WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Committee on the Budget and a leading Democratic voice when it comes to matters of debt and deficit reduction, on Friday urged the Trump Administration to back off a proposal that would change how the government calculates the federal poverty line and result in cuts to safety-net programs like Head Start, Medicaid, food stamps, and more.

Last month, the Trump Administration signaled it was considering changing the inflation rate used to calculate the federal poverty line, which is used to determine eligibility for a wide array of health and nutrition programs, including Medicaid, the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), the Supplemental Nutrition Assistance Program (SNAP), and the National School Lunch Program. In a “solicitation of comments,” the Office of Management and Budget contemplates shifting from the Consumer Price Index for All Urban Consumers (CPI-U), to the chained Consumer Price Index (CPI) or the Personal Consumption Expenditures Price Index (PCEPI), to calculate inflation and cost-of-living adjustments –  a switch that will, over time, shrink the number of Americans eligible for these congressionally-mandated programs.

“OMB’s notice came as a surprise to many given evidence that the current inflation index may not do enough to account for the expenses that dominate lower-income households’ spending or accurately reflect changes in the costs of meeting basic needs,” wrote Sen. Warner in a letter to OMB’s chief statistician. “That official estimates of minimum living costs regularly exceed the poverty line by a significant margin only casts more doubt on the prudence and rationale of OMB’s notice.”

Sen. Warner cautioned that using chained CPI to calculate the official poverty measure would force the most vulnerable families to exclusively shoulder the financial burden of any savings that may be realized.

“Prior efforts to seriously address the deficit—including the bipartisan Senate Gang of Six, of which I was a member—recommended using chained CPI when indexing various federal benefit programs. However, it did so only as part of a comprehensive deficit reduction plan that included additional tax revenue, provided important benefit improvements for programs that serve our most vulnerable, like Supplemental Security Income (SSI), and included measures to mitigate the impact on beneficiaries of means-tested programs,” concluded Sen. Warner. “This is the opposite of the OMB proposal, which would put the burden of deficit reduction on large numbers of low-income people who would lose eligibility for, or receive less help from, life-saving programs—and comes on the heels of the $1.65 trillion in decreased revenues implemented by the Tax Cuts and Jobs Act of 2017. Accordingly, I strongly urge you to abandon consideration of this or any substantially similar proposal.”

The full text of the letter is available here and below.

Dr. Nancy Potok, Chief Statistician

Office of Management and Budget

725 17th Street NW

Washington, DC 20006

Dear Dr. Potok:

Thank you for the opportunity to comment on the Office of Management and Budget’s (OMB) notice regarding differences among various consumer price indexes and their influence on the estimation of the official poverty measure.

As you know, the OMB notice contemplates lowering the poverty line by applying a smaller cost-of-living adjustment each year, using either the chained Consumer Price Index (CPI) or the Personal Consumption Expenditures Price Index (PCEPI) in place of the Consumer Price Index for All Urban Consumers (CPI-U). OMB’s notice came as a surprise to many given evidence that the current inflation index may not do enough to account for the expenses that dominate lower-income households’ spending or accurately reflect changes in the costs of meeting basic needs. That official estimates of minimum living costs regularly exceed the poverty line by a significant margin only casts more doubt on the prudence and rationale of OMB’s notice.

Further, it would be wholly unacceptable to implement such a change without Congress’ approval. Congress has passed many pieces of legislation over the last several decades related to Medicaid, the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), the Supplemental Nutrition Assistance Program (SNAP), and the National School Lunch Program under the assumption that the poverty line would continue to be calculated under the current methodology. For example, Congress has based its decisions on Congressional Budget Office (CBO) analyses of how legislation would affect federal costs, the number of people with health insurance coverage, and other outcomes. CBO’s analyses assumed that the current poverty line methodology would remain in place. If the Administration were to move ahead, it would be setting federal program eligibility limits in these programs below the levels that Congress intended to set. 

Moreover, the OMB proposal asks those who can least afford it to exclusively shoulder the financial burden of any savings that may be realized. Prior efforts to seriously address the deficit—including the bipartisan Senate Gang of Six, of which I was a member—recommended using chained CPI when indexing various federal benefit programs. However, it did so only as part of a comprehensive deficit reduction plan that included additional tax revenue, provided important benefit improvements for programs that serve our most vulnerable, like Supplemental Security Income (SSI), and included measures to mitigate the impact on beneficiaries of means-tested programs. This is the opposite of the OMB proposal, which would put the burden of deficit reduction on large numbers of low-income people who would lose eligibility for, or receive less help from, life-saving programs—and comes on the heels of the $1.65 trillion in decreased revenues implemented by the Tax Cuts and Jobs Act of 2017. Accordingly, I strongly urge you to abandon consideration of this or any substantially similar proposal.

Thank you for your willingness to consider my comments. If you would like any additional information, please contact Lauren Marshall on my staff at Lauren_Marshall@warner.senate.gov or (202) 224-2023.

Sincerely,

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