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Thank you for holding this hearing and others this year, bringing renewed attention to the mportance of addressing poverty in America. In this testimony, I will provide some brief background, and then discuss why the method for measuring poverty should be updated, some principles that should guide the effort and recommendations to move the process forward.

I am the director of the Task Force on Poverty at the Center for American Progress, a nonprofit, nonpartisan public policy think tank in Washington, D.C. I am on leave from the Center for Law and Social Policy, where I was the Director of Policy. CAP’s 14- member Task Force1 was charged with making a case for why the nation should address poverty and proposing a strategy for how to do so. In April, CAP’s Task Force released its report, "From Poverty to Prosperity: A National Strategy to Cut Poverty in Half."

Our Task Force’s principal focus was not on the definition of poverty, but rather strategies for addressing it. Nevertheless, the question of how poverty should be defined came up repeatedly in our efforts, in two significant and related ways.

First, when seeking the views of state and local actors about strategies to reduce poverty, one of the most common initial observations was that it was rarely useful to use the official poverty line as a measure of need, because it was so low in relation to living costs. In recent years, the increased reliance on approaches like selfsufficiency standards, family budgets, and setting program eligibility at some multiple of the poverty line is a direct response to concerns that the poverty line simply doesn’t adequately reflect the amounts that families need in order to get by.

Second, as our Task Force considered policy responses to reduce poverty, we faced, in practical terms, an issue that is routinely recognized in the academic discussions of poverty measurement. Many initiatives that would clearly improve economic well-being for low-income families would have no effect on poverty under official measures, because the official measure does not count the effects of tax policy and near-cash benefits or adjust for work-related costs. For example, expanding the Earned Income Tax Credit or Child Tax Credit would not reduce the official poverty rate (except indirectly if it affected employment), even though it would increase family resources. Expanding child care assistance would not reduce the official poverty rate (except by raising employment) even though it would defray costs that families face in going to work. Expanded housing subsidies or improved food stamp participation rates would also not affect the official poverty rate.