By Alex González
10 May 2019
The Trump administration
released May 6 a proposal to change the way the official poverty rate is
calculated. The move would involve altering the inflation formula so the
poverty level increases at a slower rate, giving the artificial appearance that
fewer people are poor. Major social programs, including Medicaid and food
stamps, rely on the poverty rate to determine eligibility for benefits.
The proposal would be
devastating for millions of people. More than 20 percent of the US
population—some 52 million people—participated in means-tested programs in
2012, according to the Census Bureau. The change would gradually push millions
off the rolls of government programs, intensifying the poverty and social
misery of those denied already inadequate social assistance.
The proposed change was
outlined by the Office of Management and Budget (OMB), under the direction of
self-proclaimed “deficit hawk” and current acting White House Chief of Staff
Mick Mulvaney. Having previously advocated slashing entitlement programs like
Medicare and Social Security, Mulvaney is one of many Trump appointees setting
policy for programs that they actually wish to destroy.
The OMB proposal calls for
changing the government’s inflation formula to a so-called “chained consumer
price index.” The “chained CPI” assumes that consumers substitute items that
they usually buy with cheaper alternatives when prices rise. However, critics
point out that, due to higher prices set by monopolies, individuals are not
easily able to substitute many essential goods, such as transportation,
healthcare, child care and housing.
The poverty line is adjusted
each year to account for the consumer price index. The chained CPI would
reflect slower inflation growth and therefore lead to fewer people being
categorized as poor. The effects would be particularly dire for the elderly,
because they are disproportionate users of healthcare, whose cost has typically
risen much faster than prices overall.
The current poverty rate is
already severely underestimated. The official poverty line was set in the 1960s
as three times the cost of a basic diet, based on research showing that
families spent about one third of their incomes on food. Now, however, families
spend only about one seventh of their income of food and the rest on other
basic necessities that are not sufficiently taken into consideration when
determining who can receive social assistance.
A study by the National Center
for Children in Poverty at Columbia University revealed that on average, a
family of four would require double the official federal poverty
level to make ends meet. Last year, the poverty level for a family of four was
just $25,900.
While criticizing the outdated
nature of the poverty-rate formula, the Trump administration is not looking to
update it scientifically to reflect modern spending habits and allocate
government resources more fairly and efficiently. Rather, it seeks to rig the
rate artificially as a means of gutting social programs, enabling it to divert
resources towards militarism, attacks on immigrants, and tax breaks for the
rich.
This proposal is just the
latest of Trump’s assaults on social programs. Trump’s proposed budget for the
next fiscal year would impose the biggest cuts in Medicaid and Medicare in
history, nearly $2 trillion over 10 years. Medicaid would be turned into a
block grant for states, and the expansion of Medicaid under Obamacare would be repealed,
leading to more than 10 million people losing healthcare. Trump’s fiscal year
2019 budget proposed cutting the budget for the Supplemental Nutrition
Assistance Program (SNAP), commonly referred to as food stamps, by nearly 30
percent over 10 years.
In July of last year, the
White House Council of Economic Advisors (CEA) declared that the “War on
Poverty is largely over” and recommended implementing work requirements for
non-cash government programs. Flying in the face of reality, the CEA declared that
America no longer had “poverty” or “homelessness.”
On April of last year, Trump
signed an executive order dictating that departments throughout his cabinet
review which programs had work requirements affiliated with benefits. He
instructed that programs lacking these requirements be either eliminated or
consolidated, except when doing so would go against the law.
Trump’s tax bill, passed in
December 2017 with no serious opposition from the Democratic Party, granted a
windfall to the financial elite at an estimated cost of $1.5 trillion, creating
conditions where social programs would be purposefully underfunded so they
could be better attacked and dismantled.
The gutting of social programs
was not initiated by Trump, but is bipartisan in nature. It was Obama who tried
to introduce the chained CPI for federal programs in 2014. The move, which was
eventually dropped due to popular opposition, would have cut Social Security
payments by $130 billion and federal workers’ retirement benefits by $35
billion over 10 years. Obama’s 2012 fiscal year budget included $320 billion in
Medicare and Medicaid cuts over 10 years.
In every country, the working
class is coming under assault by a rapacious ruling class set on clawing back
concessions fought for through sweat and blood by the working class throughout
the 20th century. The attack on social program is a class response by the
financial elite, who wish to solve their insoluble crisis by means of
authoritarianism and war. The gargantuan $750 billion available to US imperialism
to launch full-blown war abroad necessarily requires vicious attacks on the
living standards and social benefits of working people at home.
The defense of social
programs, the fight against war, and the struggle to reorganize social life on
a scientific and democratic basis requires a break with the Democrats and the
Republicans—both reactionary parties of the rich—and taking up the fight for socialism.
