Trump administration proposal to alter federal poverty guidelines could cause big problems for struggling North Carolinians

By: - June 3, 2019 12:38 pm

Federal poverty levels have been around since the 1960s and they are one of the main drivers of whether a household is eligible for certain federal programs, such as the Supplemental Nutrition Assistance Program (also known as “SNAP” and “food stamps”), Medicaid, the Children’s Health Insurance Program, Head Start, the National School Lunch Program, and the Low-Income Home Energy Assistance Program.

On May 7, the U.S. Office of Management and Budget proposed a rule to change how the federal poverty level is calculated. This rule suggests using a lower measure of inflation when adjusting the federal poverty level. Lowering the threshold would put millions of Americans, and thousands of North Carolinians at risk for losing access to vital safety net programs that have been shown to improve physical and mental health – while also helping the state’s economy. But how is it that a federal agency can propose a rule that could become a law?

As an assistant professor at NC State with a background in policy and a former Washington D.C. analyst, it is clear to me how important it is that we all understand the lawmaking process. Most of us are familiar with the traditional route of Congress introducing bills and the President signing them into law. But there are two other avenues for creating laws, first through Executive Order, in which the President issues an order that carries the same weight as law, and second through rulemaking. Rulemaking is a process is which federal agencies can propose regulations that fall under their authority – such as regulations pertaining to a program they oversee.

While rulemaking is probably the least publicized option, this quiet path makes it a powerful avenue for introducing rules that if passed, are enforceable by law. Federal agencies are required to publish proposed rules in the Federal Register, a publicly available database. Any person or organization may submit a public comment expressing their views on a proposed rule. When agencies publish final rules, they must address issues presented in public comments and discuss any changes made in response to them.

The U.S. Office of Management and Budget is giving the public 45 days to make comments on its proposed rule to lower poverty thresholds. After more than a decade of research on policies impacting low-income people, the public should know how important programs that use poverty levels to determine eligibility, specifically SNAP, are to those that use them. SNAP, which distributes benefits that can be used to purchase an array of food products, is the largest federal food assistance program in the country. Ironically, it lifted 3.4 million Americans out of poverty in 2017 because SNAP recipients can use money that would otherwise be going towards food on other household expenses.

In 2017, North Carolina had 10 million state residents, of which 15% were living in poverty. SNAP provided $1.9 billion in benefits to 1.2 million North Carolinians in 2017. SNAP is effective at reducing food insecurity by nearly 30% – which is important for North Carolina since nearly 15% of North Carolinians are food insecure and one-third of them don’t even qualify for SNAP. Receiving SNAP benefits not only improves the health and wellness of low-income individuals and families, it also helps our economy. The U.S. Department of Agriculture estimates that for every $1 dollar invested in SNAP, $1.79 goes back into the economy. Those dollars help many food retailers, like grocery stores, convenience stores and farmers’ markets stay in business.

If the government wants to rethink federal poverty thresholds, it should probably consider expanding the definition rather than trimming it. In the past 40 years, even though wages have increased, workers have about the same purchasing power – with one exception. The highest paid workers have benefited most: they make more and can buy more. Nearly 40% of Americans have reported that they would not be able to pay an unexpected expense of $400 (such as a medical bill or car repair). Another ironic statistic – seven out of the top 10 lowest paying jobs in this country are food-related.  So workers that harvest, prepare, and serve our food are more likely to rely on the SNAP program to purchase food for their own families.

Safety net programs, like SNAP, are vital to improving our state’s overall health and economic well-being. Altering the definition of poverty levels and removing people from these programs will only cause struggling North Carolinians to falter even more.

Click here to read the proposed rule and to submit a comment.

The Center on Budget and Policy Priorities has also prepared additional detailed analyses of the proposal. Click here to learn more.

Lindsey Haynes-Maslow, PhD, MHA is an Assistant Professor & Extension Specialist in the Department of Agricultural and Human Sciences at North Carolina State University.

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