[Federal Register Volume 85, Number 31 (Friday, February 14, 2020)]
[Notices]
[Pages 8610-8613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02858]


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OFFICE OF MANAGEMENT AND BUDGET


Request for Comment on Considerations for Additional Measures of 
Poverty

AGENCY: Office of Information and Regulatory Affairs, Office of 
Management and Budget, Executive Office of the President.

ACTION: Notice of solicitation of comments.

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SUMMARY: Office of Management and Budget (OMB) requests comment on the 
questions posed by the Interagency Technical Working Group on 
Evaluating Alternative Measures of Poverty (Working Group) to help 
inform the Working Group's recommendations on producing additional 
measures of poverty. The Working Group has developed a consensus 
interim report that details its considerations to date. The Working 
Group's interim report is summarized in the SUPPLEMENTARY INFORMATION 
section below and available in full on www.regulations.gov. The interim 
report outlines the history of poverty measurement in the U.S., 
describes the Working Group's considerations of an extended income-
based poverty measure and a consumption-based poverty measure, and 
identifies other areas worthy of future research. It also identifies 
questions for public comment, toward the goal of helping to inform the 
remaining discussions of the Working Group, and meet their charge of 
identifying whether or not to recommend to the Chief Statistician of 
the United States that one or more new measures of poverty be developed 
and published. The Working Group's interim report reflects 
considerations to date, but does not reflect recommendations or 
decisions. This interim report and the Working Group's questions are 
being published to solicit input from the public.

DATES: To ensure consideration of comments on this Notice, comments 
must be provided in writing no later than 60 days from the publication 
date of this notice. Because of delays in the receipt of regular mail 
related to security screening, respondents are encouraged to send 
comments electronically (see ADDRESSES, below).

ADDRESSES: Written comments may be addressed to: Office of the Chief 
Statistician, OMB, email [email protected], fax number 
(202) 395-7245. Comments may be sent via www.regulations.gov--a Federal 
E-Government website that allows the public to find, review, and submit 
comments on documents that agencies have published in the Federal 
Register and that are open for comment. Simply type ``OMB-2019-0007'' 
(in quotes) in the Comment or Submission search box, click Go, and 
follow the instructions for submitting comments. Comments received by 
the date specified above will be included as part of the official 
record.
    Comments submitted in response to this notice may be made available 
to the public and are subject to disclosure under the Freedom of 
Information Act. For this reason, please do not include in your 
comments information of a confidential nature, such as sensitive 
personal information or proprietary information. If you send an email 
comment, your email address will be

[[Page 8611]]

automatically captured and included as part of the comment that is 
placed in the public docket; however, www.regulations.gov does include 
the option of commenting anonymously. Please note that responses to 
this public comment request containing any routine notice about the 
confidentiality of the communication will be treated as public comments 
that may be made available to the public notwithstanding the inclusion 
of the routine notice.
    Electronic Availability: Federal Register notices are available 
electronically at www.federalregister.gov/.

FOR FURTHER INFORMATION CONTACT: For information about this request for 
comments, contact Kerrie Leslie, OMB, 9215 New Executive Office 
Building, 725 17th St. NW, Washington, DC 20503, telephone (202) 395-
1093.

SUPPLEMENTARY INFORMATION: Under the Budget and Accounting Procedures 
Act of 1950 (31 U.S.C. 1104(d)) and the Paperwork Reduction Act of 1995 
(44 U.S.C. 3504(e)), OMB is issuing a request for comment on the 
questions posed by the Interagency Technical Working Group on 
Evaluating Alternative Measures of Poverty (Working Group).
    In its role as coordinator of the Federal statistical system under 
the Paperwork Reduction Act, OMB, among other responsibilities, is 
required to ensure the system's efficiency and effectiveness. A key 
method used by OMB to achieve this responsibility is the promulgation, 
maintenance, and oversight of Government-wide principles, policies, 
standards, and guidance concerning the development, presentation, and 
dissemination of Federal statistical products. OMB's Office of the 
Chief Statistician, within the Office of Information and Regulatory 
Affairs (OIRA), relies on public comment and subject matter expertise 
across the Federal government to identify areas where existing OMB 
policies or guidance may be out of date, lacking clarity, or 
insufficient for efficient coordination of Federal statistics.
    Accordingly, OMB is seeking public comment on questions (see 
DESIRED FOCUS OF COMMENTS, below) posed by the Working Group to help 
inform the Working Group's recommendations on producing additional 
measures of poverty.

I. Background

    In 1964, President Johnson's ``War on Poverty'' increased public 
interest in poverty measures in the United States. That year, the 
Council of Economic Advisers proposed initial poverty definitions that 
defined approximately 20 percent of the population as poor and used an 
absolute standard for adjusting thresholds historically.\1\ In 1965, 
the Office of Economic Opportunity adopted a set of now basic poverty 
definitions developed by economist and statistician Mollie Orshansky, 
which were based on the cost of nutritionally adequate diet and were 
similar to those of the Council of Economic Advisers, as a working 
definition of poverty for statistical planning.\2\ In 1968, the Census 
Bureau published its first full report on the subject of poverty.\3\ 
Since 1969, these poverty estimates have been based on absolute living 
standards with adjustments to the poverty thresholds based on increases 
in the Consumer Price Index.\4\ In 1978, OMB issued Statistical Policy 
Directive No. 14 specifying the definition of poverty for statistical 
purposes.\5\ (Issuance of Statistical Policy Directives is one way in 
which OMB coordinates the decentralized U.S. Federal statistical 
system. These Directives are issued when a system-wide need has been 
identified to ensure consistent statistical standards and guidelines 
are used across the decentralized system.) The official poverty measure 
(OPM), as defined in OMB Statistical Policy Directive No. 14, continues 
to be produced and updated every year.
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    \1\ Council of Economic Advisers. 1964. ``The Problem of Poverty 
in America.'' In Economic Report of the President. Washington: U.S. 
Government Printing Office. Available at https://fraser.stlouisfed.org/files/docs/publications/ERP/1964/ERP_1964.pdf.
    \2\ U.S. Department of Health and Human Services. 2000. 
``Reasons for Measuring Poverty in the United States in the Context 
of Public Policy--A Historical Review: 1916-1995. Office of the 
Assistant Secretary for Planning and Evaluation. June 1. Available 
at https://aspe.hhs.gov/report/reasons-measuring-poverty-united-states-context-public-policy-historical-review-1916-1995.
    \3\ U.S. Census Bureau. 1968. ``The Extent of Poverty in the 
United States: 1959 to 1966.'' Series P-60, No. 54. May 31. 
Available at https://www2.census.gov/library/publications/1968/demographics/p60-54.pdf.
    \4\ ``Definition of Poverty for Statistical Purposes.'' Exhibit 
L. Circular No. A-46. Available at https://www.cia.gov/library/readingroom/docs/CIA-RDP86-00244R000300400009-1.pdf and U.S. Census 
Bureau. 2017. ``Office of Management and Budget (OMB) in Statistical 
Policy Directive 14 (May 1978).'' Available at https://www.census.gov/topics/income-poverty/poverty/about/history-of-the-poverty-measure/omb-stat-policy-14.html.
    \5\ U.S. Census Bureau. 2017. ``Office of Management and Budget 
(OMB) in Statistical Policy Directive 14 (May 1978).'' Available at 
https://www.census.gov/topics/income-poverty/poverty/about/history-of-the-poverty-measure/omb-stat-policy-14.html.
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    In 1992, the National Academy of Sciences (NAS) convened a Panel on 
Poverty and Family Assistance to analyze statistical issues in 
measuring and understanding poverty, particularly in the context of 
changes in the U.S. society, economy, and public policy. NAS released a 
report entitled Measuring Poverty: A New Approach in 1995.
    In 2009, OMB's Chief Statistician formed an Interagency Technical 
Working Group on Developing a Supplemental Poverty Measure (SPM 
Development Working Group). The SPM Development Working Group asked the 
Census Bureau and the Bureau of Labor Statistics to develop a 
Supplemental Poverty Measure (SPM) that could be used to improve 
understanding of the economic well-being of consumers, families, and 
households living in the U.S., and the impact of federal policies on 
poverty statistics. In 2010, the SPM Development Working Group issued a 
series of suggestions that included a resource measure that accounted 
for taxes and some in-kind benefits, with thresholds based on recent 
consumption patterns.
    In November 2011, the Census Bureau released the first SPM report, 
providing SPM estimates for 2009 and 2010. At the same time, BLS 
released SPM thresholds for reference consumer units by household 
tenure (renters, owners with mortgages, and owners without mortgages). 
From 2011 to 2019, the Census Bureau has released the SPM report with 
estimates on an annual basis, with the most recent report (September 
2019) containing 2018 estimates. BLS produced the SPM thresholds during 
this timeframe. The SPM does not replace the official poverty measure, 
and the SPM is not the measure used to estimate eligibility for 
government programs. Instead, the SPM is designed as an experimental 
measure that defines income thresholds and resources in a manner 
consistent with the 1995 NAS report. This purpose differs from that of 
the official poverty measure, and with differences in both the resource 
measure and thresholds, the two measures are not directly comparable.
    Since the issuance of the first SPM, OMB convened a separate 
interagency technical working group (SPM Implementation Working Group) 
to advise on challenges and opportunities the Census Bureau and BLS 
identify concerning data sources, estimation, survey production, and 
processing activities for development, implementation, publication, and 
improvement of the SPM.
    Currently, the SPM Implementation Working Group is reviewing 
potential changes to implement in 2021, the 10-year anniversary of the 
first SPM report. Potential changes to the SPM would be

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presented and discussed at conferences and expert meetings and posted 
on the Census Bureau's SPM website (www.census.gov/topics/income-poverty/supplemental-poverty-measure.html). The SPM Implementation 
Working Group plans to announce any potential changes in Fall 2020 that 
would be implemented in the September 2021 SPM report.
    As nearly a decade has passed since the SPM Development Working 
Group provided initial observations for the SPM, it is an opportune 
time to evaluate possible additional alternative measures of poverty 
distinct from the OPM and SPM. Recognizing the value of various poverty 
and well-being measures for informing the public and the Federal 
government, the Chief Statistician of the United States chartered the 
Interagency Technical Working Group on Evaluating Alternative Measures 
of Poverty (Working Group) in 2019. The Working Group's purpose is to 
evaluate possible alternative measures of poverty, how such measures 
might be constructed, and whether to publish those measures along with 
the measures currently being published. The Working Group includes 
career representatives from 11 Federal agencies and is chaired by OMB's 
Office of the Chief Statistician. Additional poverty measures 
recommended by the Working Group and ultimately produced by any 
government agency will not be intended to replace the OPM or the SPM. 
Additional poverty measures would not be intended for use to estimate 
eligibility for government programs. The OPM and the SPM would continue 
to be produced and updated every year.
    The Working Group developed a consensus interim report detailing 
its considerations to date. The interim report is available on 
www.regulations.gov with docket number ``OMB-2019-0007''. A final 
report is planned to be delivered to the Chief Statistician of the U.S. 
by the end of Spring 2020 that details the Working Group's set of final 
recommendations with regard to producing and publishing alternative 
measure(s).

II. Considerations of the Working Group

    In its interim report, the Working Group laid out considerations to 
date to evaluate, and potentially produce, additional alternative 
measures of poverty. OMB invites the public to read and offer comments 
on the approach described in the Working Group's interim report, which 
can be found at www.regulations.gov. OMB is especially interested in 
receiving comments on the set of questions posed by the Working Group 
outlined in the DESIRED FOCUS OF COMMENTS section below. A summary of 
the interim report follows:
    Since the establishment of the U.S. official poverty measure (OPM) 
more than fifty years ago, there has been continuing research on 
poverty measurement. Alternative estimates of poverty have been 
published for more than three decades by the Census Bureau, and in 2011 
the Census Bureau in cooperation with the Bureau of Labor Statistics 
(BLS) began publishing the Supplemental Poverty Measure (SPM). Existing 
and previous measures of poverty produced by the Federal government are 
income based and rely on surveys to capture the income data. Guidance 
issued by the Commission on Evidence-based Policymaking, National 
Academy of Sciences reports, and OMB have recommended combining 
administrative data with survey data to improve national statistics. In 
recent years, evidence has shown that there is survey misreporting of 
many income sources. Recognizing the changing landscape and that 
alternative statistics can provide useful information, the Chief 
Statistician of the United States formed the Interagency Technical 
Working Group on Evaluating Alternative Measures of Poverty (Working 
Group) to evaluate possible alternative measures of poverty, how such 
measures might be constructed, and whether to publish those measures 
along with current measures.
    To provide context for the Working Group's discussions of 
alternative measures of poverty, the interim report discusses the 
history of poverty measurement in the U.S., including the development 
and implementation of the OPM and SPM. In addition, the Working Group 
identified some of the uses of the OPM and SPM, as well as noted some 
of the known concerns with each of the measures.
    To date, the Working Group has primarily focused on single-
dimensional poverty measurement. Single-dimensional poverty measures 
have two key parts: The resource measure (such as income or 
consumption) and the thresholds (the cutoffs to which the resource 
measure is compared). The primary focus of the Working Group's 
discussions have been on resource measures, leaving discussion of 
thresholds for future months.
    The Working Group is considering both extended income-based and 
consumption-based resource measures, as well as identifying other areas 
worthy of future research by the Federal Statistical System. For an 
extended income resource measure, the Working Group is considering 
expanding beyond pre-tax cash income to include some in-kind transfers 
and account for taxes and tax credits, much like the SPM resource 
measure. In addition, the Working Group is considering whether and how 
to incorporate the value of health insurance benefits and implicit 
flows from non-financial assets (e.g., vehicles, owner occupied 
housing, other properties). An extended income resource measure may 
also integrate administrative data with household survey income 
information, taking advantage of recent research on the use and the 
increased availability of potentially more accurate administrative 
data. The Working Group is considering other approaches for adjusting 
survey data for misreporting as well.
    A consumption-based resource measure may more directly capture the 
resources available to a family if they record the consumption that was 
actually achieved. These measures begin by summing most categories of 
expenditures on goods and services. Certain categories of expenditures 
are often thought of as enhancing future consumption and are typically 
excluded, such as pension contributions and education expenses. Health 
expenditures are less uniformly excluded, since they have both 
substantial investment and immediate consumption features. A flow of 
consumption resources is also typically attributed to some owned 
durable goods, in particular vehicles and owner-occupied homes.
    Any final recommendation ultimately made by the Working Group would 
also consider implementation issues with, as well as other advantages 
and limitations of, proposed measures. The Working Group has discussed 
many implementation issues to date, including the choice of survey data 
(for example, choosing between the Current Population Survey Annual 
Social and Economic Supplement or the American Community Survey) most 
appropriate for use in developing the measure, which would have an 
effect on the ability to produce estimates at different geographic 
levels, for example. In addition, the Working Group has identified some 
advantages and limitations of extended income- and consumption-based 
resource measures. For example, for an income-based resource measure, 
annual income will not capture the standard of living of individuals 
who draw upon savings or borrow to fund their consumption. However, an 
income-based resource measure captures a household's command over 
resources, and household income data are available in

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more datasets than a household's expenditures.
    While the Working Group has not discussed thresholds in depth, the 
Working Group acknowledges that poverty thresholds are a key component 
of a poverty measure. Individuals with resources that fall below the 
poverty threshold are counted as poor, and individuals with resources 
at or above the poverty threshold are not counted as poor. The Working 
Group has identified several key considerations for setting poverty 
thresholds, and plans to discuss each of those considerations in the 
coming months, as well as other concepts related to thresholds.
    Finally, while the Working Group is focused on the extended income-
based and consumption-based measures, the Working Group has also 
identified other topics worthy of further research by the Federal 
Statistical System. These topics include multi-dimensional poverty 
measurement and individual indicators of well-being, and populations 
such as those experiencing homelessness that are not included in the 
surveys on which the Working Group has focused.

Desired Focus of Comments

    OMB is particularly interested in receiving comments on the 
questions posed by the Working Group. To be most useful to the Working 
Group in their ongoing deliberations and ultimately to OMB in reviewing 
the Working Group's final recommendations, responders should read the 
Working Group's interim report before addressing the posed questions. 
Responses should be concise, include citations if summarizing or 
depending on published work, and any links to related research. In 
addition, responses should clearly identify which question is being 
addressed.
    Questions posed below are those the Working Group deemed most 
significant and relevant to the Working Group's remaining discussions. 
The questions have been sorted into broad categories for ease of 
review. In addition, a pointer to related discussion within the interim 
report follows each question. The Working Group's interim report titled 
``Interim Report of the Interagency Technical Working Group on 
Alternative Poverty Measures'' is available as a supplemental document 
on www.regulations.gov in docket number ``OMB-2019-0007''.

Definitions

    1. How should a sharing unit be defined? A sharing unit is meant to 
reflect the set of people sharing resources in a household. (See 
Adjusting for different sharing unit sizes.)

Resource Measures

    2. What standards should the group use to determine which resource 
measures should be preferred? Specifically, to what extent should the 
group consider the following standards: (i) Association with other 
measures of material hardship, (ii) conceptual advantages, (iii) 
simplicity, (iv) feasibility (including data availability), (v) 
reproducibility? (See Advantages/Disadvantages of Income and 
Consumption Resource Measures. See also Multi-Dimensional Poverty 
Measurement and Individual Indicators of Well-Being.)
    3. Should the value of health insurance be incorporated? And if so, 
how? (See Alternative versions of income measures with different values 
of health insurance.)
    4. Should the value of education be incorporated? And if so, how? 
(See Treatment of Education.)

For a Potential Income Resource Measure

    5. What income sources should be included (aside from health 
insurance, which is addressed by question 3)? If so, how? (See Income 
Measures Using the CPS ASEC and American Community Survey.)
    6. What expenses, if any, should be subtracted from income? For 
example, how should medical out of pocket (MOOP) expenditures be 
treated in a new measure? Should other expenses such as childcare and 
commuting costs be subtracted? (See Income should be defined more 
broadly than pre-tax cash income currently used for the OPM.)
    7. How should the Working Group address the problem of survey 
misreporting of income in household surveys? (See Correcting Survey 
Data for Misreporting and Improving Tax Estimates.)

For a Potential Consumption Resource Measure

    8. What types of spending should be included as consumption (aside 
from spending on health care or insurance, which is addressed by 
question 3)? If so, how? (See Consumption Measures Using the Consumer 
Expenditure Interview Survey.)
    9. How should vehicles and housing be included? (See Consumption 
Measures Using the Consumer Expenditure Interview Survey.)
    10. How should the Working Group address the problem of survey 
misreporting of consumption in household surveys? Should the group 
consider using only those types of consumption that are reported with 
greater accuracy, while excluding less accurately measured types of 
consumption? What are the tradeoffs in using only well-measured 
consumption versus full consumption? (See Accounting for Expenditure 
Misreporting.)

Thresholds

    11. How should the thresholds be set initially? (See Setting 
poverty thresholds in a baseline year.)
    12. How should they be updated over time? (See Adjusting poverty 
thresholds over time.)
    13. Should thresholds be adjusted for geographic areas? If so, how? 
(See Adjusting poverty thresholds across geographic areas.)
    14. How should a sharing unit's size and composition be accounted 
for? (See Adjusting for different sharing unit sizes.)
    Thank you for your thoughts on these and other important questions 
associated with the Working Group's discussion of Alternative Measures 
of Poverty. OMB and the Working Group look forward to your insights and 
feedback.

Paul J. Ray,
Administrator, Office of Information and Regulatory Affairs.
[FR Doc. 2020-02858 Filed 2-13-20; 8:45 am]
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