The Census Defines the Poverty Rate Up

Its flawed income measure leads to the overpayment of welfare, including Medicaid, to recipients.

By Phil Gramm and John Early. Excerpts:

"The Census has for decades overstated the extent of poverty because it doesn’t count as income 88% of transfer payments made to households classified as poor. The Census doesn’t count refundable tax credit checks, food-stamp debit cards, Medicaid and some 100 other federal, state and local transfer payments as income to the recipients."

"Inflation-adjusted government transfer payments to those being classified as poor are almost 20 times greater in real purchasing power than they were when the War on Poverty began, yet the country’s official poverty rate is still about 11%, the same as 50 years ago."

"The Congressional Budget Office in January issued a new poverty measure that sharply contrasts with the Census measure, and confirms previous independent studies of Census bias. This new measure counts a higher percentage of transfer payments as income and estimates that the poverty rate in 2021 was 0.8%—much lower than the Census rate of 11.6%."

"the Census reports that the average household income in the bottom fifth of income recipients is only $17,650, when if you count all government-provided benefits it’s more than $65,000."