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CCN Archives 2000   ·   CCN Archives 2001

Archives               Volume 1  No. 7          September 2000

In this issue:

Poverty guidelines were not intended to become the official government measurement of poverty

Whose man were you, Al Gore?

Time to end the drug war?

 Poverty guidelines were not intended to become the official government measurement of poverty

A half century ago, the 1946 edition of the Funk & Wagnalls dictionary said, “Poverty denotes a condition below that of easy, comfortable living; privation denotes a condition of painful lack of what is useful or desirable.”  What we now have is an official poverty classification in which a family in easy, comfortable living may be considered “poor”, while another family in painful lack of essentials will not considered poor because they earn a few dollars more per year.

The official poverty line originated in the Social Security Administration when Mollie Orshansky, an economist, developed poverty thresholds for different sizes of families.  She wanted to measure poverty in a way that would help a group she knew was particularly needy--children in one-parent households.

Having worked in the Department of Agriculture's Bureau of Home Economics and Nutrition before moving to the Social Security Administration, Mollie Orshansky brought a professional woman's perspective of  household  management to the task of assessing poverty. Starting with the idea that being poor means not having enough money to raise children adequately, she used the Department of Agriculture's budgets for nutritious diets as the basis of her measure.  She calculated for different size families how much money was required to provide an adequate diet, and because the studies she looked at showed that the average family spent about one-third of its income on food, she multiplied the required food budget by three to arrive at a poverty threshold.

Mollie Orshansky was able to show what she called, "segregation of the pocketbook" and that certain types of families, and most especially, single-mom families, were far less likely to be able to provide adequately for themselves.
Using 1963 as the base year, Orshansky calculated that a family of two adults and two children spent about $1,033 for food. To estimate how much money this family spent for housing, clothing, transportation and other basic needs, she turned to the most recent study available, a 1955 USDA survey that found typical families spent one-third of their after tax income on food.

So, she multiplied the cost of the USDA economy food budget ($1,033) by three to arrive at $3,100 as the minimum yearly income a family of four needed to get by.  This became the poverty guideline for a family of four.  Any family whose annual income before taxes fell below $3,100 was poor.

The guidelines have been updated each year to take inflation into account.  Thus, the year 2000 guideline of $17,050 for a family of four is intended to represent the same purchasing power as the 1963 guideline of $3,100 for a family of four.

Although she frankly called them her "crude indexes of poverty," she provided a yardstick for measuring poverty that became the standard for federal, state and local government agencies.  In July, 1963, she published an analysis of poverty titled, "Children of the Poor."  Her concept was included in the 1964 Economic Report of the President and was used by President Johnson to justify the “Great Society” and  its “War on Poverty”. The Office of  Economic Opportunity used her measure for program planning and budgeting.  The Justice Department used it to defend the 1965 Voting Rights Act by showing that even a small poll tax could deprive poor families of adequate food.

Although Orshansky's poverty guidelines were not intended to become the official government measurement of poverty, they were given official status throughout the federal government in 1969, when the Bureau of the Budget ordered that the entire federal statistical establishment adopt the Orshansky measure.  Since then, essentially all state and local governments use her measurement of poverty as their basis for providing benefits.  (Ironically, welfare programs such as Aid to Families with Dependent Children; its new replacement, Temporary Assistance for Needy Families; and Supplemental Security Income do not use the poverty guidelines in determining eligibility.  The Earned Income Tax Credit program, which supposedly is to benefit the poor, also does not use the poverty guidelines to determine eligibility.)

At that time, Social Security administrators and others estimated that the guidelines would be useful for five to ten years at most before they would need to be revised to reflect changing prices, standards of living and  family spending.  However, although a few changes have been  made, they remain largely intact.  This formula was never revised, updated or reexamined.  Instead, every year the Office of Management and Budget simply increases the previous year's poverty threshold by the rate of inflation.

The existing official measure of poverty has been widely criticized.  The U.S. Census says research shows the Census income data do not tell us very much about poverty, because they are based on income rather than consumption.  Consumption is more indicative of true standards of living. For instance, among families defined as poor by the Census, 41 percent own their own homes; 70 percent own one car and 27 percent own two or more cars; 97 percent have color TVs; and three-fourths own VCRs.  Based on ownership of microwave ovens, dishwashers and other consumer durables, inequality has  fallen rather than risen, Federal Reserve Chairman Alan Greenspan argued in an August 28, 1998, speech.

The U.S. Census Bureau uses a set of money income thresholds that vary by family size and composition to detect who is “poor”.  If a family's total income is less than that family's threshold, then that family, and every individual in it, is considered poor.  The poverty thresholds have no geographic distinction: They are the same for Washington State and Washington, D.C.; for Augusta, Arkansas and Augusta, Maine; and for Orange County, Florida and Orange County, California.  Their only adjustment is that they are updated annually for inflation using the Consumer Price Index.

Only cash income is counted in determining whether a family is poor. Cash welfare programs count, but benefits from non cash programs, such as food stamps, medical care, social services, education and training, and housing don't count, even though obviously a family with those benefits is in less privation than another family without them. Taxes paid by a family and tax credits paid to a family (such as the Earned Income Credit) are also excluded from poverty calculations. Because government spending on non cash benefits and tax credits has increased more rapidly than spending on cash benefits over the years, ignoring non cash benefits is an increasingly serious omission.

The official poverty definition counts money income before taxes but does not include income received from capital gains or non cash benefits. Capital gains are profits on the sale of assets, so a family which had just sold their house or stock portfolio and had $200,000 in the bank after paying off their debts would still be in “poverty” if their current incomes were under the guideline amount.

A family of four with a cash income of $17,050 which pays no rent because they get public housing, has no health bills because they get Medicaid, and have little or no food costs because they get food stamps will be considered to be in poverty, but a family of four with an income of $17,060 which pays their own rent, pays their own health care, and pays for their own food will not be considered in poverty even though they obviously will be in severe financial difficulties and the technically “poor” family will not .

Finally, poverty is not defined for people living in military barracks or in institutions, or for foster children.  They are excluded from the poverty universe--that is, they are considered neither “poor” nor “non poor.” There is no universal administrative definition of "income" that is valid for all programs that use the poverty guidelines.  The office or organization that administers a particular program or activity is responsible for making decisions about the definition of "income" used by that program to the extent that the definition is not already contained in legislation or regulations.

One of the first health care programs to use the Federal Poverty Guidelines was the Hill-Burton Free Care Program.  In 1946, Congress passed the Hospital Survey and Construction Act, and because it was sponsored by Senators Lister Hill and Harold Burton, it is known as the Hill-Burton Act.  Originally designed to provide Federal grants to modernize hospitals which had become obsolete during the Great Depression and World War II (1929 to 1945), the program has grown over time to address other needs.  Since 1946, more than $4.6 billion in Hill-Burton grant funds as well as $1.5 billion in loans have aided nearly 6,800 health care facilities in over 4,000 communities.  In return for accepting these Federal tax dollars, health care facilities agreed to provide free or reduced charge medical services to persons unable to pay.

All health facilities which received grants, loans or loan guarantees for construction, modernization, or equipment under the  Act, are obligated to  provide annually a minimum dollar volume of uncompensated services which is the lesser of:  1) 10 percent of the Federal assistance they received, adjusted for inflation; or 2) three percent of their annual operating costs, minus Medicare or Medicaid reimbursement.

Each facility must prepare and distribute notice to each person who is seeking care stating that the facility is required by law to provide a reasonable amount of care without charge or below charge to people who cannot afford care.  Eligibility is not based on citizenship or residency status.

A request for reduced or uncompensated services may be made at any time - before, during, or after services are received, including after institution of a collection action.  The Federal Poverty Guidelines are used as the measure of whether free or reduced services are granted. Facilities must provide free services to persons with incomes up to the poverty level (Category A, $17,050 for a family of four).  At a facility's option, it may provide free or reduced cost services to persons with incomes at the Category B level  (up to two times the Poverty Guidelines, $34,100 for a family of four) and at the Category C level (up to three times the Guidelines, $51,150 for a family of four).  Category C only applies to nursing homes.

The poor, Christ said, will always be with us.  And the care of the poor was entrusted to the Church, not to the government.  No government poverty program stretching across five time zones and fifty states from the Arctic Ocean to the Gulf of Mexico can be expected to accomplish the job intended for the churches  whose steeples rise above every hamlet and village, and whose cornerstones mark every block of each town and city.

When we have more effective churches, we will have less ineffective government.

Works Sheet or Chart

SOURCE: Federal Register, Vol. 65, No. 31, February 15, 2000, pp. 7555-7557.

J. Michael Sharman

 Whose man were you, Al Gore?

Vice President Gore is now reintroducing himself to the American people in an attempt to distance himself from the person that selected him for Vice President, the only impeached President, Bill Clinton.
Americans are now asked to see Al Gore, not as the wooden man who willingly stood in the shadow of Clinton glory supporting questionable values and actions but as an honest, family man dedicated to the people of the United States.  This newly created Gore is a brave and strong white knight to carry the American banner for the people and family values.
Not that many months ago, Gore shoulder to shoulder with a lying Bill Clinton fending off questions about the adulterous Monica scandal and impeachment issues. Supporting in his stance, the unfaithful actions of Bill Clinton.   
Today, Al Gore tries to remake himself and shed his image as Clinton's puppet.  He attempts to escape his association the bawdy, scandal ridden Clinton administration.  Al Gore wants to pretend he was never in the Clinton limelight in which he languished for eight long years, where he stood in empty-headed obedience relishing in the overflow of the Clinton spotlight.
In the Democratic Convention speech Gore stated, "I stand here before you tonight as my own man and I want you to know me for who I truly am."  Many questions should haunt voters as Gore proclaims his dedication to the American people with warmed over unkept promises from the Clinton era.  Questions like, whose man were you during the eight-year reign of immorality of the Clinton administration?  Who or what purchased your loyalty during questionable fund raising events.  Was that loyalty so firmly rooted that you, Mr. Vice President, could not even be your own man?  And more importantly, is that loyalty so embedded in your being that even today, you might not yet be your own man. A man that cannot think except in terms of Bill Clinton wishes.
If, in your own words, you were not your own man for eight years, but a controlled puppet of Bill Clinton, how can you expect people to accept that such a weak character could magically evolve into a sudden dynamic leader.  
A person can change his actions.   He cannot change his character.  The character is one of the features that distinguish an other words; your character is what you are.  
Americans currently see a facade of the real Al Gore.  This newly invented Allegory rolls his sleeves up in a manner meant to proclaim that he is a hardworking common man (The term allegory, according to Webster's New Collegiate Dictionary, is merely  " a symbolic representation.")  Picture the New Al Gore as he smiles on cue, waves his arms enthusiastically and kisses his wife in public to look more human and recall the elm headed Al Gore smiling behind Bill Clinton for the last eight years.
Al Gore can act differently but when you remove the window dressing he is simply the number one sheep in the bleating ones that follow Bill Clinton.
Al Gore does not need to introduce himself to the people.  They already know him for who he is...and what he is.  

J. Dori Callahan

 Time to end the drug war?

The phony drug war has failed.  In spite of some encouraging news from time to time overall drug use has not decreased. According to a Public Radio International report the other day about five millions of Americans are "hard core" illegal drug users. But most Americans are not, and growing numbers resent being treated as potential criminals by a government that shrinks our privacy and freedom. It hasn't hurt the international drug cartels.  If there is a victor in this sham war it is the government itself which has grown in power and scope.

It is time to count the cost. Should we go all out and actually try to win  the drug war (if possible) -- or give it up as hopeless and destructive of  liberty. Only a policy that returns us to constitutional government and  public order is acceptable. Problems come and go but the Constitution is supposed to be the permanent protector of our freedoms.

Paraphrasing Benjamin Franklin: Those trashing the Constitution in order for temporary protection from drug crazed bad guys will end up with neither protection nor freedom as government sees us all as suspects.

But to admit defeat and abandon the so-called "war" as we did Prohibition we must accept that in a free society some evils must be tolerated. There is something here of the "wheat and tares" approach that needs to be examined.  Only totalitarianism can prevent "victimless" crime.  Some will engage in self-destructive behavior regardless, as there were still drunks under the Soviet repression. Further, in a free society unless the public is solidly behind them such efforts are doomed to failure.

On the surface it seems clear that we must protect at least the non-drug using public from the depredations of drug dealers and users--if not the users themselves.

The moral issue is much harder to answer for this touches on the idea of  "victimless" crime. Libertarians and liberals consider drug offenses to be "victimless."  Is a rich man sitting in the middle of his field and  injecting himself into oblivion of concern to society?  Our society always outlawed suicide as offensive to God's law and detrimental to man's salvation.  Is that an anachronism today when God has been pushed off the public stage?  Absent God, what is the standard for determining morality when human law now appeals only to itself and to no higher Authority   Many people do stupid, self-destructive things.  Who is to decide which dangerous "hobbies" to outlaw -- like flying ultralight aircraft and skydiving?

St. Thomas Aquinas, Middle Ages philosopher, said that civil government should be restricted to adjudicating "external" and not "internal" acts.  He held that government as an agency of force is a good and necessary means to protect weaker men's salvation— as force and fear of force may be the only thing to keep them peaceful. Government is good and necessary to prevent sinful men from committing acts of force and fraud against each other.  But  it is incompetent to judge his inner acts, a blunt instrument under even the best of circumstances -- and intolerably intrusive in Orwell's "1984" mode under today's 1960's Hippy radical leadership.

Yet such libertarian considerations are troubling. And even libertarians might agree that private domains are not beyond reach of government when public health is concerned. By all accounts illegal drugs cost the U. S. many billions in money — and, more important, millions of lives trashed.

Surely there is no "product" more despicable and injurious to public order and morals than crack cocaine and other "hard" drugs, nothing even comes close.  Doesn't the government owe it to its citizens to protect public (and private?) morals?

Gary Johnson, governor of New Mexico, saw his poll numbers plummet after he campaigned for the lowering of anti-drug expectations and even the outright legalization of marijuana.  Though many consider it to be a "slippery slope" to more serious drugs marijuana has not been implicated in perpetuation of violence against the general public, whereas people steal and kill to get money to buy the hard drugs.  But efforts to decriminalize hard drugs and allow users to get clean needles and cheap "maintenance" levels of drugs, as in Berne, Switzerland have been abandoned as miserable failures.

Should we still pursue the "war" just to show our opposition to such destructive behavior, knowing full well it doesn't work?  Prohibition  spawned a raft of federal police agencies.  But the war against the Mafia went on for a half a century until RICO statutes were passed. These same RICO statutes are now used against pro-life peaceful protesters. Innocent people have had cash and other property seized and never returned -- only on "suspicion."  Other innocents have had their houses assaulted and even some shot -- victims of mistaken identities.  All of us have lost our right to privacy to government that sees all as suspects.

Media campaigns may work where legislation would be too heavy handed.  They have been effective against drinking and driving and smoking, but not against the too low speed limits.  Contempt for authority grows when government oversteps its bounds or we use government foolishly as with Prohibition.  Media is cheap.

The drug war will not be "won" until some prominent citizen or group is falsely harmed. Then it will be decided politically as public outrage spills over into the ballot box. Until then, what will be done about drugs? Nothing.  There was an enormous usage of cocaine (then legal) at the end of the 19th century--then legal.  It just went away. I suspect that will be the "end" of America's drug problem in the 21st century.

Michael H. Smith

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