The US Census Bureau changed its formulation of poverty for the first time in over fifty years, taking into account reductions in the cost of food while including rising costs in health care, child care, housing and transportation. In addition, non-cash government aid like food stamps and tax credits were finally included in the formulation.

When all of those figures were taken into account, it turns out that poverty is more prevalent in the United States than previously thought.

The ranks of America’s poor are greater than previously known, reaching a new level of 49.1 million — or 16 percent — due to rising medical costs and other expenses that make it harder for people to stay afloat, according to new census estimates.

The numbers released Monday are part of a first-ever supplemental poverty measure aimed at providing a fuller picture of poverty. It is considered experimental and does not replace the Census Bureau’s official poverty formula, which continues to determine eligibility and distribution of billions of dollars in federal aid for the poor.

Based on the revised formula, the number of poor people exceeds the record 46.2 million, or 15.1 percent, that was officially reported in September.

The biggest increase in poverty rates came from elderly Americans aged 65 or older. It was always a point of pride that the combination of Social Security and Medicare drastically reduced elderly poverty. Under the old statistics, just 9% of seniors were seen as living in poverty. However, because the new formula takes into account out-of-pocket medical costs, particularly rising deductibles and prescription drugs, that number has jumped by 2.7 million, and now represents 15.9% of all seniors, roughly 1 in 6. This is consistent with the rest of the population.

This is an important finding. What we’re seeing is that Social Security and Medicare are NOT ENOUGH to keep millions of seniors out of poverty. This comes at a time when the elites in Washington are trying to find ways to cut Social Security benefits or phase out Medicare. These new poverty statistics should stop that dead in its tracks. But it won’t.

Children and African-Americans saw their poverty rates decrease slightly under the new measurement, mainly because food stamps were taken into account. In other words, a government program was lifting more people out of poverty. One would assume this as an example of government working, but that’s not the case for the deficit hysterics.

David Dayen

David Dayen