Big Questions In Economics

[Sabel Kantah]

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This phrase refers to the Census Bureau poverty thresholds, although it is included in the legislative section of the 1981 Omnibus Budget Reconciliation Act (OBRA) that requires the Secretary of Health and Human Services to update the poverty guidelines annually. The thresholds are mentioned in this legislative section because they are the starting point from which the poverty guidelines are calculated. (The legislative section is section 673(2) of OBRA-1981 or of the Community Services Block Grant Act; the U.S. Code citation is 42 U.S.C. 9902(2) .)

Since 2006, the poverty guidelines have been published in late January (except for 2010). The Federal Registration notices published since 1982 may be viewed by visiting the Prior HHS Poverty Guidelines and Federal Register References page.

The only way to get an official update of a chart showing percentage multiples of the poverty guidelines is to contact the organization or office that prepared it. While ASPE calculates the poverty guidelines each year, ASPE does not calculate or prepare any official charts showing percentage multiples of the poverty guidelines even though such charts may indicate the HHS poverty guidelines as the source. However, ASPE provides a spreadsheet tool to assist organizations in creating these charts. Be aware, however, that the rounding rules for these calculations, as well as procedures for calculating monthly income, are determined by the federal, state, and local program offices that use the poverty guidelines for eligibility purposes. Therefore, the numbers in these spreadsheets could differ somewhat from what is used by other federal, state, or other organizations.

Chart showing different multiples of the poverty guidelines for 2024 (XLSX)

Chart showing different multiples of the poverty guidelines for 2024 (PDF)

Chart showing different multiples of the poverty guidelines for prior years (XLSX)

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The only way to get an update of a sliding fee scale is to contact the organization or office that prepared it. While ASPE calculates the poverty guidelines each year, ASPE does not calculate or prepare any sliding fee scales even though such scales may indicate the HHS poverty guidelines as the source.

The HHS poverty guidelines, or percentage multiples of them (such as 125 percent, 150 percent, or 185 percent), are used as an eligibility criterion by a number of federal programs, including those listed below. For examples of major means-tested programs that do not use the poverty guidelines, see the end of this response.

Some state and local governments have chosen to use the federal poverty guidelines in some of their own programs and activities. Examples include financial guidelines for child support enforcement and determination of legal indigence for court purposes. Some private companies (such as utilities, telephone companies, and pharmaceutical companies) and some charitable agencies also use the guidelines in setting eligibility for their services to low-income persons.

There is no simple answer to these questions. When determining program eligibility, some agencies compare before-tax income to the poverty guidelines, while other agencies compare after-tax income. Likewise, eligibility can be dependent on gross income, net income, or some other measure of income. Federal, state, and local program offices that use the poverty guidelines for eligibility purposes may define income in different ways. To find out the specific definition of income (before-tax, after-tax, etc.) used by a particular program or activity, one must consult the office or organization that administers that program.

No. ASPE does not project price changes for the current year; instead, we issue guidelines based on price changes through the most recent completed year. Accordingly, the 2024 poverty guidelines, issued in January 2024, reflect actual price changes through calendar year 2022

The Assistant Secretary for Planning and Evaluation (ASPE) is the principal advisor to the Secretary of the U.S. Department of Health and Human Services on policy development, and is responsible for major activities in policy coordination, legislation development, strategic planning, policy research, evaluation, and economic analysis.

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A particular item enters the CPI sample through a process called initiation. This initiation process, typically carried out in person by a CPI data collector, involves selecting a specific item to be priced from the category that has been designated to be priced at that store. For example, suppose a particular grocery store has an outlet where cheese will be priced. A particular type of cheese item will be chosen, with its likelihood of being selected roughly proportional to its popularity. If, for example, cheddar cheese in 8 oz. packages makes up 70 percent of the sales of cheese, and the same cheese in 6 oz. packages accounts for 10 percent of all cheese sales, and the same cheese in 12 oz. packages accounts for 20 percent of all cheese sales, then the 8 oz. package will be 7 times as likely to be chosen as the 6 oz. package. After probabilities are assigned, one type, brand, and container size of cheese is chosen by an objective selection process based on the theory of random sampling. The particular kind of cheese that is selected will continue to be priced each month in the same outlet.

This item will be repriced, monthly or bimonthly, until it is replaced after four years through sample rotation. Repricing is usually done in person, but may be done via telephone or the internet. The process of selecting individual quotes results in the sample as a whole containing a wide variety of specific items of a category roughly corresponding to consumer purchases. So the cheese sample (or the new vehicle sample, the television sample, etc.) contains a wide variety of styles and brands of cheese, vehicles, televisions, etc.

Recorded price changes are weighted by the importance of the item in the spending patterns of the appropriate population group. The combination of carefully selected geographic areas, retail establishments, commodities and services, and associated weight, gives a weighted measurement of price change for all items in all outlets, in all areas priced for the CPI.

As an economic indicator. The CPI is the most widely used measure of inflation and is sometimes viewed as an indicator of the effectiveness of government economic policy. It provides information about price changes in the Nation's economy to government, business, labor, and private citizens and is used by them as a guide to making economic decisions. In addition, the President, Congress, and the Federal Reserve Board use trends in the CPI to aid in formulating fiscal and monetary policies.

As a deflator of other economic series. The CPI and its components are used to adjust other economic series for price changes and to translate these series into inflation-free dollars. Examples of series adjusted by the CPI include retail sales, hourly and weekly earnings, and components of the National Income and Product Accounts.

The CPI is also used as a deflator of the value of the consumer's dollar to find its purchasing power. The purchasing power of the consumer's dollar measures the change in the value to the consumer of goods and services that a dollar will buy at different dates. In other words, as prices increase, the purchasing power of the consumer's dollar declines.

As a means of adjusting dollar values. The CPI is often used to adjust consumers' income payments (for example, Social Security), to adjust income eligibility levels for government assistance, and to automatically provide cost-of-living wage adjustments to millions of American workers. The index affects the income of more than 90 million people because of statutory action: over 65 million Social Security beneficiaries and over 38 million Supplemental Nutrition Assistance Program (SNAP) recipients (formerly food stamps), among other programs.

Another example of how dollar values may be adjusted is the use of the CPI to adjust the Federal income tax structure. These adjustments prevent inflation-induced increases in tax rates. In addition, eligibility criteria for millions of food stamp recipients, and children who eat lunch at school, are affected by changes in the CPI. Many collective bargaining agreements also tie wage increases to the CPI.

The CPI reflects spending patterns for each of two population groups: all urban consumers and urban wage earners and clerical workers. The all urban consumer group represents over 90 percent of the total U.S. population. It is based on the expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the unemployed, and retired people, as well as urban wage earners and clerical workers. Not included in the CPI are the spending patterns of people living in rural nonmetropolitan areas, those in farm households, people in the Armed Forces, and those in institutions, such as prisons and mental hospitals. Consumer inflation for all urban consumers is measured by two indexes, namely, the Consumer Price Index for All Urban Consumers (CPI-U) and the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is based on the expenditures of households included in the CPI-U definition that also meet two additional requirements: more than one-half of the household's income must come from clerical or wage occupations, and at least one of the household's earners must have been employed for at least 37 weeks during the previous 12 months. The CPI-W population represents approximately 30 percent of the total U.S. population and is a subset of the CPI-U population.

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