U.S. poverty formula strained, some say

WASHINGTON, Sept. 2 (UPI) -- Measuring the poor in the United States is done with a 40-year-old formula that requires an overhaul, some Washington insiders said.

U.S. Rep. Jim McDermott, D-Wash., said he plans to introduce a bill that would require the government to update the formula developed in the 1960s, The New York Times reported.

A recent U.S. Census Bureau report said the U.S. poverty rate remained stagnant from 2006 to 2007 at 12.5 percent with the median household income rising 1.3 percent to $50,233.

U.S. President George Bush said the report "confirms that more of our citizens are doing better ... with continued rising incomes and more Americans pulling themselves out of poverty."

However, the formula for determining poverty was devised when U.S. families spent about 1/3 of their after-tax income on food, a figure that has dropped to 1/7, while other costs, such as daycare, transportation and healthcare have risen, the Times reported.

A New York City formula, scheduled for a review at the U.S. Conference of Mayors in Los Angeles, accounts for new costs and for federal assistance, the report said. With the new formula, the figure for those in extreme poverty in New York declined, although the poverty rate rose from 19 to 23 percent, the Times said.