Days 7-12 Flashcards
(31 cards)
What is absolute poverty?
Income below some dollar amount.
What are the two versions of poverty measure?
Each year, the U.S. Census Bureau counts people in poverty with two measures. Both the official and supplemental poverty measures are based on estimates of the level of income needed to cover basic needs. Those who live in households with earnings below those incomes are considered to be in poverty.
Poverty Thresholds -
The U.S. Census Bureau determines poverty status by comparing pre-tax cash income against a threshold that is set at three times the cost of a minimum food diet in 1963
- updated annually for inflation using the Consumer Price Index
- adjusted for family size, composition, and age of householder.
- “Family” is defined by the official poverty measure as persons living together who are related by birth, marriage, or adoption.
- Thresholds do not vary geographically•(except for Alaska and Hawaii)
The threshold in United States are updated and used for statistical purposes. In 2015, in the United States, the poverty threshold for a single person under 65 was an annual income of US $11,770; the threshold for a family group of four, including two children, was US $24,250.
Poverty Guidelines -
The poverty guidelines are the other version of the federal poverty measure. They are issued each year in the Federal Register by the Department of Health and Human Services (HHS). The guidelines are a simplification of the poverty thresholds for use for administrative purposes — for instance, determining financial eligibility for certain federal programs.
Who updates the poverty thresholds?
The Census Bureau updates every year.
Who developed the poverty thresholds?
Developed in 1963-1964 by Mollie Orshansky of the Social Security Administration
Orshansky based her poverty thresholds on the economy food plan.
How do poverty thresholds approximate need?
They vary for family size
They do NOT vary by geographic region.
They are ADJUSTED for inflation
They are based on food consumption and assume that families spend ONE THIRD of their income on food.
How are poverty thresholds used?
Mainly for statistical purposes
- Preparing estimates of the number of Americans in poverty each year.
- All official poverty population figures are calculated using the poverty thresholds.
What programs use poverty guidelines to determine program eligibility?
Head Start
Supplemental Nutrition Program
National School Lunch Program
Low-Income Home Energy Assistance Program
Children’s Health Insurance Program
What does the official poverty measure take into account as far as cash benefits from the government?
Social Security
Unemployment Insurance (UI) benefits
Supplemental Security Income (SSI)
public assistance benefits (TANF),
Workers’ compensation benefits
What are the means-tested cash assistance programs?
Temporary Assistance for Needy Families (TANF)
Supplemental Security Income (SSI)
General Assistance (GA)
Earned Income Tax Credit (EITC)
What are means-tested, near cash assistance programs?
Supplemental Nutrition Program (SNAP)
Universal services
Universal social services calls for social services that provide benefits to all members of society, regardless of their income or means.
Means-tested cash programs
The means-tested welfare system consists of 79 federal programs providing cash, food, housing, medical care, social services, training, and targeted education aid to poor and low-income Americans.
Means-tested welfare programs differ from general government programs in two ways;
First, they provide aid exclusively to persons (or communities) with low incomes; second, individuals do not need to earn eligibility for benefits through prior fiscal contributions.
Means-tested “near cash” or in-kind benefits
- These are test to help determine who gets specific benefits
- This is in addition to the general requirements
- Benefits based on income
Entitlement
As long as you meet the requirements you will receive the benefits
- programs that beneficiaries have legal rights to
in-kind
- Any services provided through the government programs that aren’t cash.
- Goods and services provided to beneficiaries (ex-food stamp, Medicaid, Housing assistance)
Culture of poverty
- Unemployment
- Socioeconomic status
- Racism
- Lack of human capital
- Criminal history
Mandatory spending
Most of this money goes towards Social Security and Medicare
- Programs that are required to receive funding, regardless of fiscal standing (Social Security, Medicare, federal share of Medicaid, SNAP, Unemployment Insurance)
- Two largest mandatory spending programs
(Social Security and Medicare) make up about 40% of entire federal budget. - Social security makes up more the entire federal budget.
discretionary spending
Discretionary spending
- has a split between military and everything else (defense and non-defense spending)
- non-defense=education pell grant, WIC, low income housing assistance, foreign aid, transportation; environment; changes each year for the fiscal year
- spending on these programs are subject to annual changes in levels of funding
- guns vs. butter…
relative poverty
Relative poverty
- Level of poverty is in relation to the rest of the population’s income; poverty can never be eliminated; income below some point on this distribution
- average
Absolute poverty
- Amount of money that a family needs to purchase food, housing, and other basic necessities.
- Income below some dollar amount
- creates a line, where people are above or below.
Social insurance programs
In the United States, federal government social insurance programs are generally funded through payroll taxes.
Social insurance programs in the United States include Old Age, Survivors, Disability Insurance benefits, Medicare benefits, and Unemployment benefits.
EITC
The earned income tax credit subsidizes low-income working families.
The credit equals a fixed percentage of earnings from the first dollar of earnings until the credit reaches its maximum.
The maximum credit is paid until earnings reach a specified level, after which it declines with each additional dollar of income until no credit is available.
Block grant
A block grant confers monies to the state from the federal government.
• The state has discretion, under certain broadly stated federal goals, in the dissemination of these funds.
Some examples of entitlement programs
- Social Security
- Medicare
- Medicaid
- Most Veterans’ Administration programs
- Federal employee and military retirement plans
- Unemployment compensation
- Food stamps
- Agricultural price support programs
