New Census data raise number of poor to 49 million

WASHINGTON Mon Nov 7, 2011 3:27pm EST

People receive items from a food bank in Gary, Indiana March 31, 2011.  REUTERS/Eric Thayer

People receive items from a food bank in Gary, Indiana March 31, 2011.

Credit: Reuters/Eric Thayer

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WASHINGTON (Reuters) - The number of poor Americans hit a record 49 million in 2010, or 16 percent, according to new data released on Monday that showed poverty rates for the elderly, Asians and Hispanics higher than previously known.

The figures were calculated by the Census Bureau under a broad new measure intended to supplement the official standard with a fuller picture of poverty in the United States. Results contrast with official poverty data, released in September, that put the number of poor Americans at 46.2 million.

The biggest rise occurred among people aged 65 and older who are being driven into poverty by out-of-pocket medical expenses, including premiums and co-pays from the federal government's Medicare program for the elderly.

The poverty rate for the elderly jumped to 15.9 percent, or a roughly 1 in 6 senior citizens, versus 9 percent under the official count.

The findings highlight the challenges facing Republicans and Democrats on a special congressional "super committee" charged with cutting at least $1.2 trillion from the federal budget over the next 10 years.

Both sides have proposed hundreds of billions of dollars in cuts to Medicare, which threatens to explode the U.S. debt burden, despite intensive lobbying against reductions by groups that represents beneficiaries and healthcare providers.

"People will say this shows how crucial it is not to cut a penny out of Medicare spending. And that's unfortunate, because it's an argument against solving the deficit," said Ron Haskins of the Brookings Institution.

Like the government's Social Security pension system for the elderly, Medicare is also expected to be a hot-button issue in 2012 election politics for both parties as they vie for control of the White House and Congress.

INADEQUATE SAFETY NET

Unlike the Census Bureau's official poverty measure, which focuses on the food budgets and cash wages of the poor, the new calculation includes government benefits such as food stamps as well as household expenses like taxes, medical costs, housing and regional differences in the cost of living, the Census Bureau said in a report.

It will now supplement official poverty estimates, which have been used to determine eligibility for programs that help the poor since the mid-1960s.

The broader formula generates an overall U.S. poverty rate of 16 percent, versus an official 15.1 percent, with an annual poverty income threshold of $24,343 for a family of four, compared with $22,113 under the official measure.

"This shows that the social safety net is helping but not doing as much as we'd like to see," said Dave Cooper of the Economic Policy Institute. "The programs we have right now are, if anything, inadequate."

The new formula also showed poverty rates increasing for whites, Asians and working-age adults but falling for blacks and children.

For the first time, the poverty rate for Hispanics eclipsed the rate among blacks, by 28.2 percent to 25.4 percent, partly as a result of less participation in social programs, like housing subsidies, among immigrant groups.

As an indication of the benefits of government assistance, Census officials said the poverty rate would have risen to 18 percent if not for earned income tax credit for people with low to moderate incomes.

The broader measure was developed in cooperation with the U.S. Bureau of Labor Statistics and the National Academy of Sciences, Census officials said.

(Editing by Cynthia Osterman)

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