOOD. Well, good afternoon everyone. I want to
welcome everyone to our subcommittee hearing for Work and
Welfare.
The title of today's subcommittee hearing, ``Measuring
Poverty: How the Biden Administration Plans to Withdraw the
Poverty Line--Redraw the Poverty Line and Rob Resources from
Rural America.''
I want to welcome our witnesses here today and thank you
for joining us for today's hearing on measuring poverty. My
name is Darin LaHood. I represent the 16th district of
Illinois, which covers much of central and northwest parts of
the State.
The purpose of today's hearing is to highlight the
potential executive overreach in major policy and budgetary
implications of changing the nation's poverty measure, which
drives decision-making about how Federal funds are distributed
to families in need.
In May, as many of you know, the National Academy of
Sciences report recommended the Biden Administration replace
the official poverty measure with what is called ``supplemental
poverty measure'' as the nation's headline poverty statistic
and adopted as the nation's principal poverty measure. This
report is concerning, as changing the measure would have
profound implications for how Federal assistance is distributed
to millions of Americans across the country.
For years, National Academy of Sciences reports have been
quietly used as the basis for updates on how the Federal
Government measures poverty. For example, two reports in 1995
and 2005 called for the creation of the Supplemental Poverty
Measure, which was later published for the first time in 2010
under the Obama Administration.
Numerous Federal benefit programs tie eligibility to the
official poverty measure, and Federal dollars are often
distributed to states based on the number of families in
poverty to target dollars where there is the highest need. Some
of the programs tied to the current official poverty measure
include Medicaid, SNAP, Head Start, Social Services Block
Grant, and the national school lunch program. In addition, the
Biden Administration recently proposed tying TANF funds to the
official poverty measure.
Because of the structure of the Supplemental Poverty
Measure, elevating it would dramatically alter the poverty
line, ultimately increasing spending on means-tested programs.
Only looking at two programs, Medicaid and SNAP, the American
Enterprise Institute estimated government spending could rise
by more than $124 billion over the next decade if the
Supplemental Poverty Measure was adopted. It would also result
in the redistribution of funds from low-cost-of-living and
rural states to cost--high cost of living in states [sic]. For
example, California would see their poverty rate increase by
nearly six percent, while Mississippi would see their poverty
rate drop by nearly four percent.
Alarmingly, President Biden, through the Office of
Management and Budget, has sole authority to act on the
National Academy of Science recommendation and change the
official measure without congressional approval. This would not
be unprecedented. Earlier this year, the Biden Administration
acted unilaterally to update USDA Thrifty Food Plan, abandoning
a 45-year cost neutrality policy and hiked food stamp benefits
by 27 percent.
The CBO, or the Congressional Budget Office, estimated that
the change will cost $250 billion over the next decade alone.
It is Congress's responsibility to set the poverty line and
ensure government benefits are delivered fairly and equitably
to those who need them most, not the administration or
unelected bureaucrats. In particular, our rural communities
depend on the resources and programs Congress provides to
deliver necessary services and fight poverty on the ground.
Redirecting resources away from rural communities would have a
devastating effect.
I look forward to hearing from our witnesses today on the
history of how the United States set the official poverty
measure, problems associated with the Supplemental Poverty
Measure, and how the Biden Administration could fundamentally
change program eligibility and the allocation of Federal
resources with the stroke of a pen. This issue deserves our
immediate attention to ensure Congress is responsible for
defining poverty and delivering resources to our citizens who
need it most.
Again, I want to thank our witnesses today and our guests
for being here, and I look forward to your testimony.
Chairman LaHOOD. With that, I am pleased to recognize the
gentleman from Illinois, the ranking member, Mr. Davis.
Mr. DAVIS. Thank you. Thank you, Mr. Chairman, for calling
this very important hearing, and I want to thank all of the
witnesses for coming.
Mr. Chairman, I believe that child poverty is a moral
emergency. It is inexcusable that children in the wealthiest
nation in the world are growing up in poverty. Poverty exacts
tremendous suffering from our youngest citizen, causing massive
gaps in cognitive learning, increasing risk of hunger and
homelessness, and raising the likelihood of lower lifetime
earnings and poverty as an adult.
In the face of that emergency, I am deeply concerned about
how unproductive this Republican House remains frozen by an
extremist agenda and failing at the most basic acts of
governing while children and families wait. Due to strong
Federal investment by Democrats and President Biden, especially
the Expanded Child Tax Credit, child poverty precipitously
dropped by almost half between 2020 and 2021, the lowest rate
on record.
In the chair's and my home state of Illinois, child poverty
dropped by 51 percent in 2021. This record drop in child
poverty reached the Black, Brown and rural children who were
disproportionately likely to be poor. Approximately 122,000
children in my district received monthly payments from the
Child Tax Credit, and that helped buy food, pay rent, keep the
heat on, keep the lights on, and provide the stability needed
to grow up healthy and strong.
The John Burton Advocates for Youth found that the foster
youth in their tax clinics received an average child tax credit
of $3,161 to help their young families. Alarmingly, just one
year after the Republican-led expiration of these poverty-
lowering investments in workers and families, the child poverty
rate more than doubled, causing the biggest one-year increase
in poverty we have ever seen. It pains me that over one quarter
of the children in my congressional district are poor. The
progress we made in 2021 shows that we can slash child poverty
when we have the political will to do so.
While I have a great deal of respect and reverence for
academicians, I don't think that we really need academics
quibbling about the nuances of how we measure poverty. The
doubling of child poverty in our country in one year is a five-
alarm fire. Academics arguing about how to measure that fire
leaves children suffering and weakens our nation. The focus on
the minutiae of poverty measurement ignores the wide array of
other indicators of the hardships that families experience:
food insecurity, hunger, housing instability, homelessness,
debt, or having the heat turned off.
This subcommittee should be taking action to eliminate
child poverty, not attacking struggling parents. We should
restore the Child Tax Credit, dramatically increase child care
funding to address the child care cliff that will force some
parents to leave their jobs, and enact comprehensive paid
family and medical leave and other policies that research and
experience prove effective.
After this conversation today, I hope we can work together
to end child poverty. I realize that the House Republicans must
resolve the dysfunction within their caucus before we can act.
This inability to govern has prevented us from doing our work
for three weeks, despite an urgent need to keep our government
operating, address the child care cliff, and stand by our
allies. It is shameful, quite frankly, that this Congress is
not taking strong, immediate action to end poverty, using
policies proven to work. Every day we delay action, poverty
poisons the future for millions of our children and for our
nation.
So, Mr. Chairman, Democrats stand ready. I stand ready to
set an aggressive child poverty reduction target and hold
ourselves accountable to restore income supports to strengthen
families and cut child poverty.
Again, I thank you for calling this hearing, and I thank
all of our witnesses for coming, and I yield back the balance
of my time.
Chairman LaHOOD. Thank you, Mr. Davis. We will now go to
introductions of our witnesses. We have five really terrific
witnesses today.
Again, thank you for being here today.
I will introduce them from left to right.
We have Dr. Kevin Corinth, who is the senior fellow and
deputy director of the Center on Opportunity and Social
Mobility at the American Enterprise Institute.
We next have Professor Doug Besharov, who is a professor at
the University of Maryland School of Public Policy.
We will then turn to Dr. Meyer, Dr. Bruce Meyer, who is the
McCormick Foundation professor of public policy at the
University of Chicago.
We next have Mr. David Hansen. He is the director of
educational opportunities and investments for Perry County,
Ohio job and family services.
And lastly, Elaine Maag, who is the senior fellow at the
Urban Brookings Tax Policy Center.
We will now begin with you, Dr. Corinth, for your
testimony. You are recognized for five minutes.
STATEMENT OF KEVIN CORINTH, SENIOR FELLOW AND DEPUTY DIRECTOR
OF THE CENTER ON OPPORTUNITY AND SOCIAL MOBILITY, AMERICAN
ENTERPRISE INSTITUTE
Mr. CORINTH. Chairman LaHood, Ranking Member Davis, and
subcommittee members, thank you for the opportunity to testify
about poverty measurement this afternoon.
How we measure poverty matters. It informs societal
progress in improving the lives of poor Americans, and helps
target government assistance to families in need. These
objectives are threatened by the elevation of the Supplemental
Poverty Measure, or SPM. Making the SPM the official poverty
measure would make it harder to assess whether poor families
are made better off each year and make government programs less
effective at targeting the neediest Americans.
From the perspective of accurately measuring poverty, the
SPM does one thing correct: it corrects the failure of the
official poverty measure to count the bulk of assistance
provided to the poor, such as the Earned Income Tax Credit,
food stamps, and housing assistance. However, the SPM goes
wrong in how it sets poverty thresholds. That is, the dollar
amount below which families are considered poor.
The SPM breaks with decades of precedent under the official
poverty measure, which simply asked whether the poor are
becoming better off over time. The SPM takes a radically
different approach by transforming poverty into a measure of
inequality, asking whether the poor outperform the middle
class. Under the SPM, helping middle class families better
afford housing or purchase more groceries can perversely lead
to an increase in poverty, even if poor people themselves are
made better off at the same time.
Another problem with the SPM is how needlessly complicated
the thresholds are. In fact, there are over 46,000 different
thresholds under the SPM for a single year. In reality, the
poverty line is a simple value judgment about how much is
enough to no longer be in poverty. The complexity of the SPM
thresholds obscures this basic fact, allowing experts to
determine how much is enough under the false guise of
scientific expertise.
A final problem with the SPM is that it sets lower poverty
thresholds in places where families spend less on housing. This
makes poverty appear less prevalent in places like West
Virginia and Mississippi in spite of research that finds poor
people in these and other low-income states are worse off than
poor people in high-income states like California and New York.
These problems should raise concerns about recent actions
by the Census Bureau to elevate the SPM, which is now published
alongside the official poverty measure, and no longer clearly
delineated as a research measure.
A recent National Academy of Sciences report goes even
further, recommending that the SPM be elevated to the nation's
headline poverty statistic. This alarming recommendation
provides scientific cover for the Office of Management and
Budget, or OMB, to unilaterally declare the SPM the official
poverty measure with no input from Congress whatsoever.
Making the SPM the official poverty measure would have
profound effects on government programs. Over the years,
Congress has pegged eligibility for programs like food stamps,
Medicaid, Affordable Care Act premium tax credits to the
official poverty line. For example, families must have incomes
of no higher than 130 percent of the official poverty line to
qualify for food stamps, and no higher than 400 percent of the
official poverty line to qualify for ACA premium tax credits.
Making the SPM the official poverty measure would automatically
increase eligibility for these programs and, as a result, tack
on an additional $124 billion of government spending over the
next decade.
Making the SPM the official measure would also reallocate
Federal aid from low-income states to high-income states
because of the geographic adjustment of SPM thresholds.
Families in states like West Virginia and Mississippi could be
disqualified from means-tested benefits, despite having similar
incomes to families who maintain eligibility in states like
California and New York.
In addition, Federal aid tied to poverty rates in an area
such as title I education grants, the Community Development
Block Grant, and the New Markets Tax Credit would be
reallocated from low-income states to high-income states.
Decisions about who should qualify for government programs
and how aid should be allocated across states do not belong
with the Census Bureau. Injecting political decision-making
into our independent statistical agencies would threaten their
well-deserved reputation for producing accurate, transparent,
and apolitical statistics. Congress should protect its
authority over government programs, defend our statistical
agencies from involvement in political decisions, and promote
accurate and transparent poverty statistics. It can do so by
preempting OMB from manipulating the official poverty measure.
Congress could then take on the task of improving the
measure itself, focusing on accounting for taxes and in-kind
transfers, while maintaining simple and transparent thresholds.
This would protect congressional authority over major
government programs and improve our ability to measure success
in improving the lives of poor Americans.
Thank you, and I look forward to your questions.
[The statement of Mr. Corinth follows:]
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Chairman LaHOOD. Thank you, Doctor. We will now recognize
Professor Besharov for five minutes.
You are now recognized.
STATEMENT OF DOUGLAS BESHAROV, PROFESSOR, UNIVERSITY OF
MARYLAND SCHOOL OF PUBLIC POLICY
Mr. BESHAROV. Thank you very much, Chairman LaHood and
Ranking Member Davis, and also the members of the subcommittee.
It is a pleasure to be here.
I teach at the University of Maryland. I teach poverty
alleviation, and I teach program evaluation, so I feel home.
And in 2004 to 2007, I chaired a commission that had people
from the left and the right thinking about working on poverty
measures. So I come at this with a little bit of experience,
but some chagrin. Let me explain.
Everybody thinks we should be counting the almost $300
billion in benefits that low-income Americans get. There is
agreement about that. And, with all due respect to my
conservative friends, after they say, ``Let's count it,'' we
don't really have a good answer for what that will do to our
thinking about poverty. Because, if you use the official
poverty measure and you dump $300 billion of aid into it,
poverty all but disappears under the official poverty measure.
So that can't be the way we want to go.
And my liberal friends say, ``Okay, let's put in these $300
billion of benefits, but then let's raise the thresholds.'' And
what they did was they raised the thresholds higher than the
official poverty line. In effect, raising the amount of poverty
in the country and increasing--if this is implemented in
eligibility requirements--increasing the amount of spending
that goes to people labeled poor.
Now, I am particularly looking at the Democratic members of
this subcommittee, because I don't think this is a partisan
issue when it comes to the definition. There are winners and
losers in this definition.
And, Mr. Davis, with all due respect, you didn't use
pointy-headed, but I will say I am a pointy-headed academic.
Let me tell you what the--these measures, as you all know,
determine the flow of funds, including title I, to your
districts. So I will just tell you what they do to your
constituents, okay? Elder poverty goes up, child poverty goes
down. Hispanic poverty goes up, Asian poverty goes up, Black
poverty does not change.
Now, when you go to thinking about this when it is time to
write this legislation, I am sure you will worry about that
mixture. And I think--take this hearing and the conversation
here not as, well, there is just one way to do it, but just
realize that this is the flow of money to your constituents.
And so you can say, you know, we are minutia today, but when it
comes to what happens here there are some groups in your
districts that will gain and lose. And so I think it behooves
you to look at those provisions and say isn't there a way to do
this better?
Why is elder poverty going up and child poverty going down?
You all--and Mr. Davis, in your introduction you talked about
child poverty. I agree with you. But this measure does just the
opposite. Just the opposite. Okay.
What is to do about this? And I apologize for being sort of
informal about this. This measure is unbelievably complicated
and is minutia in ways that I can't even remember. I need a
crib sheet to know what it does. But here is what I also know.
The Congress, when it sets eligibility for these programs, when
it says 135 percent of poverty, or 185 percent of poverty, or
for Medicaid up to 400 percent, it has in mind the number
underneath, that percent. It is not thinking about just $28,000
or $55,000, not just twice the poverty line. It is thinking
about those dollar amounts.
So I have thought about this a lot. The solution is going
to be messy, and I believe you all should consider locking in
the benefit levels in your districts before they change this,
so that your districts gain or lose money. And I think that is
the natural bipartisan approach here that will, in the short
run, be an answer. In the long run we have to deal with how we
more accurately measure poverty.
Anyway, I have 19 seconds more and I don't need them. Thank
you very much.
[The statement of Mr. Besharov follows:]
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Chairman LaHOOD. Thank you, Professor.
I now recognize Dr. Meyer for you to deliver your opening
remarks. Five minutes. Thank you.
STATEMENT OF BRUCE D. MEYER, MCCORMICK FOUNDATION PROFESSOR OF
PUBLIC POLICY, UNIVERSITY OF CHICAGO
Mr. MEYER. Chairman Smith, Chairman LaHood, Ranking Member
Davis, and distinguished members of the committee, thank you
for the opportunity. I am Bruce Meyer, McCormick Foundation
professor at the University of Chicago. For 40 years, I have
focused on the accuracy of government data.
Chairman LaHOOD. Sir, is your microphone on?
Mr. MEYER. Thank you. I have worked for and advised the
main Federal agencies measuring poverty.
A recent National Academy of Sciences report recommended
making the Supplemental Poverty Measure the principal poverty
measure. Such a change would be counterproductive. In my
testimony I have six conclusions.
First, statistical agencies should focus on better
measuring income and spending, rather than changing poverty
thresholds that are value judgments and ultimately arbitrary.
Those who devised the original poverty thresholds understood
that where you draw the line is subjective or arbitrary. The
thresholds set in the 1960s were picked to achieve a desired
poverty rate, with the food budget decided on to achieve that
end, rather than the other way around. This principle was
overlooked in the recent NAS report that focuses on devising
ever more complicated, but ultimately arbitrary, thresholds.
Second, to better measure family income we should enhance
survey data with administrative data. When Census Bureau's
survey data on incomes such as earnings, pensions, or
government payments are compared to individual tax or
government payment records, they almost invariably indicate
under-reporting. Often close to half a given income type is
missed in the Census Bureau's Current Population Survey, the
source of official poverty statistics. This problem has
worsened over time.
The Census Bureau realizes this problem and has supported
two large-scale projects, one of which I lead, to combine
administrative data with survey data. The administrative data
come from the IRS and programs that pay out benefits. These
data are currently only used experimentally. Additional data-
sharing agreements across agencies and Federal legislation are
needed.
When administrative data are substituted for erroneous
survey data where possible, poverty is almost halved. We can
see that government programs reach more people, it just wasn't
recorded in the surveys. The SPM makes the problem of income
under-reporting worse, likely because the income transfers and
taxes it includes are particularly misreported.
In response to the problem of under-reported survey income,
the Social Security Administration recently stopped two
publications. Like the SSA, the Census Bureau should consider
discontinuing the publication of poverty statistics until it
has the combined survey and administrative data in place to
measure income accurately.
Third, consumption poverty measures are often more
informative. Given that administrative sources of income are
incomplete and they are not available historically, a good
alternative is consumption data. Consumption poverty is a more
direct measure of living standards and identifies a more
deprived group of poor individuals, which is the goal of
poverty measurement. The BLS began publishing consumption
poverty this year. This effort should be further supported.
Fourth, the much-publicized poverty reduction claims for
the expanded CTC are greatly exaggerated. Many have claimed
that poverty of children doubled in 2022 because the 2021
temporary changes to the CTC expired. This example shows how
statistics may be skewed by income data quality issues.
Consumption poverty declined through this period, as low-
income families were able to afford to spend more on food,
housing, and other goods in 2022 than 2021. One of the reasons
for this is that they saved much of their stimulus payments.
Even the Census Bureau income numbers say the CTC expansion
played a much smaller role than the stimulus payments in this
period, which makes sense since the stimulus payments were much
larger. Even the 35 percent increase in 2022 child poverty the
Census attributed to the CTC changes not doubling is too high
because it counted in the 2021 poverty numbers expanded CTC
payments received as refunds in 2022: another reason to prefer
the consumption numbers to get the timing right.
Fifth, proposed poverty measurement changes should be based
on evidence. The SPM does a worse job of identifying the most
deprived families than either the OPM or consumption poverty
measures. This happens in part because the SPM raises poverty
in high-income areas and lowers it in low-income areas.
Problematically, people in low-income areas are markedly worse
off, according to a wide range of indicators including
mortality, health assets, long-run income, housing
characteristics, ability to pay bills, education, and food
security.
Sixth and last, Congress should rethink its reliance on a
broken NAS. Congress asks the NAS to provide advice on many
topics. Unfortunately, the NAS mixes political judgments with
its scientific tasks. The overwhelming political slant of
report authors has been documented. As a result, large errors
such as those in a recent CTC and child poverty report have
gone unacknowledged and uncorrected.
Thank you, and I look forward to your questions.
[The statement of Mr. Meyer follows:]
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Chairman LaHOOD. Thank you, Dr. Meyer. I now recognize
Director Hansen for five minutes.
STATEMENT OF DAVID HANSEN, DIRECTOR OF EDUCATIONAL
OPPORTUNITIES AND INVESTMENTS, PERRY COUNTY, OHIO JOB AND
FAMILY SERVICES
Mr. HANSEN. Great. Thank you, Chairman Smith, Chairman
LaHood, Ranking Member Davis, and members of the subcommittee.
Thank you for the opportunity to share my experience working in
rural America with some of our most vulnerable citizens and on
how adjusting the current poverty line would impact our
community and the services we provide.
My name is David Hansen. I am the director of educational
opportunities for Perry County Job and Family Services in
southeast Ohio. I lead Perry County's workforce development
activities. I focus my work on guiding individuals out of
government dependance through work and toward economic
independence and security.
There are 36,000 residents in our rural Appalachian
community. The cultural and economic heritage of Perry County
is deeply rooted in coal, but the last coal mine closed in
2019. Having literally powered the industrial might of Ohio and
the U.S. for decades, Perry County now ranks 76 out of 88 Ohio
counties in terms of poverty.
I urge you to consider a few examples I see that I can
share out of many on how this specific proposal would work
against rural communities as I understand it.
To help our families, we rely on funding from TANF,
Temporary Assistance for Needy Families, and on Medicaid and on
supports for child care. Replacing the official poverty measure
with the Supplemental Poverty Measure would lower eligibility
for these programs in Perry County. It would do the same to
many other programs, including SNAP, the Supplemental
Assistance for Needy Families program, and the National School
Lunch Program. All of these are vital to food security, health,
and child care, and these in turn are essential in helping
someone out of poverty through work and training.
The proposal would impact large parts of our work funded by
WIOA, the Workforce Innovation and Opportunity Act. WIOA is so
important to us in increasing investment in skills and learning
on the part of individuals, and so help them to hold good-
paying, family-supporting jobs.
Under the Supplemental Poverty Measure, Ohio's poverty rate
would go down by 2.3 percentage points just by changing the
definition. This means, for Ohio, less funding from Federal
programs to distribute dollars based on proportional poverty
rates across all the states. But within Ohio itself, the impact
on rural Perry County would be even greater. I estimate the
proposal would lead to a decrease in the official county
poverty rate of about 5 to 6 percentage points, or 25 percent
of the current count. Yet none of the newly unpoor would
actually be any better prepared for work-based independence or
have better access to transportation or child care or food
security, all required for training and work.
Here are some reasons why I believe it would work this way.
Our community does not have access to the same funding streams
as do urban areas and cannot afford many activities often
related to resolving poverty that urban areas can. Their
absence in rural areas adds significant costs in ways that may
not be captured by the Supplemental Poverty Measure. Some of
our local governments have only two percent of the property tax
funding base per resident than a typical urban county. As a
result, we don't have community centers in Perry County for
youth drug prevention activities, nor do we have year-round
recreational facilities for adults for their health and
engagement in supportive programs such as weight loss.
Here is another very specific example. Our agency holds an
annual back-to-school bash for TANF-eligible families in the
summer. We share with them the basic needs for a new school
year: backpacks, tennis shoes, school supplies, and their
school spirit sweatshirts. In urban areas better-funded
schools--and the property tax remains a large component of K
through 12 finance in Ohio--these better-funded schools often
get this organized and financed on their own. But in Perry
County it falls on our agency, and we use TANF for this event.
I don't see how the 200 families who would be dropped from our
back-to-school bash under the proposed new poverty measure
would be better off for it. The SPM would not capture the added
back-to-school costs that would be borne by residents in Perry
County when it wouldn't typically fall in disadvantaged
families and better-funded suburban and urban districts.
We and other rural communities can't afford the workforce-
oriented public transit systems that urban areas have. Nearly
80 percent of our W-2 workforce leaves for jobs in urban
counties entirely without public transit options at a cost not
accounted for. Nor can we afford many small programs with
really big impact on those in poverty. Rural Ohio typically
lacks zoning and land banks. These two programs can really
improve the lower end of the community's housing market. The
urban-to-rural disparity of funding and policy means that
quality and livability per dollar of valuation of affordable
housing and urban areas is, in my view, far better than what I
have seen in rural Ohio.
Many private activities of Perry County have withered with
the loss of the coal industry and manufacturing. Social clubs,
fraternal orders, union halls, and even churches, with all that
they can do to help people in need, are in steep decline in the
community. That is another uncaptured cost.
Economically, we do not have a Walmart in the county, and
the people we serve are not online to begin with, let alone on
Amazon looking for inexpensive shopping.
The high cost of diminished commercial activity can be seen
in the absence of a private driver's ed school in Perry County.
Driver's ed in Ohio is typically a small business activity
widespread in urban and suburban and small town Ohio. Instead,
in Perry County, you have to leave the county to get a license.
The added cost of fuel, vehicle access, time, and more to get a
license is beyond so many of the people we serve, and it won't
be captured by the Supplemental Poverty Measure that I can see.
As for my work, the lack of a driver's license is a major
barrier in getting many of our customers to work and training.
If the Administration were to adopt this Supplemental Poverty
Measure, Ohio and rural communities like Perry County would
suffer. There are value judgments to be made about the quality
of life in rural America and in fairness and equity between
rural and urban communities. For these value judgments,
Congress should have responsibility for making the decisions.
Chairman LaHOOD, Chairman Smith, and members of the
Committee, thank you for the opportunity to testify today, and
I look forward to your questions.
[The statement of Mr. Hansen follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman LaHOOD. Thank you, Director Hansen.
We will now turn to our last witness, Ms. Maag, for your
five minutes.
STATEMENT OF ELAINE MAAG, SENIOR FELLOW, URBAN-BROOKINGS TAX
POLICY CENTER
Ms. MAAG. Chairman Smith, Chairman LaHood, Ranking Member
Davis, and members of the subcommittee, it is an honor to share
insights on recent policies that have reduced poverty.
Investing in children, particularly those in families with
low incomes, can produce a lifetime of benefits.
I am a senior fellow in the Urban Institute Brookings
Institution Tax Policy Center and a co-director of the
Innovations in Cash Assistance for Children initiative. The
views expressed in this testimony are my own and should not be
attributed to the Urban Institute, its trustees, or its
funders.
For children to thrive, they need to have basic needs met.
Yet 12.4 percent of children were living below the poverty line
in 2022, a tremendous jump from the 5.2 percent of children
living in poverty in 2021. The jump in child poverty was
largely driven not by changes in economics or demographics. It
was a policy choice.
During 2021, the Federal Government adopted a robust set of
economic supports that dramatically decreased poverty,
including an expansion of the Child Tax Credit. When the
expansion expired, the resulting increase in child poverty was
unprecedented. Never before had so much progress been made to
reduce poverty, only to have it evaporate after a single year.
Absent the expansion, about 19 million children in the lowest-
income families are unable to receive the full credit because
their parents don't earn enough. Children left out of the full
credit are disproportionately Black and Hispanic. Children
living in rural America are more likely to be left out than
urban children.
Besides substantially reducing child poverty, the Expanded
Child Tax Credit also reduced hardship, and it fostered
parental investments in their children.
The most substantial Federal investments in children are
refundable tax credits, including the Child Tax Credit and the
Earned Income Tax Credit, but the credits are not as effective
as they could be. Research suggests that the Earned Income Tax
Credit reduces income inequality between Black and White
households in the 25th and 50th income percentiles, but does
little at the 10th income percentile.
The Child Tax Credit delivers a benefit to about 90 percent
of families with children. The benefits from the credit are not
equal. On average, middle and high-income families with
children receive more from the Child Tax Credit than those with
low incomes. This upside-down investment is costly. Researchers
estimate that child poverty costs the U.S. between 500 billion
and 1.03 trillion annually. Children experiencing poverty tend
to earn less and pay less in taxes as adults, and they are more
likely to require public supports later in life.
Growing up in poverty is correlated with a host of negative
outcomes: reduced cognitive development, starting school less
prepared to succeed, and experience--reduced academic
achievement and skill development. They are less likely to
graduate from high school or college and have lower-paying and
less stable jobs later in life. Long term, on average, they
face substantially reduced earnings and poor health outcomes,
likely related to inadequate access to medical care.
Policy choices can and did disrupt this cycle when the
Child Tax Credit was expanded and reduced child poverty to
never-before recorded lows. Early effects of the expanded Child
Tax Credit have been well-documented by numerous researchers at
many institutions, and the evidence continues to mount. As
noted, the Child Tax Credit played a substantial role in
reducing child poverty.
Researchers also documented a 25 percent decline in food
insufficiency among low-income Black, Hispanic, and White
children. During the time of the advanced Child Tax Credit
payments, families reported not only having enough to eat, but
they were more likely to report eating healthier, balanced
meals relative to those who did not receive the payments.
The expanded Child Tax Credit corresponded with reductions
in financial hardships. Families who received the payments
reported declines in credit card debt and a reduced reliance on
high-cost financial services: payday loans, pawn shops, selling
plasma.
Among recipients of Supplemental Nutrition Assistance
Program benefits, researchers found families were more likely
to be able to pay utility bills. In New York City, Child Tax
Credit recipients were less likely to report they ran out of
money before the end of the month. Parents invested in their
children's futures, purchasing tutoring services and
extracurricular activities. This was especially true among
Black and Hispanic and other non-White households. In some
cases, families reported using the money to save for college, a
pathway to improved economic opportunity.
The expanded child credit allowed families to better meet
the needs of their children. The credit reduced food
insecurity, fostered economic security, and allowed parents to
invest in their children. Research shows that investing in
children can lead to a lifetime of benefits for both the
children and society. The expansion was ultimately a limited
experiment in the power of policies to lift up even very low-
income children.
[The statement of Ms. Maag follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman LaHOOD. Thank you for your testimony.
Before we go to questions and answers, I do want to
recognize our full committee chairman, Chairman Jason Smith,
for five minutes.
Chairman SMITH. Thank you, Chairman LaHood, Ranking Member
Davis, and thank all the witnesses for being here and taking
time out of your busy schedule.
Today's hearing is on the surface about an issue that
otherwise might draw very little attention with average-day
Americans, but a discussion over how the government chooses to
define one of various metrics it uses to allocate resources is
not likely to reach the front pages of America's newspapers.
And yet, as this hearing will show today, this issue will have
a profound impact on millions of Americans in the communities,
particularly rural communities, where they live and work.
As my colleagues are aware, numerous social services and
child welfare programs base their eligibility requirements on
what is known as the official poverty measure that the Census
Bureau produces annually. Federal resources are then targeted
towards states and communities with higher instances of
poverty. But now, the Biden Administration is considering
unilaterally discarding that standard and using a new metric
that will result in an estimated 124 billion in new welfare
spending over the next decade.
But even more concerning is that this change will divert
resources away from America's rural communities. Under the
Supplemental poverty measure that the administration is
considering using to redraw the poverty line, in a high-cost-
of-living state like California, the poverty line for a family
of 4 would be as high as $47,000 and as low as $32,300 in the
State of Alabama. That means families in rural states and
communities have to be poorer than families in places like
California in order to access SNAP and Medicaid benefits. This
is about robbing resources from rural America and rewarding
coastal elites, all under the cloak of a recommendation from a
National Academy panel that is overwhelmingly liberal.
Instead of focusing limiting funds on politically charged
research, we should focus our attention on support that helps
families in poverty gain the employment skills they need to
lift themselves out of poverty.
I also cannot help but mention that the metric the
Administration recommended is a useful tool for our Democrat
colleagues, because it inflates the actual benefits of massive
Federal spending through programs like the so-called American
Rescue Plan Act. It gives them the ability to decry the loss of
that sugar-high spending as soon as the money runs out. It is a
not-so-clever attempt to demand more Federal spending at all
times, at all costs.
Also troubling is the way in which these changes measuring
poverty can come about. Under current law, the White House's
Office of Management and Budget has sole--has sole--authority
to change the metric that is used. In other words, an executive
agency can make a dramatic change in how Federal tax dollars
are spent, impacting millions of our fellow citizens without an
ounce--without an ounce--of input from Congress.
It seems appropriate that this committee should consider
whether leaving that power in the hands of unelected
bureaucrats is as foolish as it sounds. After all, the
Constitution gives Congress the power of the purse, not the
executive branch. That question is made all the more important
considering that we are talking about programs that have a
direct impact on millions, millions of individuals and families
struggling to just get by.
Thank you, Chairman LaHood, for holding this hearing.
[The statement of Chairman Smith follows:]
Chairman SMITH. And I yield back.
Chairman LaHOOD. Thank you, Chairman Smith. We will now
proceed to question-and-answer portion of the hearing, and I
will recognize myself.
As has been talked about, many Federal programs have
proportional allocation formulas that are based on a number of
individuals living below the official poverty line and
distribute funding based on each state's share of families in
poverty relative to the other states. This is in order to
target Federal dollars to states and communities with the
highest need. The higher the poverty rate a state has, the more
Federal dollars a state receives through programs like the
Child Care Block Grant, special education grants, and Community
Development Block Grants.
Likewise, the lower the poverty rate, the less Federal
dollars a state receives through these programs.
[Chart]
Chairman LaHOOD. This chart behind me and on the two
television monitors here shows the poverty rate change if the
Biden Administration were to adopt the National Academy of
Sciences recommendation to replace the official poverty measure
with the Supplemental Measure. As you can see, low-cost-of-
living states like Mississippi would see their poverty rate
drop by nearly four percent, while high-cost-of-living states
like California would see their poverty rate increase by nearly
six percent. The result of this change would mean Mississippi,
which currently has the highest child poverty rate in the
country, would receive fewer Federal dollars and California
would receive more based on the new supplemental poverty rates.
Dr. Corinth, you did the research behind this chart. What
is it about the structure of the Supplemental Poverty Measure
that increases the poverty rate so much in California, while
decreasing so much in a state like West Virginia?
Mr. CORINTH. Thank you for the question.
So the Supplemental Poverty Measure adjusts thresholds
based on how much people spend on housing. So, if people spend
more on housing in places like California and New York, as they
do, that means that the poverty threshold will be higher in
those areas. By contrast, if people spend less on housing in
places like Mississippi and West Virginia, we will then have a
lower poverty threshold in those areas.
As a result of those differing thresholds, the poverty rate
will be much higher in places where the cost of housing is
higher in places like California.
Chairman LaHOOD. And can you comment the impact this is
going to have on rural communities in particular?
Mr. CORINTH. Yes. So rural communities, in those places,
families spend a lot less on housing. Therefore, the thresholds
will be lower and their poverty rates will be lower. As a
result, these block grants that are targeted to places with
higher poverty rates, those will be less likely to be directed
to those rural areas.
Chairman LaHOOD. And can you comment, just procedurally, is
it true the Biden Administration could make the changes
reflected on this map through executive action alone, with no
input from Congress or statutory changes?
Mr. CORINTH. That is correct. There is something called
Statistical Policy Directive 14. This is a statistical policy
directive that is put out by OMB. Under their sole authority,
the OMB director could change that with no congressional input
whatsoever.
Chairman LaHOOD. Thank you for that. I am now going to turn
to Dr. Meyer.
Dr. Meyer, in 2021, Democrats dismantled the Child Tax
Credit, making work less valuable than a government check,
unfortunately. Media outlets have been bold--have made bold
claims about the reduction in child poverty associated with
expansion during COVID.
Republicans doubled the Child Tax Credit in the Tax Cuts
and Jobs Act. But I have serious concerns about delinking the
credit from work, especially when we have a worker shortage
right now. I understand that you have published some research
that showed extending the Democrats' Child Tax Credit would
cause 1.5 million workers to exit the workforce. Can you talk
about that, Dr. Meyer?
Mr. MEYER. Thank you, Representative LaHood. I am happy to
talk about it.
We had a consensus in the past that tax credits should
redistribute income and encourage work at the same time. That
was the idea behind the Earned Income Tax Credit and the
original Child Tax Credit. For one year, we had a tax credit
that discouraged work by taking away the work incentive that
was built in to the current and prior Child Tax Credit.
Eliminating that work incentive, we estimated, based on the
relationship between tax rates and employment that we had seen
in the past, that more than a million parents would leave the
workforce if this Child Tax Credit that is available regardless
of whether you work were made permanent.
We learned back in the case of welfare reform that giving
money unconditionally to families can reduce work. When we
changed welfare to be pro-work in the 1990s--there was
bipartisan consensus to do that--we saw that more than a
million single mothers entered the workforce, and the living
conditions of single-parent families improved substantially
over time. We saw that even at the very bottom of the
distribution, living conditions, spending on food, clothing,
housing, and other goods increased quite appreciably,
especially for those at the very bottom after we reformed
welfare to be pro-work, rather than in the direction that--the
expanded Child Tax Credit, which eliminated the requirement
that people have earnings.
Chairman LaHOOD. And Dr. Meyer, as an academic and a
researcher who I know has spent a lot of time looking at
various ways to measure poverty in your work, do you think the
National Academy of Sciences process is working correctly?
And what can be done to make the committee more balanced?
Mr. MEYER. Well, there is a basic problem that the people
that are generally appointed to these committees are quite
skewed, politically. My colleague at the American Enterprise
Institute, Scott Winship, has documented that rarely, almost
never, will you see someone who is centrist or conservative on
one of these panels. And that has real--a real problem, because
there isn't the back and forth, there isn't the checking of
what they do that would be desirable.
I have pointed out that there was a major error in the
report on child poverty issued a couple of years ago, in that
they counted the economic incentives and factored them in when
it favored the policies that members of the committee wanted to
argue, and then they ignored those same types of incentives
when for a different policy it made it look worse. And I don't
think that kind of thing would happen if you had a more
centrist, balanced membership on these panels.
These panels also take on tasks that are more political
than scientific, and that just isn't what the National Academy
of Sciences should work on.
Chairman LaHOOD. Thank you, Dr. Meyer, for that. That
concludes my questions. I will now turn to Mr. Davis, the
ranking member, for his questions.
Mr. DAVIS. Thank you. Thank you, Mr. Chairman. And thank
you again for all of your participation.
Professor Besharov, I don't have much of a problem with
research and measurement, but I do have some reservations
sometimes about timing. So let me move on then and ask Ms.
Maag.
For years, structural racism has led to much higher rates
of child poverty among children of color, especially Black
children, and some of our past declines in poverty excluded
children of color. What effect did the enhanced Child Tax
Credit that Democrats enacted in the American Rescue Plan Act
have on poverty among Black children?
Ms. MAAG. We saw dramatic declines in poverty among Black
and Hispanic children when the Child Tax Credit was made fully
refundable.
Mr. DAVIS. In 2018, my Republican colleague, Mike
Gallagher, and I started the Congressional Trauma-Informed Care
Caucus to promote greater awareness of the challenges people
face after exposure to trauma.
We know that poverty is a cause of trauma for children.
What kind of harm do they suffer when we fail to enact policies
to fight poverty, including the lasting consequences when we
don't act?
Ms. MAAG. Poverty is harmful to children at all ages. It
results in reduced gray matter development early in life, less
prepared to attend school, less likely to graduate from high
school, less likely to get a stable, well-paying job later on.
There is excellent recent research that shows that it is not
just that a single year in poverty is bad, but it becomes
additive. So the more time a child spends in poverty, the worse
the effects.
Mr. DAVIS. So the more effective approaches to dealing with
trauma and how it impacts, would that be a beneficial activity
for us to put more emphasis on to help reduce poverty?
Ms. MAAG. Absolutely. Families need to be able to plan
their budgets over the course of their children's lifetimes so
they can adequately save. It is important to keep programs in
place, and not pull the rug out from under families.
Mr. DAVIS. What other policies do you think might be
helpful?
Ms. MAAG. There is substantial work we--that can be done on
child care, where we could make sure that children have safe
places to spend time during the day. We can improve
transportation. We could improve access to SNAP benefits. In
that National Academies report, they sort of looked at several
avenues, and certainly increasing benefits, particularly in the
summer or for families with teens, were two ways that you can
cut against poverty.
Mr. DAVIS. So the more comprehensive our approaches are,
the more likely we are to see positive results.
Ms. MAAG. Absolutely. The programs end up being self-
reinforcing. So, if you put income into someone's life, they
are more likely to get health care. If you give them health
insurance, they are more likely to get healthier. And so
everything can work together to elevate the child and make sure
we are not missing important aspects of development along the
way.
Mr. DAVIS. Thank you. Thank you very much.
And I yield back, Mr. Chair.
Chairman LaHOOD. Thank you, Mr. Davis. I recognize Dr.
Wenstrup of Ohio.
Dr. WENSTRUP. Thank you, Mr. Chairman. I thank you for
holding this hearing today. I think it is very important. I
appreciate our witnesses being here today. I want to welcome
Mr. Hansen from my home state of Ohio.
But I am glad we are having this important hearing to
discuss the impact of the National Academy of Sciences report
that recommended the Biden Administration replace the nation's
official poverty measure with Supplemental Poverty Measure.
How poverty is measured sets the eligibility for many
important Federal programs, but I am finding it hard to
understand why we should take Federal dollars away from states
with rural populations and lower cost of living to bail out
states like California, who continue to implement policies that
artificially raise the cost of things like housing and energy.
So we are rewarding unaffordable, expensive housing rather than
working to provide affordable housing, which, I think, is the
answer to a lot of our ills.
You know, let's face it. In America today, and when it
comes to poverty issues, which I am very passionate about, we
have one party that has policies that are pro-dependance and
decrease opportunities for people to come out of poverty, but
to hold them there, and another that is pro-independence, with
increased opportunities.
Mr. Hansen, in your testimony, I appreciate you touch on
the unique challenges that rural Appalachian communities in
Ohio have, or--and they are facing when it comes to the impact
of switching to SPL. I mentioned earlier that many programs
rely on the poverty threshold to determine eligibility: one of
them, which is TANF.
As you mentioned, in Ohio, TANF and WIOA can be braided
together and targeted for career development. In other words,
opportunities for independence for youth ages 14 through 24.
Programs like this are vital to ensuring that Federal and state
programs are focused on lifting people out of poverty and into
the workforce and into an independent lifestyle.
You remind me of one of the case workers from my district,
Julie Weiss, who you may know in Highland County, who says that
success for her would be for the--her job not to be needed
anymore. That is how she defines success as she tries to help
people and lift them out of poverty.
Can you just touch on how this switch that they are talking
about would impact that program specifically, and some of the
downstream effects that might occur?
Mr. HANSEN. Yes. Thank you, Representative.
So this program, the acronym in Ohio is the CCMEP, which
braids together TANF and WIOA. It is geared to 14 to 24-year-
olds at a particularly vulnerable period in trying to get
people into the workforce and to give them--the skill ladder
that we use is just basic life skills. Can they respond to an
alarm? Can they get to a job?
Then comes what I call essential skills. Those are kind of
the skills that keep you in your job. Do you know how to deal
with a boss? Are you able to work in teams? Well, we have to
start with 14-year-olds in trying to develop that skill level.
Eventually, they do reach the highest level of learning, you
know, the jobs that are--the skills that are required at a
specific workplace.
We are seeing in central Ohio, on the borders of
Representative Carey's district and your district as well,
pretty strong economic growth. But the demands? Those are for
mid-skilled and higher jobs. And it is really a challenge to
help people understand that, in a sense, this country--once
upon a time you stopped at ninth grade. Then we made a lot of
progress by going to twelfth grade. Now you have got to go to
fourteenth grade. Yet we have to really get that journey
starting pretty early on.
I would love to, like, actually extend it somehow--and this
would be a TANF avenue--to start talking to fifth and sixth
graders about their careers. In Ohio, the K through 12 system
has been charged with that. They are stepping up their game,
but there is still so much more that can be done to take
advantage of the opportunity that is out there. Thank you.
Dr. WENSTRUP. Thank you.
Dr. Corinth, can you touch on how switching to the
supplemental poverty level would create perverse incentives for
states with high-cost-of-living to continue regulating and
artificially increasing the cost of things such as housing and
energy?
Mr. CORINTH. Yes, sir. Thank you, Dr. Wenstrup, for the
question.
The biggest driver of the housing and affordability crisis
are excessive regulations on building housing. If you can't add
more housing supply, then the price of housing goes up. This
switch to the Supplemental Poverty Measure would incentivize
those regulations, because now a state like California or, say,
Los Angeles or San Francisco would be rewarded for excessive
regulations that drive up housing costs because that is going
to increase their poverty threshold and, therefore, lead to
more Federal aid going to their state.
Dr. WENSTRUP. Thank you.
I yield back.
Chairman LaHOOD. Thank you, Dr. Wenstrup. We will now apply
the two-to-one questioning rule. We will turn to Mr. Carey of
Ohio.
Mr. CAREY. I want to thank you, Chairman LaHood and the
panel of witnesses for coming in to discuss this urgent matter.
It is good to see my dear friend, David Hansen, here from the
Buckeye State. We have known each other for probably close to
20 years now, and I do have it on firm authority from his wife
that I can treat you as a hostile witness, so----
[Laughter.]
Mr. CAREY. It is critical that we ensure that the
Administration does not redefine the Federal poverty line,
which would result in rural Americans losing valuable Federal
dollars.
I want to just go to a couple of questions, because I want
you to expand upon it. And for--and I missed your testimony, I
read your testimony, but Perry County was one of those counties
in Ohio that was--kind of went through many different, you
know, different phases. It started with pottery and then went
into coal. And so now, they are right on the verge of kind of
where the new Intel plant is in just the county right next to
it.
So, Mr. Hansen, many are advocating for increasing monetary
aid and removing work incentives for lower-income individuals
and families. In your opinion, what would be the effect in your
community and your work of trying to help individuals reenter
the workforce if work requirements and incentives were removed
from Federal aid?
Mr. HANSEN. Thank you for the question, Representative. I
just think it would be--it would just be setting us backwards.
We have to help people to, what I say, expand their circles of
experience to understand that there is this really pretty
fabulous 21st-century economy out there. They--you know, if you
are in Perry County and your uncle worked in coal, you don't
understand that it has got a different set of challenges now
for you to thrive.
I believe that people are really up to those challenges,
but helping people to understand--and, you know, these are
small, rural communities that are fairly isolated. They don't
understand what the opportunities are. They are not like us,
reading the newspapers and saying, oh my gosh, this is a
fabulous landing that is happening in the state.
The Intel plant--so, you know, the traditional coal mining
world, solid workers. And I was--knew the 200 that were laid
off from Buckingham, which is the last mine that was closed in
Perry County. Any manufacturer would love to have them because
they understood safety, yet it was just such a different world
because they really didn't have any certification. Nothing
could be transferred because they worked within the mine. They
knew how to use large, heavy equipment, but they would still
have to go back to a six-month journey to get a heavy equipment
license for anywhere else.
Well, Intel is going to be offering 3,000 manufacturing
jobs, and I talk to Perry County people about that. It is not
coding in a basement. It is what you would like to do
otherwise. And, if you know Perry County, it is like a lot of
rural America. It is open, it is outdoors. You live on 15
acres, at least. You know how to fix a tractor and all that
kind of stuff. This is something that they would like to have
once they understand it.
But you need the incentives, you need all kinds of things.
The incentives complement what we do with outreach. When we try
to hire social workers now, they have to be engaging. They have
to be willing to look people in the eye. They have to be able
to be friendly. They have to be willing to sit out in the
parking lot of a Dollar General and say, ``Hey, can I talk to
you about what we can do for you?''
So you can see that we are trying all that we can. And, you
know, if the eligibility is decreased, that just means, I mean,
the people that we are talking about who would kind of be the
200 that I mentioned in my testimony, they are not made any
better off by that change at all.
Mr. CAREY. To that, David, you know, the other thing that
people don't seem to understand is when you said those 200
people that were laid off from the Buckingham mine--and I knew
many of them personally, myself--for every one coal mining job
in a county, there are four spin-off jobs. So while you may
have had 200 people that were affected, that number obviously
goes up to 800 people that were affected in Perry County.
Mr. HANSEN. Mm-hmm.
Mr. CAREY. Real quickly, because I am going to run out of
time, do you feel that this is the best strategy to uplift
people from poverty and break the generational grip of economic
insecurity by having these work incentives?
Mr. HANSEN. Yes, absolutely. I absolutely do.
Mr. CAREY. All right, Mr. Chairman, I yield back.
Chairman LaHOOD. Thank you, Mr. Carey. I recognize Ms. Chu
of California.
Ms. CHU. Children living in poverty endure lifelong adverse
impacts on their childhood development and are at risk for poor
outcomes and health, developmental delays, and lower academic
achievement. In my home state of California, despite having the
sixth largest economy in the world, one in five children are
living in poverty. That is nearly two million children. That
means children struggling to learn because they have hungry
bellies or who aren't getting the rest they need because they
do not have a safe place to sleep every night.
Unfortunately, income thresholds used to measure poverty in
the United States remain much too low. So many households with
children with incomes that greatly exceed the poverty line
still experience significant financial insecurity and hardship.
And that is why the Supplemental Poverty Measure takes into
account expenses like taxes, child care, and out-of-pocket
medical costs, and also accounts for benefits that reduce
poverty, like Social Security and the Earned Income Tax Credit.
Of course, let us be clear. These measures remain at the
level of recommendations by the National Academy of Sciences
and are not what the title of this hearing says, that the Biden
Administration plans to redraw poverty lines, which is actually
untrue.
So, Ms. Maag, can you tell us why the SPM is important for
policy-makers, how it is used?
Can you describe how its data better reflects the lived
experiences of families with children?
And does its conclusion align with other surveys' findings
of increased material hardship over the past year?
Ms. MAAG. The official poverty measure essentially asks you
how much resources do you have before the government gets
involved. The Supplemental Poverty Measure gives you credit for
everything you did on the governmental side. So, when we see
the Supplemental Poverty Measure, it gives you credit for the
expanded Child Tax Credit, so we see poverty decline. We don't
see that in the official poverty measure, even though we know
all this money went into households, because it is not
sensitive to tax payments. Supplemental poverty accounts for
the different costs of living and allows us to better
understand whether people are able to meet their needs.
Ms. CHU. And how is it used?
Ms. MAAG. It is used merely as a gauge of how well our
government programs are doing. That is why the National Academy
panel recommended we talk about it instead of just the official
poverty measure.
Ms. CHU. So it is a supplemental way of talking about the
experiences of children.
Ms. MAAG. That is correct.
Ms. CHU. Ms. Maag, it is clear that the best way to fight
poverty is not to undermine independent data and research, but
to learn from its findings and to do what Democrats on this
committee, throughout Congress, and in the White House have
been fighting for, which is restoring the expanded CTC.
I also want to repeat that every one of us, Republicans and
Democrats, have constituents who rely on this support, and they
include people like Daisy, my constituent, who is a teacher in
Pasadena and used the monthly CTC to support her young son,
finally give him a comfortable way to live and rebuild her
savings.
So, Ms. MAAG, can you talk about why direct cash report
is--support is so effective at reducing poverty?
What did families typically buy with their CTC checks, and
how do these benefits show up in the long-term outcomes for
children who are lifted out of poverty because of benefits like
the CTC?
Ms. MAAG. Parents know what is best for their children, and
so they are able to direct the resources in ways that are most
efficient and productive.
I come from Kansas. It is hard to get to work because of
transportation systems. It is easy to find child care. Here in
D.C., child care is very expensive. And so, when you give
people a cash benefit, they are able to use the resource most
wisely.
The result is we saw improved health care, we saw reduced
debt, we saw people making investments in their children in
tutoring, saving for college, buying nutritious meals. It was
sort of a whole lifetime of benefits, depending on what your
child needed.
Ms. CHU. And let me say I am a big proponent of expanding
another powerful tool, the Earned Income Tax Credit, and
expanding the age at which you qualify for it. Can you talk
about how this credit would work with CTC to help both families
and workers not raising children?
Ms. MAAG. Yes. The CTC, of course, is concentrated in
households with children. The Earned Income Tax Credit has a
very small component for workers without qualifying children.
By expanding that, you essentially pick up a lot of low-wage
workers. It is particularly powerful in rural communities, as
well as in Black and Hispanic households.
Ms. CHU. Thank you.
I yield back.
Chairman LaHOOD. Thank you. I recognize Mr. Moore of Utah.
Mr. MOORE of Utah. Thank you, Chairman.
Dr. Corinth, by your estimate, if the Administration were
to replace the official poverty measure with the Supplemental
Poverty Measure, it would increase the government's spending on
Medicaid and SNAP alone by $124 billion over the next decade.
This number would be even higher when you factor in the dozens
of other Federal and state programs that are based on the
official poverty measure. Do you have a sense for how much more
would be spent if every program that relied on this metric were
updated to reflect the recommendations by the National Academy
of Sciences?
Mr. CORINTH. Thank you, Mr. Moore, for the question.
So there are over 31 different means-tested programs that
are tied to the official poverty line, and would thus be
affected. Of those there are five entitlement programs, where
spending would necessarily rise once you increased the poverty
line. Of those five programs, Medicaid and SNAP are the two
largest, and that is why I focused on those two. But other
important ones include the ACA, Affordable Care Act, premium
tax credits; Medicare Part D low-income subsidies; and the
National School Lunch Program. All together, these 5 programs
amounted to $954 billion of spending in 2021. So this would be
a big change for these programs to increase eligibility.
Mr. MOORE of Utah. And I think, to put it in plain English,
what we have kind of heard from both arguments here is that,
yes, it costs more to live in California, and there is more--
higher costs in places like Washington, D.C., so we should
provide more money. If we do that, will that incentivize
policymakers in those areas to put in the right policy that
will reduce costs over time, the actual problem, or will it do
the opposite?
Mr. CORINTH. It would have the opposite effect. These
regulations that drive up things like housing costs or the
costs of child care are really the primary cause for why you
have more spending on things like housing and child care. If
you incentivize states to increase costs in order to get more
allocations for Federal grants, that would be a step in the
wrong direction.
We should follow the increasingly bipartisan consensus that
we need to take on the supply side, reduce regulation so we can
build more housing, and make more people able to afford basic
needs.
Mr. MOORE of Utah. Thank you.
Professor Besharov, in your testimony, you discuss some of
the background how the official poverty measure was created.
While it is not perfect, can you describe how that measure is a
useful tool to see how well families are doing in the economy?
Mr. BESHAROV. Yes, thank you for the question.
So, if you trace the official poverty measure across
recessions and demographic changes, you can see them all in the
official poverty measure. You can see the vast increase in
retirement wealth that happened to the elderly. You can see the
decline in poverty when the economy is doing well. In fact, if
you track unemployment with the official poverty measure, you
pretty much know what is going to happen to poverty.
When you add the SPM, what you are really measuring is
government spending. And that is a very valuable thing to have,
it is just not the way you keep track of how the economy is
treating low-income people. It is the way for measuring how the
government is treating low-income people, and those are two
different things.
Mr. MOORE of Utah. Would you--continuing on, Professor, is
it true that the presidential administrations regularly used
the National Academy of Sciences as the basis for updates on
how the Federal Government measures poverty?
Mr. BESHAROV. Yes, but I can't imagine a Republican or a
conservative president ever doing that again. And if I could
spend 15 seconds here----
Mr. MOORE of Utah. Please.
Mr. BESHAROV. You know, we have a president now who might--
might, might not, but might do this thing. We might have
another president who could easily change the table here with
two changes: count Medicaid benefits, which the SPM does not
do; and count Medicare benefits. You count two of those, and
you will really shift the table on who gets anti-poverty money.
And so the message here, sir, is this is not just about
Republicans versus Democrats. This is about Congress asserting
the power of the purse to protect its prerogatives.
Mr. MOORE of Utah. Thank you.
I just want to underscore the point that we are approaching
a $2 trillion deficit. We have seen that enormous amount of
monetary supply, government spending, directly impacts our
inflation, and it creates a high inflationary measure. I don't
think--that can't be rebutted, in my opinion. And, if we
continue to argue that, look, there is--costs are high, things
are expensive, we got to give more money in these programs,
like, that is just simply not going to solve the problem. It is
not going to incentivize the right type of policy.
I agree with the same concept with tuition. Like, look,
let's just kind of forgive some tuition, and then the
universities are going to drive their prices down. Like, that
is a nonsensical state--place to be.
And we have to be willing to look at how to help people,
encourage them to get out of poverty, and that is what this
whole entire committee should be focused on.
Thank you, and I yield back.
Chairman LaHOOD. Thank you, Mr. Moore. I recognize Mrs.
Steel of California.
Mrs. STEEL. Thank you, Mr. Chairman LaHood, for holding
this hearing, and thank you, all the witnesses coming today. I
am thankful to hear from these leading experts on this--as this
committee acts on these issues, and this is very important for
our future and our future generations, too.
Dr. Corinth, the National Academy of Sciences reported
certainly alarming in their suggestion to elevate the
Supplemental Poverty Measure as the nation's headline poverty
statistic. We have three leading experts on poverty measurement
testifying before our committee today, yet I see none of your
names on the list of authors of this report. Did the panel of
authors for this report include any conservative perspectives?
Mr. CORINTH. Thank you, Mrs. Steel, for the question. There
were 13 members on the National Academy of Sciences panel which
made this recommendation about the SPM. Of those 13, 12 had
either donated or worked for a Democratic administration. Zero
had donated or worked for a Republican administration. And as
you suggested, it is not for lack of supply of willing or
capable experts with differing perspectives. As you mentioned,
there are people at this table who were not asked to serve.
There are others, as well, who have the expertise, who could
have served but were not asked, and should have been.
Mrs. STEEL. So this report must be really skewed at this
point.
Mr. CORINTH. It is certainly skewed, based on the panel
members, and I don't think that it reflects the academic
consensus about poverty measurement.
Mrs. STEEL. Thank you.
Professor Besharov--if I pronounced it wrong, I am sorry.
Mr. BESHAROV. No, no, that is fine.
Mrs. STEEL. You have done a tremendous amount of research
on measuring poverty. These measurements are full of deep
statistical analysis. But, at the end of the day, deciding who
is and who isn't in poverty is a moral judgment. Do you think
it is right for unelected bureaucrats to have such power, or
the ability for one administration to make such dramatic
changes to the poverty rate?
Do you believe this should be the role of Congress to set
the poverty line?
Mr. BESHAROV. Well, as I was--thank you for the question.
As I was trying to suggest in my previous answer, we are at an
important historical point where many of the norms of the past
are changing, the norms about what a president will do or not
do without the consent of Congress. And I would put this at
that very high level of concern. It is about poverty
measurement. It is about food stamp benefits. It is about
military action.
I can think of all sorts of things that the Congress has,
in a sense, delegated great discretion to a president. And the
Congress has done that because in the past the presidents have
had guardrails. And I see that changing. I see that changing
about social policy, I see it changing about international
policy. And in terms of the poverty line, I am really worried
that it gets politicized in both directions.
And I--that is--it is one thing to say, well, let's just
see if low-income families can get a little bit more money
here. The other side of this is, if we have a President Trump--
I mean, one of the things he could very easily say is, well,
let's see how we can benefit the people who voted for me. And I
don't think that belongs in a poverty measure, either
direction. And I think the only protection for that is a
Congress. Because even the minority in the Congress can prevent
that.
So it is important that we constrain the power of the
executive, whoever that is.
Mrs. STEEL. Thank you, Professor.
Dr. Meyer, you have done a lot of research on this
Supplemental Poverty Measure. This can get very technical. But
you can explain in simple terms some of the problems with the
SPM, and how that measure can inflate and misrepresent current
poverty numbers.
Mr. MEYER. Thank you for the question, Representative
Steel. I don't have a lot of time, so let me just say that one
of the worst problems with the SPM is that you would like the
poverty measure to identify the most deprived individuals,
because that is ultimately the goal of poverty measurement. And
the Supplemental Poverty Measure, in practice, does not do a
good job of that. It does a worse job than the official poverty
measure and consumption poverty measures.
One of the reasons for it is the issue that we have been
focused on, that it would raise poverty thresholds where people
can afford to spend a lot on housing, and those areas tend to
be the areas where people are better off by a lot of
indicators, and it would cut the poverty thresholds in areas
where people are especially suffering.
Mrs. STEEL. Thank you, Dr. Meyer.
Thank you, Chairman.
Chairman LaHOOD. Thank you, Mrs. Steele. I recognize Ms.
Moore of Wisconsin.
Ms. MOORE of Wisconsin. Thank you so much, Mr. Chairman.
Thank you, Ranking Member. And I thank all of our witnesses for
their extraordinary testimony here today.
I have been listening very carefully, and I want to make
sure I understand what we are talking about here. The official
poverty level, how many of you think that the official poverty
level, where someone having--have to live off that is enough
for any size family to live on, whether it is in Mississippi or
in New York? If that were their only source of income, how many
of you think it is enough?
You, Ms. Maag.
You, Dr. Corinth.
Mr. CORINTH. Should I respond?
Ms. MOORE of Wisconsin. Yes, just very quickly.
Mr. CORINTH. So I think the reason for that is--so Congress
has tied SNAP eligibility for, say, 130 percent of the poverty
line, or ACA----
Ms. MOORE of Wisconsin. But, I mean, if someone just had
poverty-level wages, and that was all the income they had, it
is a baseline.
Mr. CORINTH. Yes.
Ms. MOORE of Wisconsin. And anything--and--but you don't
really think people can live off that, right?
Mr. CORINTH. I think that is a value judgment for you all
to make.
Ms. MOORE of Wisconsin. That is a value judgment for us to
make.
So I want to--I am very interested in this notion of
consumption. Given the examples that all of you have talked
about with the--you know, someone talked about the coastal
elites in California--I don't live there--and New York. Do
people have any choice about how the high cost of housing is?
I mean, you can be living in some rundown rent--rat-
infested tenement, or you can be homeless in Oakland,
California, and the cheapest property you could get could be
$1,300 a month. And so the poverty measure there, I understand,
is different than it would be in rural Arkansas. Does this
consumption data measurement address that, Dr. Meyer?
Mr. MEYER. As----
Ms. MOORE of Wisconsin. Would we be able to be more
equitable if we used that measurement?
Mr. MEYER. I think absolutely, we would be able to be more
equitable. It is not that there aren't people who are very
deprived everywhere in the country. This is a question of
figuring out where people are the worst off, because we want to
direct resources especially to people who are the most worst
off.
Ms. MOORE of Wisconsin. Right. We wouldn't want to skew the
data by having a measurement of, say, rural Mississippi, and
say this is the level at which we expect people in New York or
Brooklyn or Chicago--that this is the standard.
And so you are going to have too many poor people if you
raise the--just say the OPM, not even the SPM. If you just
raise--change that, you will increase--you will end up spending
$124 billion because you are going to now disclose that we have
more poor people. Isn't that really what the argument might be,
Ms. Maag, that this is a disclosure issue here?
Ms. MAAG. That is right. Consumption, we don't have
adequate data to really understand what people consume.
Moreover, people consume using credit cards, and the high-risk
payday lending, selling plasma. These aren't the marks of an
advanced society, and they certainly don't take a person's
whole well-being into account.
Ms. MOORE of Wisconsin. With regard to this--okay, go on,
Dr. Besharov, yes.
Mr. BESHAROV. So what is tricky about this is, under the
SPM, Black poverty doesn't change, Hispanic poverty goes up,
child poverty goes down, elder poverty goes up.
So all the questions you are asking are very valid. The
answer to them is the way the Congress then sets the
eligibility. It is 135 percent of the poverty line for food
stamps, SNAP; 185 for WIC. These are judgments that are made
program by program. And I think, speaking for myself only, the
concern I have is that congressional set of decisions will not
necessarily be the ones we will have in the future if they
change the poverty measure.
That is--I am not disagreeing with whatever the number is,
but the Congress keeps setting different ones, anyway, when
it----
Ms. MOORE of Wisconsin. I mean, but the thing of it is,
don't you need--don't people need more help with housing and
food?
I mean, if you live in New York--I just can't imagine
living there.
Mr. BESHAROV. And the most direct way to do it, ma'am, is
to say housing benefit is not 150--it is actually, I think, by
local costs. But the answer is not to make it 150 percent of
poverty, it is to make it 175 percent of poverty.
Ms. MOORE of Wisconsin. Sneak one more question in.
Mr. BESHAROV. Sure.
Ms. MOORE of Wisconsin. I don't know where you guys are
getting this data, other than, Mr. Hansen, you said you think
it is a setback for us to take away work requirements.
Ms. Maag, is there any data--I haven't read any literature
that demonstrates that the Child Tax Credit keeps people from
working. It is an incentive to work. All of a sudden you have
an extra $300 if you have got little bitty kids, and you can
still work without being punished or without having to hide it
or wondering if your social worker is going to catch you or
bust you. Is there any evidence that there is a decreased work
from refundable tax credits?
Ms. MAAG. Evidence from multiple studies showed that
families that received the Child Tax Credit continued to work
at the same rates as families who didn't receive the credit.
There is also evidence that people use the Child Tax Credit
to pay for work supports such as transportation and child care.
Ms. MOORE of Wisconsin. Like places like Lorain, Ohio,
which has no public transportation. I don't know how these
people get to work.
Mr. Chairman, thank you for your indulgence. I yield back.
Chairman LaHOOD. Thank you, Ms. Moore. I recognize Mr.
Smith of Nebraska.
Mr. SMITH of Nebraska. Thank you, Mr. Chairman. Certainly,
thank you to our panel. These issues, I am glad we can engage
on this and certainly hear diverse perspectives and
perspectives that I hope can lead to better outcomes.
I worry when arbitrary designations are leveled across the
country viewing one state at a time monolithically. That--I
don't like it when that happens even to Nebraska, and we are,
wow, three House seats. That is not a lot. Not to mention other
states too, that have, you know, far more, I should say, you
know, just more diverse needs across their state, across the
demographics.
And so I just am very concerned that the Federal
Government, especially without a vote of Congress,--because I
happen to think that--you take this subcommittee right here,
just us. I think we could come up with, both sides, more
appropriate designations than what this proposal seems to
outline. And it obviously gets folks in a defensive posture,
especially when there is evidence that it is not a complete
report, doesn't show a complete picture of reality. And so I
would hope that we could exercise the legislative prerogative
that we should have on this, and work together for a solution.
But, Dr. Corinth, I would like to discuss further some of
the work you have done projecting what the proposed changes
would be for various states. In addition to the chart that
Chairman LaHood discussed earlier showing how replacing the
official poverty measure with the Supplemental Poverty Measure,
SPM, would direct funding away from poor states and channel
those dollars to rich states, you also created this map here
behind me now.
[Chart]
Mr. SMITH of Nebraska. This one shows how the poverty line
would change for a family of four if SPM were elevated. How is
it that a family in California making $47,000 across the state,
or a family in Colorado making $40,000 across the state--
doesn't matter where they might live within the state--would be
considered in poverty, while the same family just across the
border from Colorado, say in my home state here--and this
corner of Colorado and this end of Nebraska, pretty similar in
terms of cost of living and--but how would you explain this,
and perhaps what you would propose instead?
Mr. CORINTH. Sure. So thank you, Mr. Smith, for the
question.
I don't think it makes sense to say that someone who has
$47,000 of income in California is somehow worse off than
someone who has $47,000 in one of those other lower-income
states. And so I think that the--this solution is to have a
constant poverty line across states. And that claim is based on
research by Dr. Meyer, which actually finds that people who are
near the poverty line in these different states, those who are
in the lower-income states, places like Mississippi and West
Virginia, are actually worse off in terms of their food
insecurity, the quality of their housing, and their health and
even mortality outcomes than those near the poverty line in
places like California.
Mr. SMITH of Nebraska. Thank you. You know, let me just
reflect back. I know that when we talk about rural issues,
rural is a different dynamic one state to another. Even within
my own district, rural looks different than, say, remote, or
what some folks would call frontier. And yet, you know, we have
been able--I know--I don't want to speak for my colleagues
necessarily, but I know we have worked together on channeling
resources to people in need.
And I think one of the best things that I want to point out
right now is that those of us on both sides of the aisle here
that care about making sure that people in need receive the
benefits that can be most helpful and most appropriate to
leading to better outcomes, that that will happen far more
appropriately with the legislative prerogative, rather than
throwing something out there from the administration that I
think will harm people in need, and that is what concerns me
greatly.
And I would hope that we can continue to focus on this.
Thank you again, Mr. Chairman. I know we have been working on
this. I had the honor of chairing this subcommittee a while
back, and focusing on what we can do most effectively to
positively impact people in need, that is what needs to be our
focus, rather than arbitrary designations. Thank you. I yield
back.
Chairman LaHOOD. Mr. Smith, thanks for your comments on
that. I now recognize Mr. Evans of Pennsylvania.
Mr. EVANS. Thank you, Mr. Chairman. Thank you to the
ranking member for your having this session. Thank you very
much.
I hope I get your name right, Ms.----
Ms. MAAG. Maag.
Mr. EVANS. Maag. I would like to start out with you. Can
you describe the impact of the CTC had on reducing financial
hardship for families?
And how did this allow families to invest in other aspects
of their children?
Ms. Maag. We did work at the Urban Institute that shows it
allowed people to pay off debts, even families with fairly high
incomes. It also reduced food insufficiency.
We did some work that was joint with other organizations
that showed it allowed families to invest in their children and
save for college.
Mr. EVANS. What does the latest research say about how
families, particularly Black and Brown families, are struggling
following the expiration of the expanded refundable tax credit?
Ms. MAAG. As soon as the Child Tax Credit payments ended,
we saw dramatic increases in food insecurity among Black and
Brown households. We know from research by Bradley Hardy that
the programs that exist today, the Earned Income Tax Credit,--
it is just not as good at addressing Black and White income
gaps as a program like the Child Tax Credit when it is fully
refundable.
Mr. EVANS. I thank you, Mr. Chairman, and I yield back.
Chairman LaHOOD. I recognize Ms. Tenney of New York.
Ms. TENNEY. I just want to say thank you, Mr. Chairman and
Ranking Member, and also thank you to all of you on the panel
and for your hard work in this really important area I think
that we are handling in Congress.
And I appreciate some of the comments addressing the many
people--I am from New York State, and I live in one of the more
rural areas, way upstate. So everyone thinks that we are all
New York City. Well, we are not. We have issues with
transportation upstate. We have issues with child care, all
those things.
And my concern--and I just want to allude a little bit
about what Mr. Smith said--is, if the National Academy of
Sciences project--I am going to actually ask Dr. Meyer this
question, because you alluded to it earlier--what could you
describe--I know this is not an easy question--some of the
failings in how the National Academy of Sciences has reported
on this poverty measurement that we are talking about with this
chart on dealing with the Supplemental Poverty Measure versus
dealing with the official poverty line, and how it will impact
states like New York, where we have this huge difference
between New York City and upstate New York.
Mr. MEYER. So the Supplemental Poverty Measure and the
National Academy of Sciences report, as Dr. Corinth has
emphasized and other panel members have emphasized, would
really shift where we say the worst off are because it relies
on what people are able to spend on housing in different areas,
even though one of the ways that people can end up spending
more on housing is they are just better off, they have more
resources, that it uses that to figure out where we should
direct resources and kind of perversely--well, more than kind
of----
Ms. TENNEY. Perversely?
Mr. MEYER. It directs more resources to where people have
lower mortality, better health, are able to spend more on food,
have higher housing quality, have higher education, have more
assets, have more long-term income if you look at their income
over many years, have more appliances. Basically, in our
research, we looked at everything that we could get our hands
on.
Ms. TENNEY. Well, let me ask a quick thing, just because--
--
Mr. MEYER. And--yes.
Ms. TENNEY [continuing]. We have among the highest Medicaid
rates per capita in the entire nation, by far.
Mr. MEYER. Yes.
Ms. TENNEY. No one is even close, not even California. I
think Alaska, maybe, because of the difficulty in navigating
the terrain there.
I mean, what is the impact? That is--that must have a huge
impact when you are talking about the SPM, or the Supplemental
Poverty Measure.
Mr. MEYER. Well, it turns out that Medicaid doesn't even
enter the Supplemental Poverty Measure. It probably should.
Ms. TENNEY. Because----
Mr. MEYER. Because----
Ms. TENNEY [continuing]. The rate is so high, though, in
terms of determining the poverty rate. So how would the--
wouldn't that exacerbate the issue that we have?
Mr. MEYER. Sure, it would make it harder for--if it were
then used to determine eligibility, it would make it harder for
people in rural New York to get on the Medicaid program,
because it would lower----
Ms. TENNEY [continuing]. The threshold.
Mr. MEYER The thresholds.
Ms. TENNEY. Right.
Mr. MEYER. So----
Ms. TENNEY. Let me ask a quick question, Mr. Hansen. I love
the work that you are doing on trying to get people back to
work. And I just wanted to ask you about, if we increase the
amount of tax credits without a work requirement, what kind of
impact is that going to have on employers?
Because, I will tell you, the number-one issue that I face
every single day in my district is that we can't find people to
go to work, and employers are willing to give bonuses, free
child care, pay 100 percent of health care. Can you tell me
what you think that would do, and if you think it is a bad idea
to remove the work requirement?
Mr. HANSEN. So, Representative, you know, what we offer
most is the training to get into those kinds of jobs, because I
bet the employers that you are talking about, generally
speaking, are talking about a higher demand in terms of jobs.
And, for the people we work with, that is a choice they have to
make.
So, in a rural community, you went to the same high school
where your parents went to and where your grandparents went to
and, you know, there is no choices along the way. But, when we
want them to take an extra step and to get more training, that
is a choice. And so incentives make a difference on the margin.
There is many for whom it doesn't, but there is very many for
whom it does.
Ms. TENNEY. But would you say that it is better to have
incentives to go to work, as opposed to incentives to stay
home?
Mr. HANSEN. Better to have incentives to go to work, yes,
absolutely.
Ms. TENNEY. Thank you. I appreciate it.
My time is out. Thank you, Mr. Chairman.
Chairman LaHOOD. Thank you. I recognize Ms. Sewell of
Alabama.
Ms. SEWELL. Thank you, Mr. Chairman. I think that I agree
with Adrian Smith about our focus being on designation. I would
really ask Ms. Maag, would you talk to us about whether or not
there is a Biden plan to actually substitute the official
poverty rate for the supplemental poverty rate?
Ms. MAAG. I have not heard or seen any evidence that there
is a move to replace the poverty rate. In fact, the report says
the SPM should be elevated as a way to show the progress that
is happening with government programs, not as a way of
determining eligibility.
It is a little bit circular, even, because the SPM would
count the benefit of the Earned Income Tax Credit or Child Tax
Credit or SNAP benefits. So you couldn't, you know, base
eligibility on that since it is endemic inside the measure.
Ms. SEWELL. Right. You know, conspiracy theories and
squabbling about the designation doesn't change the fact that--
the reality about poverty. I represent Alabama's Black Belt, a
very proud product of Alabama's rural Black Belt. But our rate
of poverty is much higher than the rate in Alabama writ large.
And the reality is that lots of the kids that I represent go to
bed hungry.
We as a committee do make choices. And I have to tell you I
am proud of the fact that during the pandemic--that the House
Democrats decided to make fully refundable the Child Tax
Credit. It cut poverty in half. This is not a statistic. I just
want to talk just about how it did it in my district.
The fact of the matter is that so many more of my
constituents had money in their pockets monthly because we paid
it monthly. And, because we made it fully refundable, there are
lots of families in my district, the working poor, who don't
pay enough, don't make enough to pay taxes. And so, by getting
that full--fully refundable, you actually brought in a whole
other swath of people who otherwise would not have been able to
get the Child Tax Credit.
Can you talk to us about whether or not the Child Tax
Credit somehow decreased rural America? Because I don't think
that is true. I actually don't think that the--somehow the
Child Tax Credit made it worse for rural America versus, you
know, versus urban. Can you talk a little bit about that?
Ms. MAAG. Sure. The evidence suggests that more--a larger
share of rural children are left out of the Child Tax Credit
today than urban children. And so, when we made the credit
fully refundable, it meant children in urban areas had equal
access to the credit.
Moreover, there is evidence that people, when they have low
incomes, they delay getting health care and they are hungry.
And what we saw during----
Ms. SEWELL. And let's talk about----
Ms. MAAG. Yes.
Ms. SEWELL.--this work requirement. I haven't seen evidence
in my district that people are incentivized when they get
Medicare and Medicaid, when they get SNAP benefits or TANF
benefits. In fact, the majority of the people who are--who
receive SNAP in my district have children under the age of 16.
So, when I think about the face of welfare or the face of SNAP
or the face of CTC, it is a child's face that I see, not some,
you know, welfare queen.
So talk to me about whether or not CTC and other anti-
poverty measures actually discourage work. Do you believe that,
and do statistics show that?
Ms. MAAG. The research at the Urban Institute suggests
that, no, it does not discourage work.
There has been some evidence that sometimes people would--a
secondary earner might stay home with their child. You might
see families with very young children more likely to stay home.
Ms. SEWELL. But that has a lot to do with the fact that
child care costs are so high.
Ms. MAAG. Exactly. And a lot of people would say in some
circumstances it is good.
The Bipartisan Policy Center recently released a report.
They said that estimates that suggested that there was a large
disincentive to work were overstated. They were anomalies in
the data, and they weren't what the majority of studies were
showing.
Ms. SEWELL. I think that, Mr. Chairman, before I yield
back, I just want to say that instead of focusing on
designations that may or may not come, I really would hope that
this committee would try to find some solutions to deal with
the reality of poverty that is in America. The greatest country
in the world should not have as many children who are poor and
in poverty and people who are in poverty. And I would like to
work on better incentives to create skilled labor and provide
people an opportunity here.
People don't want a hand--my--I can only speak for my
district, but people in my district, the vast majority, they
don't want a hand out, they want a hand up. And this committee
can provide that. Thank you. I yield back the balance of my
time.
Chairman LaHOOD. Thank you, Ms. Sewell. Your comments are
well-taken, and I look forward to working with you on that. I
recognize Mr. Beyer from Virginia.
Mr. BEYER. Thank you, Mr. Chairman, very much, and thank
all of you for being here. I am--again with you, Mr. Chairman,
and my friend, Ms. Sewell, I am very impressed that everyone
here cares about this deeply, and that it affects every one of
our districts. Even--I have one of the wealthiest districts in
the country, Northern Virginia, and yet there are huge pockets
of poverty. You know, the schools in Mason district, 90 percent
are--those kids are title 1.
And I am a little confused about the hearing if it turns
out the Biden Administration is not actually planning to apply
the Supplemental Poverty Measure. That should be a relief to
everyone here.
And on the--on this notion of the incentive to go to work,
the incentive to stay home, I was privileged to have my mom
stay home and raise the six kids. You know, I do think that the
Child Tax Credit, by definition, goes to parents, mostly
mothers and those people who would drop out of the workforce to
stay home and take care of their kids.
I think we have to recognize that there is a balance there
between the enormous advantages to having a mother stay home,
raising her children, versus a mom that is rolling in at 6:30
at night, exhausted, and the kids are latchkey kids, et cetera,
et cetera. And we--as we push for work requirements, I think we
miss out on the challenge of having one-parent families, no-
parent families, families where the parents aren't around at
all.
Ms. Maag, you mentioned the cost of child poverty between
$500 billion and $1 trillion, largely due to lost productivity.
And there are lots of several key programs which we talked
about. One I wanted to focus on particularly SNAP, because we
are redoing the five-year agriculture bill. There have been a
number of Republican amendments already to make SNAP benefits
ever harder to access. Five or six times a year, I will work
the food banks in Northern Virginia, and the lines are
sometimes--you can't see the end of the line, especially down
near Fort Belvoir, where--those are mostly soldiers and their
families standing in line.
How important is it for us to look at things like SNAP as
part of the overall addressing poverty in a meaningful way?
Ms. MAAG. Research we did at the Urban Institute suggests
that these programs are interconnected, and so we ought to be
supporting the whole child. Analysis showed that if we gave
better access to SNAP, maybe increasing teen benefits,
increasing per-child benefit in the summer, and increasing
overall allotment can substantially reduce poverty.
Mr. BEYER. Yes. Let me also just--I am not sure who to ask
this question to, but Ms. Maag, let me just stick with you. It
seems to me, from a poverty perspective, the real challenge we
have is that people make too little money, that you have an
awful lot of people working full-time.
I spent a lot of time in southwest Virginia, where there
are a lot of jobs, and there are jobs that are all going
begging, and--but they all pay $7.25 an hour, and we are
pushing them up to--some to $8 and $9. And how do you ever
raise a family on that, or not be dependent on government
transfer payments?
I had the extraordinary privilege of being U.S. ambassador
to Switzerland for four years, where there was virtually no
poverty. You know, the embassy Marines always had the Toys for
Tots program. They stopped it because they couldn't find any
kids to give it to. But when I left in 2013, the minimum wage
was $48,000 a year.
So, my Republican friends, reasonably, hate the transfer
payments, you know, taking from the wealthy and giving to the
poor, and it is a great source of structural discord in our
country. What if you didn't have to have transfer payments
because we paid people a living wage? And we stay away from all
that too much, but--Ms. Maag.
Ms. MAAG. If jobs pay enough and they allow people to cover
their child care costs and their basic needs, then people are
more able to go to those jobs to work. So it is a--it is
absolutely a way to lift people out of poverty. And
interestingly, it would lift you out of both SPM poverty and
OPM poverty if you had higher earnings in your household.
Mr. BEYER. Yes, and I think it is also really important to
note there is a--again--a study last week that the average
Fortune 500 CEO makes 399 times the average income of his other
employees--not the least paid, but the average of the rest of
his employees. The money is there, the resources are there, we
are an extraordinarily wealthy nation, but they tend to be
concentrated in a few places and not shared with the vast
majority of the people that we really care about.
Mr. Chairman, I yield back.
Chairman LaHOOD. Thank you, Mr. Beyer, for your comments.
That concludes our questions and answers, and I want to
thank my colleagues on both sides of the aisle for the very
substantive and comprehensive questions and dialogue and
conversation today. And, obviously, I want to thank our five
witnesses here today for your valuable testimony and for adding
to the conversation that we are having here today.
As we have seen, changing the nation's official poverty
measure would have profound implications on how Federal
assistance is distributed to millions of Americans across the
country. And I hope, with the dialogue we had here today, we
can work together in a bipartisan way to ensure Congress is the
final arbitrator of the setting eligibility for vital programs
we create for Americans most in need.
Please be advised that members will have two weeks to
submit written questions to be answered later in writing. Those
questions and your answers will be made part of the formal
record.
With that, the committee stands adjourned.
[Whereupon, at 3:52 p.m., the subcommittee was adjourned.]
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