(12/31/2011)
A record number of Americans, nearly 50 million, are poor based on a new census tool that for the first time takes into account rising medical costs and other expenses.

The numbers are part of a first-ever supplemental poverty measure aimed at providing a fuller picture of poverty.

The new figures should stir more debate over Social Security, Medicare and programs to help the poor, with Republicans in Congress dedicated to reforming the social programs or privitizing them to reel in the out-of-control national debt.

Broken down by group, Americans 65 or older sustained the largest increases in poverty under the revised formula, nearly doubling to 15.9 percent, or 1 in 6 because of medical expenses that are not accounted for in the official rate. Those include rising Medicare premiums, deductibles and expenses for prescription drugs.

"As seniors choose between food and medicine, some lawmakers are threatening lifeline programs that provide a boost to those in poverty or a safety net to those grasping at the middle class," said Jo Ann Jenkins, president of AARP Foundation, which represents the needs of older Americans.

"With nearly 16 percent of seniors already living in poverty, our country cannot afford to slide further backward," she said.

Working-age adults ages 18-64 saw increases in poverty from 13.7 percent to 15.2 percent, due mostly to commuting and child care costs.

Other government reports paint a bleak picture for America's young adults, their ability to obtain a job professionally or engage in blue collar work.

Economists have long criticized the official poverty rate as inadequate, although they differ widely on the best ways to calculate it.

The former official formula failed to account for other expenses such as out-of-pocket medical care, child care and commuting, and it did not consider non-cash government aid when calculating income, such as food stamps and tax credits, which have increased in the last few years.

"We're now about to go into federal debt discussions showing a major increase in elder poverty and a decrease for African-Americans. That just defies common sense, and the political implications could be devastating," said Douglas Besharov, a University of Maryland public policy professor and former scholar at the conservative American Enterprise Institute, who called the new measure "arbitrary." The poverty line is defined under the official measure as $11,139 for an individual, or $22,314 for a family of four.

Because of Social Security benefits, only 9 percent of seniors, or roughly 3.5 million, live in poverty according to the official formula.

Medical costs are a killer to family budgets.

That number increases by roughly 2.7 million when taking into account additional health care costs and other factors. If it weren't for the health care costs, the poverty rate for seniors would have dropped to 8.6 percent.

Without food stamps, the poverty rate would have risen to 17.7 percent, which translates to about 5 million more people.


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