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Report Urges New Method Of Setting the Poverty Line

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Current federal poverty data undercount the number of poor families in America, a group of experts concludes in a 500-page report, which recommends a new method for identifying the impoverished.

"We're recommending a tool that is based on reality," said Robert T. Michael, the chairman of a 13-member panel of sociologists that drafted the report for the National Research Council's committee on national statistics.

Data based on the poverty line--the income level at which people are considered to be poor--are used to determine eligibility for many federal-aid programs, including Title I and the school-lunch program.

The N.R.C. panel recommends adjusting poverty estimates to reflect regional differences in the cost of living--which would likely benefit urban areas--and basing the poverty line on a family's disposable income, rather than total income. To determine that figure, the panel proposes using after-tax income in calculations and subtracting money spent on needs such as child care and transportation. The formula would also count as income such noncash benefits as food stamps and public-housing subsidies.

Raising the Threshhold

Today, the poverty line is calculated based on the cost of a minimal diet, multiplied by three, a formula generated in the 1960's by a researcher who determined that families typically spend a third of their income on food. The panel said that formula fails to consider costs that have an especially strong impact on low-income families.

"A great many families are near the poverty line, but not counted as poor though their income goes to necessary expenditures like child care, medical costs, and transportation," said one panelist, Robert M. Hauser.

The panel estimates that the proposed new method would have set the 1992 poverty threshold at $12,700 to $15,900 for a family of four. The figure is close to the 1992 poverty line of $14,228. However, because it represents disposable income, a family would probably have to earn a higher total income to exceed the threshold.

Observers noted that in a political climate that has put a premium on reducing spending, a measure that would likely increase the number of people considered poor might not be welcomed.

Still, Mr. Michael said: "Surely, regardless of political persuasion, you need this information for making policy decisions."

Panelists are scheduled to meet with federal officials to review their three-year effort. Any change in official poverty-standards policy must be approved by the White House's Office of Management and Budget.

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