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Testimony: The Consequences of Redrawing the Poverty Line

House Committee on Ways and Means

October 24, 2023

Chairman Smith, Chairman LaHood, Ranking Member Davis, and distinguished members of the
Subcommittee on Work and Welfare, thank you for the opportunity to testify on poverty
measurement. My name is Kevin Corinth, and I am a Senior Fellow and the Deputy Director of
the Center on Opportunity and Social Mobility at the American Enterprise Institute. This
testimony reflects my personal views and does not represent those of the American Enterprise
Institute, which has no institutional views.

A society should be judged—in important part—on the basis of how it treats its poorest
members. It is thus essential that we measure poverty accurately and transparently. That is
especially the case when how we measure poverty has direct implications for how government
assistance is provided to individuals and allocated across geographic areas.

Unfortunately we have gone astray, due to the continued elevation of the Supplemental Poverty
Measure (SPM). The SPM cloaks in complexity value judgments about where to set the poverty
line, doing nothing to provide more accurate information about poverty but instead serving to
mislead the public that value judgments about how much is “enough” can be determined by
science. If the SPM were elevated to the “nation’s headline poverty statistic,” the key
recommendation of a recent National Academies of Sciences, Engineering, and Medicine
consensus report, and if the SPM were unilaterally declared the official poverty measure by the
Office of Management and Budget (OMB), there would be profound effects on government
programs. Government spending would rise by more than $124 billion over the next decade, and
federal aid would be reallocated from low-income states to high-income states. These policy
changes would automatically take effect through the simple action of the OMB Director updating
a statistical policy directive to make the SPM the official poverty measure, a move that has now
been given scientific cover by the National Academies and one that requires no Congressional input.

Read the entire testimony here.