Revised Formula Counts More Americans in Poverty

Simon Norwood, a construction worker who hasn't found work in months, poses at a garage apartment...

Simon Norwood, a construction worker who hasn't found work in months, poses at a garage apartment belonging to a friend in Little Rock, Ark., Thursday, Aug. 27, 2009. The official poverty rate for Americans 65 years and older has stood for years at 10 percent, the lowest rate among age groups. But the true rate could be nearly twice that high, according to a revised formula created by the National Academy of Sciences that is gaining favor among public officials, including some in the Obama administration. (AP Photo/Danny Johnston)

(AP)

The poverty rate among older Americans could be nearly twice as high as the traditional 10 percent level, according to a revision of a half-century-old formula for calculating medical costs and geographic variations in the cost of living.

The National Academy of Science's formula, which is gaining credibility with public officials including some in the Obama administration, would put the poverty rate for Americans 65 and over at 18.6 percent, or 6.8 million people, compared with 9.7 percent, or 3.6 million people, under the existing measure. The original government formula, created in 1955, doesn't take account of rising costs of medical care and other factors.

"It's a hidden problem," said Robin Talbert, president of the AARP Foundation, which provides job training and support to low-income seniors and is backing legislation that would adopt the NAS formula. "There are still many millions of older people on the edge, who don't have what they need to get by."

If the academy's formula is adopted, a more refined picture of American poverty could emerge that would capture everyday costs of necessities besides just food. The result could upend long-standing notions of those in greatest need and lead eventually to shifts in how billions of federal dollars for the poor are distributed for health, housing, nutrition and child-care benefits.

The overall official poverty rate would increase, from 12.5 percent to 15.3 percent, for a total of 45.7 million people, according to rough calculations by the Census Bureau. Data on all segments, not only the elderly, would be affected:

— The rate for children under 18 in poverty would decline slightly, to 17.9 percent.

— Single mothers and their children, who disproportionately receive food stamps, would see declines in the rates of poverty because noncash aid would be taken into account. Low-income people who are working could see increases in poverty rates, a reflection of transportation and child-care costs.