Days 7-12

Question 1

What is absolute poverty?

Answer 1

Income below some dollar amount.

Question 2

What are the two versions of poverty measure?

Answer 2

Each year, the U.S. Census Bureau counts people in poverty with two measures. Both the official and supplemental poverty measures are based on estimates of the level of income needed to cover basic needs. Those who live in households with earnings below those incomes are considered to be in poverty.

Poverty Thresholds -

The U.S. Census Bureau determines poverty status by comparing pre-tax cash income against a threshold that is set at three times the cost of a minimum food diet in 1963

• updated annually for inflation using the Consumer Price Index
• adjusted for family size, composition, and age of householder.
• “Family” is defined by the official poverty measure as persons living together who are related by birth, marriage, or adoption.
• Thresholds do not vary geographically•(except for Alaska and Hawaii)

The threshold in United States are updated and used for statistical purposes. In 2015, in the United States, the poverty threshold for a single person under 65 was an annual income of US $11,770; the threshold for a family group of four, including two children, was US $24,250.

Poverty Guidelines -

The poverty guidelines are the other version of the federal poverty measure. They are issued each year in the Federal Register by the Department of Health and Human Services (HHS). The guidelines are a simplification of the poverty thresholds for use for administrative purposes — for instance, determining financial eligibility for certain federal programs.

Question 3

Who updates the poverty thresholds?

Answer 3

The Census Bureau updates every year.

Question 4

Who developed the poverty thresholds?

Answer 4

Developed in 1963-1964 by Mollie Orshansky of the Social Security Administration

Orshansky based her poverty thresholds on the economy food plan.

Question 5

How do poverty thresholds approximate need?

Answer 5

They vary for family size

They do NOT vary by geographic region.

They are ADJUSTED for inflation

They are based on food consumption and assume that families spend ONE THIRD of their income on food.

Question 6

How are poverty thresholds used?

Answer 6

Mainly for statistical purposes

• Preparing estimates of the number of Americans in poverty each year.
• All official poverty population figures are calculated using the poverty thresholds.

Question 7

What programs use poverty guidelines to determine program eligibility?

Answer 7

Head Start

Supplemental Nutrition Program

National School Lunch Program

Low-Income Home Energy Assistance Program

Children’s Health Insurance Program

Question 8

What does the official poverty measure take into account as far as cash benefits from the government?

Answer 8

Social Security

Unemployment Insurance (UI) benefits

Supplemental Security Income (SSI)

public assistance benefits (TANF),

Workers’ compensation benefits

Question 9

What are the means-tested cash assistance programs?

Answer 9

Temporary Assistance for Needy Families (TANF)

Supplemental Security Income (SSI)

General Assistance (GA)

Earned Income Tax Credit (EITC)

Question 10

What are means-tested, near cash assistance programs?

Answer 10

Supplemental Nutrition Program (SNAP)

Question 11

Universal services

Answer 11

Universal social services calls for social services that provide benefits to all members of society, regardless of their income or means.

Question 12

Means-tested cash programs

Answer 12

The means-tested welfare system consists of 79 federal programs providing cash, food, housing, medical care, social services, training, and targeted education aid to poor and low-income Americans.

Means-tested welfare programs differ from general government programs in two ways;

First, they provide aid exclusively to persons (or communities) with low incomes; second, individuals do not need to earn eligibility for benefits through prior fiscal contributions.

Question 13

Means-tested “near cash” or in-kind benefits

Answer 13

• These are test to help determine who gets specific benefits
• This is in addition to the general requirements
• Benefits based on income

Question 14

Entitlement

Answer 14

As long as you meet the requirements you will receive the benefits

• programs that beneficiaries have legal rights to

Question 15

in-kind

Answer 15

• Any services provided through the government programs that aren’t cash.
• Goods and services provided to beneficiaries (ex-food stamp, Medicaid, Housing assistance)

Question 16

Culture of poverty

Answer 16

• Unemployment
• Socioeconomic status
• Racism
• Lack of human capital
• Criminal history

Question 17

Mandatory spending

Answer 17

Most of this money goes towards Social Security and Medicare

• Programs that are required to receive funding, regardless of fiscal standing (Social Security, Medicare, federal share of Medicaid, SNAP, Unemployment Insurance)
• Two largest mandatory spending programs
  (Social Security and Medicare) make up about 40% of entire federal budget.
• Social security makes up more the entire federal budget.

Question 18

discretionary spending

Answer 18

Discretionary spending

• has a split between military and everything else (defense and non-defense spending)
• non-defense=education pell grant, WIC, low income housing assistance, foreign aid, transportation; environment; changes each year for the fiscal year
• spending on these programs are subject to annual changes in levels of funding
• guns vs. butter…

Question 19

relative poverty

Answer 19

Relative poverty

• Level of poverty is in relation to the rest of the population’s income; poverty can never be eliminated; income below some point on this distribution
• average

Question 20

Absolute poverty

Answer 20

• Amount of money that a family needs to purchase food, housing, and other basic necessities.
• Income below some dollar amount
• creates a line, where people are above or below.

Question 21

Social insurance programs

Answer 21

In the United States, federal government social insurance programs are generally funded through payroll taxes.

Social insurance programs in the United States include Old Age, Survivors, Disability Insurance benefits, Medicare benefits, and Unemployment benefits.

Question 22

EITC

Answer 22

The earned income tax credit subsidizes low-income working families.

The credit equals a fixed percentage of earnings from the first dollar of earnings until the credit reaches its maximum.

The maximum credit is paid until earnings reach a specified level, after which it declines with each additional dollar of income until no credit is available.

Question 23

Block grant

Answer 23

A block grant confers monies to the state from the federal government.

• The state has discretion, under certain broadly stated federal goals, in the dissemination of these funds.

Question 24

Some examples of entitlement programs

Answer 24

• Social Security
• Medicare
• Medicaid
• Most Veterans’ Administration programs
• Federal employee and military retirement plans
• Unemployment compensation
• Food stamps
• Agricultural price support programs

Question 25

Residual “Welfare”

Answer 25

General Assistance (GA)

• a residual program with limited availability for groups who do not fit into either TANF or SSI
• poor, non-aged childless adults
• “non-deserving poor”
• meager benefits, scarce availability.

Question 26

SSI provides?

Answer 26

Monthly cash payments in accordance with uniform, nationwide eligibility requirements to needy aged, blind, and disabled persons.

Question 27

What were the intentions of SSI?

Answer 27

A basic national income maintenance system for the aged, blind, and disabled which would differ from the state programs it replaced in a number of ways.

• Administered by the SSA in a manner as comparable as possible to the way in which benefits were administered under the Social Security Program.
• Congress intended the new SSI program to be more than just a federal version of the former state adult assistance programs which it replaced.

Question 28

Primary goals of TANF

Answer 28

1. Provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;
2. End the dependence of needy parents on government benefits by promoting job preparation, work, and marriage;
3. Prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and
4. Encourage the formation and maintenance of two-parent families.

Question 29

TANF Highlights

Answer 29

Eliminated entitlement to benefits

IMPLEMENTATIONS different from previous program

• Work requirements (work activities)
• Time limits–5-year maximum life time limit on benefit receipt–States can exempt 20% of caseload
• Funding in block grants to states ($16.5 billion/year)–

A pot of money vs. increased federal money to match need

Question 30

What are advantages and disadvantages to absolute poverty measure?

Answer 30

Advantages

• Easy to measure
• Easy to see trends

Disadvantages

• Doesn’t include in-kind benefits.
• What about changing standard of living?
• Which income do we count?

Question 31

What are the differences of Poverty Thresholds and Guidelines?

Answer 31

THRESHOLDS - Census Bureau

Purpose/Use -

The threshold in United States are updated and used for statistical purposes. In 2015, in the United States, the poverty threshold for a single person under 65 was an annual income of US $11,770; the threshold for a family group of four, including two children, was US $24,250.

GUIDELINES - Department of Health and Human Services

Purpose/Use -

The poverty guidelines are the other version of the federal poverty measure. They are issued each year in the Federal Register by the Department of Health and Human Services (HHS). The guidelines are a simplification of the poverty thresholds for use for administrative purposes — for instance, determining financial eligibility for certain federal programs.