Rep. Mikie Sherrll (Courtesy of Sherrill’s office)
Rep. Mikie Sherrill wants to recalculate the federal poverty line to reflect states’ varying costs of living so that struggling residents in high-cost states like New Jersey don’t lose out on benefits available to those in more affordable states.
Sherrill (D-11) introduced legislation Friday that would require the Department of Health and Human Services to use a regionally adjusted poverty line to determine eligibility for federal aid programs like the Supplemental Nutrition Assistance Program, Children’s Health Insurance Program, National School Lunch Program, and Affordable Care Act. Currently the federal poverty line is the same for everyone in the continental U.S.
Sherrill, who’s among six Democrats vying for the party’s nomination in June’s primary, said such a change would help the growing number of families struggling to buy groceries and meet other basic needs.
“When you look at the federal support that other states receive, you can see that it’s really skewed (because) the federal rates don’t adjust for cost of living,” Sherrill said. “It really wouldn’t make sense to anyone that people in Alabama get the exact same support as people in New Jersey, because obviously your dollar just doesn’t go as far right now in New Jersey. So this is a key way that we can address that, making sure that we’re boosting eligibility for New Jersey families to account for this higher cost of living.”
New Jersey has the third highest cost of living in the country, behind only California and Washington, D.C., with overall costs that are 9% higher than the national average, according to the U.S. Bureau of Economic Analysis’ annual “regional price parity” assessments.
Sherrill’s bill would require the Census Bureau to develop and publish a new regionally adjusted poverty line that sets poverty thresholds and rates for each state based on the bureau’s regional price parity metrics. Residents in states with regionally adjusted poverty lines lower than the current federal poverty line could continue using the federal poverty line to determine aid eligibility so that no families lose access to assistance.
“We have to make sure that if you’re poor, you have access to getting into the middle class, and that if you’re in the middle class, that you feel confident that that you can stay there,” Sherrill said.
About 10% of New Jersey’s 3.5 million households live in poverty under current federal poverty guidelines. That’s $15,650 in annual income for an individual, $21,150 for a family of two, $26,650 for a family of three, $32,150 for a family of four, and roughly $5,500 for each additional person in a household thereafter.
The United Way of Northern New Jersey, though, says New Jersey families need much more than that to survive, let alone thrive.
The charity created its own poverty measure — dubbed ALICE, which stands for asset limited, income constrained, employed — that they say captures a truer picture of financial hardship because it takes into account regional costs of things like housing, child care, food, transportation, health care, and technology. About half of U.S. states and some federal agencies now use the ALICE threshold in poverty and financial hardship assessments.
Thirty-six percent, or almost 1.3 million, of New Jersey households fall beneath the ALICE threshold and struggle to afford the basics, according to the United Way’s most recent assessment.
“No matter where you live, the federal poverty level is one generic number for the entire country. And the ALICE measures really take into account local wage and local cost of living,” said Kiran Handa Gaudioso, CEO of the United Way of Northern New Jersey.
Sherrill’s bill would task the Government Accountability Office to examine if the United Way’s ALICE poverty measure could be incorporated into determining aid eligibility.
The federal poverty line, which is based on a calculation devised during the Johnson administration in the 1960s, has been a political battleground for years.
President Trump looked to lower it during his first presidency, proposing using a lower inflation measure than the Consumer Price Index, as is now used. That would have lowered income eligibility cutoffs, reducing aid for potentially millions of people or booting them off of assistance altogether.
And in December 2023, a California Democrat introduced legislation similar to Sherrill’s bill. Rep. Kevin Mullin’s Poverty Line Act got 20 co-sponsors, including Rep. Bonnie Watson Coleman (D-12).
Both efforts failed. Mullin’s bill never made it out of committee.
Sherrill hopes she’ll have better luck, even though Republicans are newly in control of all three branches of government.
She was in Congress during the first Trump presidency, when there was “a level of chaos that’s really difficult to navigate.”
“He makes a lot of edicts, and you never know which ones he’ll follow through on, which ones his party will adopt,” she said.
But Republicans in the House have the narrowest majority in nearly a century, Sherrill pointed out. Tweaking the federal poverty line is an affordability issue that should have bipartisan appeal, she said.
“I don’t think that they will be able to do many of the draconian cuts that Trump or the Freedom Caucus want to do, whether it’s cutting deeply into Medicare, Social Security, so that Trump can execute his tax cuts for wealthy people,” Sherrill said. “I do think that there are areas of common ground that we can find across the aisle and build a broad coalition of support and push the Trump administration to adopt this. That’s what I’m hoping to do.”
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