Obama's Policies Redefine Poverty

Tuesday, 19 Jul 2011 11:39 AM

By Ernest Istook

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President Obama and the left claim they’re protecting the poor and downtrodden by opposing spending cuts.

It’s a key point in budget talks because anti-poverty spending is a huge part of the federal budget.

Big government relies on illusions. Claiming that stimulus spending would fix unemployment. Arguing that taxing the productive would create prosperity. And exaggerating the conditions of those who are labeled as “poor.”

So what is poverty? In America, poverty seldom means doing without.

A new Heritage Foundation study reminds us that America’s “poor” maintain a standard of living much of the world would envy. Typically, “poor” Americans have more living space than the average European. Plus air conditioning, cable TV, and computer games. They are well-fed, and report they are not hungry.

They usually have a refrigerator, stove plus microwave, washer and dryer, dishwasher, and cell phone. That’s the case in most households that our government defines as “in poverty.”

Most of America’s “poor” own a car. A third have two cars. And 43 percent own their homes.

By defining poverty so broadly, we drain resources that instead could be focused on those who truly are in dire straits. And we spend billions that could be cut from the budget instead.

Because we overdefine and oversubsidize “poverty,” the Census Bureau reports that we have 43 million poor people. To help them, we spend over $900 billion a year in federal and state dollars. Do the math. We spend more than $20,000 apiece for each person deemed poor. For a family of four, that’s $80,000. And it’s on top of what they may earn for themselves.

We spend it through over 70 means-tested programs that give cash, food, housing, medical care, and more. As the Census Bureau explains, “The official poverty definition uses money income before taxes and does not include capital gains or noncash benefits (such as public housing, Medicaid, and food stamps).”

The new Heritage Foundation study (“Air Conditioning, Cable TV, and an Xbox: What Is Poverty in the United States Today?”) pulls these numbers together out of official reports from a variety of federal agencies into a coherent picture.

As Heritage authors Robert Rector and Rachel Sheffield conclude, “Most of the persons whom the government defines as ‘in poverty’ are not poor in any ordinary sense of the term.”

Because we define poverty in overly broad terms, the cost to taxpayers is increased and we lose focus on those who need or deserve help the most.

Just as welfare reform in the 1990s helped millions become self-sufficient while it saved taxpayer money, a new round of reform could do the same. But President Obama gutted those reforms as part of his stimulus legislation.

In addition Obama has boosted federal means-tested welfare spending by almost 50 percent and seeks to ratchet that spending even higher in the future.

Serious budget negotiations should aim to stop this growth and cut back the redundant and overly generous programs already in place. We could start with legislation such as the Welfare Reform Act of 2011 (introduced by Rep. Jim Jordan, R-Ohio), which would create inflation-adjusted caps on means-tested welfare spending.

President Obama wants to take us in the opposite direction, changing the definitions of poverty so that more Americans are included. Whenever other Americans improve their standard of living, Obama wants the definition of poverty to broaden automatically.

Copying the futility of a dog chasing its tail, we could never eliminate poverty because government would keep moving the goal away from us.

It’s time for more realistic definitions of poverty in America, so we can take more realistic approaches to combating it. But to succeed, we must refute the myths about poverty in America.

Former Congressman Istook is now a distinguished fellow at The Heritage Foundation.















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