National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: A Supplementary Program with a National Benefit Standard - Food Stamps

« Previous: Proposals for AFDC Minimum Benefits: A Brief History
Suggested Citation:"A Supplementary Program with a National Benefit Standard - Food Stamps." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
Page 339

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THE POVERTY MEASURE AND AFDC 339 maximum federal payment of $6 a month for the first child and $4 for other children. In 1950 the program was amended to provide benefits to the mother herself (or another caretaker of a dependent child or children), and in 1962 the program was amended to provide benefits (at state discretion) to two-parent families in which both were unemployed. The original legislation required that the states pay one-third of the costs (i.e., it prohibited states from the common practice of laying off all their costs on local jurisdictions), and it made federal payments "conditional on passage and enforcement of mandatory State laws and on the submission of approved plans assuring minimum standards in investigation, amounts of grants, and administration" (Congressional Record, January 17, 1935:548). Since one-half of the counties in the United States did not provide mothers' pensions at the time and there was wide variation in payments across counties within states, the legislation had the effect of reducing within-state variation in benefits. However, it had little effect on across state variation, leaving broad discretion to the states to set need standards, payments, and eligibility rules. For example, states were allowed to keep their residency requirements, and most did so until the Supreme Court in 1969 ruled them to be unconstitutional. Historically, reformers have followed three strategies to try to establish more uniform state policies with regard to AFDC benefits (see Peterson and Rom, 1990:99-100), focusing on the matching formula, a supplementary national program, and national minimum benefit standards. The Matching Formula The federal matching percentage was raised from 33 to 50 percent in 1939, to be consistent with the percentage for programs to assist the needy elderly, blind, and disabled. The formula was changed several times more between 1944 and 1958. Finally, in 1965, states were given the option of switching to the matching formula adopted for the Medicaid program. This formula committed the federal government to paying at least 50 percent of the welfare benefit in every state and to paying a higher matching rate (up to 83%) in those states with lower per capita income. Currently, all states use the Medicaid matching formula for AFDC benefits. The matching percentages in fiscal 1994 varied from 50-55 percent in 19 states and the District of Columbia to 70-79 percent in 13 states (U.S. House of Representatives, 1994: Table 10-17). The rationale for the changes in the matching formula included the desire to provide incentives for low-benefit states to raise their benefits. However, Peterson and Rom (1990) found that the differences in benefit levels across states remained essentially unchanged, with a coefficient of variation that ranged from 34 to 37 percent in each decade from the 1940s to the 1980s. A Supplementary Program with a National Benefit Standard —Food Stamps Food assistance programs in the United States were initially very

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Each year's poverty figures are anxiously awaited by policymakers, analysts, and the media. Yet questions are increasing about the 30-year-old measure as social and economic conditions change.

In Measuring Poverty a distinguished panel provides policymakers with an up-to-date evaluation of:

  • Concepts and procedures for deriving the poverty threshold, including adjustments for different family circumstances.
  • Definitions of family resources.
  • Procedures for annual updates of poverty measures.

The volume explores specific issues underlying the poverty measure, analyzes the likely effects of any changes on poverty rates, and discusses the impact on eligibility for public benefits. In supporting its recommendations the panel provides insightful recognition of the political and social dimensions of this key economic indicator.

Measuring Poverty will be important to government officials, policy analysts, statisticians, economists, researchers, and others involved in virtually all poverty and social welfare issues.

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