So food stamps, Medicaid, Medicare, and subsidized housing, a substantial part of the welfare state, don't count in measuring people's income. And those items, especially food stamps, are a particularly large part of the poor people's income.
That makes Danziger's quote particularly striking. [Of course, I'm assuming that she quoted him correctly. If she didn't, then my apologies to Professor Danziger.] Here are the next two paragraphs in Ms. Yen's piece:
"Safety net programs such as food stamps and tax credits kept poverty from rising even higher in 2010, but for many low-income families with work-related and medical expenses, they are considered too 'rich' to qualify," said Sheldon Danziger, a University of Michigan public policy professor who specializes in poverty.
"The reality is that prospects for the poor and the near poor are dismal," he said. "If Congress and the states make further cuts, we can expect the number of poor and low-income families to rise for the next several years."
Contrary to Professor Danziger, food stamp programs did not keep the U.S. Census Bureau's measure of poverty from rising even higher. Indeed, even if the effect of food stamp programs on the willingness to earn income is small, any incentive effect at all means that food stamp programs made measured poverty higher. And if the feared cuts that Professor Danziger is referring to are cuts in food stamps [I don't know if that's what he had in mind], those cuts will not cause the number of poor and low-income families to rise.