National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: A National Minimum Benefit Standard for AFDC

« Previous: A Supplementary Program with a National Benefit Standard - Food Stamps
Suggested Citation:"A National Minimum Benefit Standard for AFDC." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
Page 340

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THE POVERTY MEASURE AND AFDC 340 localized. Many communities did not participate in the food stamp (or commodity distribution) program, and eligibility standards varied widely among those that did. In 1970 the Food Stamp Program was effectively nationalized: a single national standard was adopted, which was higher than any then in use in the states; the Secretary of Agriculture was empowered to set national eligibility requirements; and stiff penalties could be imposed on states that did not operate a program in every county. In 1977 Congress eliminated all purchase requirements for food stamps, making them a simple supplement to cash assistance in inverse proportion to family income (as well as a benefit to working families not receiving cash assistance). The effect of these changes was to reduce the variation across states in the combined value of AFDC and food stamp benefits. However, there was no incentive for low-benefit states to raise AFDC benefits per se; rather the provision that food stamp benefits increase (decrease) by 30 cents for every dollar decrease (increase) in cash benefits in effect rewarded states that kept cash benefits low and penalized states that increased them. A National Minimum Benefit Standard for AFDC The strategy of legislating a uniform minimum benefit standard for AFDC has never achieved legislative success. In an early discussion of needed reforms in public assistance programs, Leon Keyserling's Conference on Economic Progress (1959:58) urged that "minimum uniform standards among the States should be set by the Federal Government." In 1965, the Office of Economic Opportunity (OEO) proposed a negative income tax program with a single nationwide payment schedule as part of its first "national anti-poverty plan." As part of its second plan in 1966, OEO again proposed a negative income tax program with a single nationwide payment schedule; besides being available to all poor persons without regard to demographic category, this proposed program would have gradually replaced existing public assistance programs (including AFDC) by 1972. In that same year the Advisory Council on Public Welfare (1966:15,22,117) recommended a "minimum standard for public assistance payments below which no State may fall." It proposed (p. xii) that the ''Federal Government … set nationwide standards, adjusted by objective criteria to varying costs and conditions among the States, and assume the total cost of their implementation above a stipulated State share." In 1967 President Johnson proposed that states be required to pay 100 percent of their standard of need, but he did not propose any specific minimum benefit standard. The proposal was rejected in the House Ways and Means Committee. The President's Commission on Income Maintenance (1969:7) recommended a "universal income supplement program financed and administered by the Federal Government." Concerning benefit levels for this income supplement program, the Commission stated (p. 59) that "attempts to reflect different costs of living in different areas would involve many difficulties and so a uniform National supplement is recommended."

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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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