President Donald Trump wants to change how the federal government calculates the official poverty line, a vague proposal that’s raising fears among advocates for low-income people in Hawaii that fewer people might be eligible for key public programs like food stamps and Medicaid.
The federal Office of Management and Budget solicited feedback in May on how the federal government calculates inflation for the federal poverty line. The public comment period ended last month and the proposal is still pending.
The Trump administration’s proposal doesn’t indicate how exactly inflation calculations could change. But many critics believe the notice signals an effort to move away from the consumer price index to other ways of calculating inflation that would grow the poverty threshold more slowly over time.
It’s a subtle difference with big implications. National advocacy groups for low-income people say the change would effectively mean one million fewer people will be eligible for federal benefit programs over the next decade. Bloomberg reported, “The possible change appears to be the latest effort by the Trump administration to make it harder to access welfare programs.”
A person sleeps inside of a tent along Beretania Street in Honolulu, which has some of the highest housing costs in the nation.
Cory Lum/Civil Beat
The federal poverty line is important in part because it’s used to determine eligibility for a host of federal programs, such as Medicaid and food stamps.
Hawaii Attorney General Clare Connors joined a coalition of 21 attorneys general to oppose changing the definition of the federal poverty line.
“OMB has not sufficiently justified these proposed changes,” she said in a press release last week. “If enacted, the proposed changes would negatively impact members of our community who rely the most upon a wide range of federal and state programs.”
Already, many Hawaii residents who are struggling aren’t eligible for food stamps and other programs because their income falls above the threshold, which doesn’t take into account Hawaii’s cost of living.
The nonprofit, which advocates on behalf of low-income people, submitted comments raising concerns about the proposal. Woo believes the local impacts will be significant.
“Especially in Hawaii it makes no sense because it seems pretty clear that the official poverty level in Hawaii doesn’t reflect how people are faring here,” she said.
Hawaii is already at a disadvantage when it comes to federal programs that rely on the official poverty line for eligibility due to the state’s high cost of living. The state’s official poverty income for a family of four in 2019 is $29,620, slightly higher than $25,750 used in the 48 contiguous states.
But $29,620 is still far less than the amount of money needed to live in Hawaii once you take into account rent, food and other necessities. The nonprofit Aloha United Way calculated a single person needs $28,128 to make ends meet in Hawaii, while a family of four needs $72,336 to survive in Hawaii in part due to the high cost of housing.
The formula for the official poverty line was determined in the 1960s based on assumptions about a family food budget. Or as Vox reported, “The way we measure poverty is based on a 58-year-old analysis of 64-year-old data on food consumption, with no changes other than adjusting the poverty line for inflation.”
One problem is that since then, housing has become a significant cost and that’s not reflected in the official poverty line, says Becky Stotzer, a professor at the University of Hawaii Myron B. Thompson School of Social Work. The median family home in Honolulu was $770,000 in May, compared to $308,000 nationally in the same month.
“The poverty line is already far far below what it takes for most families to live sustainability,” Stotzer said. “In Hawaii, it is catastrophically low.”
There is a separate calculation called the supplemental poverty rate, which takes into account the cost of living. In Hawaii, the supplemental poverty rate was 15% in 2015-2017, the 10th highest in nation.
But federal programs generally rely on the official poverty rate instead of the supplemental poverty rate when determining program eligibility.
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