The programs discussed in this report are very diverse. The various programs we discuss were created at different times, to serve different populations, and in response to different policy issues (see box on next page). Programs also vary greatly in terms of how they are structured and funded. In addition, programs are administered through a varying combination of federal, state, and local agencies, and sometimes private organizations. Some programs require state or local agencies to contribute a share of nonfederal funds, while others are entirely federally- funded. Federal funding structures for low-income programs also vary. For instance, programs may be funded through program authorization acts (mandatory spending) or through appropriations acts (discretionary spending). Spending for these programs may be indefinite (in that there is no pre-determined ceiling and federal payments will be made for all eligible recipients for eligible expenses) or definite (in that the law limits the amount of federal spending). Tax expenditures—such as tax credits, deductions, or exclusions—are generally measured as the estimated reduction in tax revenue and are generally considered separately from other federal spending, with the exception of some refundable tax credits in which credit in excess of tax liability results in a cash refund. Examples of Low-Income Programs Established over Time 1930s- Great Depression and the New Deal: Major social insurance programs (not discussed in this report) were created to protect workers against old age and unemployment. Assisted housing programs, such as public housing, also started during this time. 1960s- The War on Poverty: Various programs were created aimed at educating low-income children, youth, and adults to help address the causes of poverty (e.g., Head Start, Job Corps, aid to help low-income students in elementary and secondary schools). The Food Stamp Program (now known as the Supplemental Nutrition Assistance Program (SNAP)), which had been a pilot program, was made permanent. Medicare (another social insurance program) and Medicaid were also established. 1970s- Welfare reform proposed, EITC created: Due to rising caseloads of recipients of Aid to Families with Dependent Children (AFDC), which provided cash assistance to low-income families, reform was proposed, but did not occur. However, major changes to other programs occurred. Aid to low-income individuals who were aged, blind, or had a disability evolved into a federally-run program: Supplemental Security Income. Section 8 rental housing assistance was established, as was the Earned Income Tax Credit (EITC). 1980s- Tax reform and promotion of work: EITC and Medicaid were expanded. The Tax Reform Act of 1986 removed federal income taxes for many of the working poor, and the Family Support Act of 1988 was passed to encourage work among AFDC recipients. 1990s- Decentralization and welfare reform: AFDC was replaced with Temporary Assistance for Needy Families (TANF), a block grant to states that emphasizes work and time-limited cash assistance and gives states wide discretion on how to use TANF funds, including for various noncash services. 2000s- Great Recession, federal stimulus, healthcare reform: In response to the recession, the American Recovery and Reinvestment Act of 2009 expanded federal spending for low-income aid, particularly for SNAP and Medicaid. The Patient Protection and Affordable Care Act expanded Medicaid eligibility (although a Supreme Court decision subsequently made Medicaid expansion an option for states) as well as established new refundable tax credits for lower-income households to subsidize their purchase of private health insurance on health insurance exchanges. The official measure used today to provide information on how many people are “in poverty” in the United States was developed in the 1960s, based on the cost of food at that time. The official poverty thresholds— the income thresholds by which households are considered to be in poverty depending on their size—are updated annually by Census to reflect current prices. HHS uses the official poverty thresholds to update the “federal poverty guidelines” each year, which are the basis for determining financial eligibility or funding distribution for certain low- income programs. The official poverty measure has not changed substantially since it was developed, and concerns about its inadequacies resulted in efforts to develop a new measure starting in 1990. For instance, the threshold for the official poverty measure (the income level that is used to determine who is “in poverty” each year) is based on three times the cost of food and does not take into account the cost of other basic necessities, such as shelter and utilities. Additionally, in determining a household’s income, the official measure considers cash income, but does not include additions to income based on the value of noncash assistance (e.g., food assistance) or reductions based on other necessary living expenses (e.g., medical expenses or taxes paid). A panel on poverty was established by the National Academy of Sciences and, later, an interagency technical working group suggested ways a new poverty measure could address some of these concerns. Based on these suggestions, Census, with support from the Bureau of Labor Statistics, developed the SPM in 2010. Each year since, Census has released annual poverty statistics on the SPM along with the official measure. The SPM did not replace the official measure, which is still used for determining federal poverty guidelines that could affect eligibility for some programs. Instead, the SPM is primarily used as a research measure, designed to provide information on economic need at the aggregate level, nationally or within subpopulations or areas. The SPM differs from the official measure in various ways. In defining a family unit that shares resources, in addition to related individuals, the SPM household includes unrelated children cared for by the family (such as foster care children) and cohabiting unmarried partners (see table 1).The SPM also defines the threshold of need differently from the official measure. Also, in determining if a family has sufficient resources to meet necessary living expenses, it looks more holistically at a family’s resources and expenses (see fig. 1). Individuals or families whose household incomes are below 100 percent of the SPM threshold are considered to be in poverty based on current levels of need. We identified 82 federal programs, including several tax expenditures, that target low-income individuals, families, and communities to help them meet basic needs or provide other assistance. For 78 of these programs, fiscal year 2013 federal obligations totaled about $742 billion. This amount includes federal obligations for two tax expenditures: the ACTC and the refundable portion of the EITC.expenditures that assisted people with low income, plus the nonrefundable portion of the EITC, totaled an estimated $14 billion in reduced federal tax revenues for fiscal year 2013. Four additional tax These programs include those sometimes referred to as “public assistance” programs or “means-tested” programs, but are broader and more diverse than those terms imply. For instance, while many of the programs, often referred to as public assistance or means-tested programs, help people with low incomes meet basic needs (income support, health care, food, housing, or utilities), some of the programs in this report provide other types of services, such as child care, services for children in foster care, or support services for older individuals. Other programs provide education assistance or employment and training support with the goal of helping disadvantaged individuals better independently support themselves. (See app. II for information from our survey on each program’s purpose and benefit or service provided.) Federal obligations for these low-income programs were concentrated in a few large programs (see fig. 2). Medicaid accounted for 39 percent of the fiscal year 2013 federal obligations for the programs we reviewed,followed by SNAP, the refundable portion of the EITC, and SSI. In total, these four programs comprised almost two-thirds (65 percent) of federal low-income obligations in fiscal year 2013 or about $480 billion. For some programs, states or other entities also contribute funding, which means billions more in nonfederal funds are spent on such programs. For example, state expenditures for Medicaid were $194 billion in fiscal year 2013, accounting for around 40 percent of total Medicaid expenditures. For TANF, state expenditures totaled almost $15 billion in fiscal year 2013, accounting for about 47 percent of total expenditures for the program. Social insurance programs, including Social Security Old-Age and Survivors Insurance (Social Security) and Medicare, are not included in the programs we reviewed because they are not targeted solely to those with low-income. These programs are generally financed by contributions from workers and employers, and eligibility for benefits is determined, at least in part, on the basis of an individual’s work history. These programs are intended to more universally protect workers from lost wages and related benefits due to retirement, disability, or a temporary period of unemployment. Some of these programs are very large. For example, in fiscal year 2013, Social Security alone totaled $674 billion in obligations, which is equal to about 90 percent of the total in obligations for the 78 low-income programs (see fig. 3). The 10 largest low-income programs in terms of federal obligations accounted for about $600 billion in fiscal year 2013 (82 percent of obligations for 78 low-income programs) and served millions of people (see table 2). However, according to our survey, while these 10—and most of the other 72 programs—collect some information on numbers served, programs varied in how they track this information, making it difficult to compare information across programs or to know precisely how many people are helped overall. (In the next section, we provide an estimate of the overall number of recipients in selected programs.) As also shown in table 2, agencies reported the number served using different units (such as individuals, households, or tax returns) and a variety of time periods (annual, monthly; fiscal, calendar, school year; cumulative or point-in-time) for each program.