On Friday, we blogged the U.S. Census Bureau’s new release, The Effects of Government Taxes and Transfers on Income and Poverty: 2004.  Saturday’s New York Times has an interesting article about the ensuing controversy, Report on Impact of Federal Benefits on Curbing Poverty Reignites a Debate, by Erik Eckholm:

A brief report this week from the Census Bureau, highlighting how welfare programs and tax credits affect incomes among the poor, has fanned the politically charged debate on poverty in the United States and how best to measure it, with conservatives offering praise and liberals saying it underplays the extent of deprivation.

The report . . . found that when noncash benefits like food stamps and housing subsidies were considered, as well as tax credits given to low-income workers, the share of Americans living under the poverty line last year was 8.3%. This is well below the 12.7% of Americans that the government officially says lived below the poverty line in 2004, using the conventional methodology that only counts a family’s cash income.

Conservatives have long maintained that poverty levels are overstated, and the new report was hailed by Douglas Besharov, an expert on social policy at the American Enterprise Institute, a conservative research group in Washington, as a much needed corrective….

But liberal scholars said the report presented a misleading and partial picture, highlighting uncounted resources available to many poor people but ignoring, on the other side, many new expenses and hardships they face in a changing economy. "Yes, the E.I.T.C. means a family has more money, and that’s good," said Timothy Smeeding, an economist at the Maxwell School of Syracuse University, referring to the Earned-Income Tax Credit, which can pay thousands of dollars to a low-income worker. "But going to work can also mean high new expenses for travel and child care, for example, and these aren’t included."