Last November, the editors of the Wall Street Journal called them “Lucky Duckies” — Americans too poor to pay income tax. Lucky or not, there were a lot more of them around last year, according to a U.S. Census Bureau report released on Friday. That news was followed by another census report showing that the number of Americans without health insurance has risen, too. This is bad news, not only for the poor and uninsured, but also for President Bush and his reelection hopes.
The poverty report revealed that median household income slipped by $491, or 1.1 percent, to $42,409, while poverty climbed from 11.7 percent in 2001 to 12.1 percent last year. That translates to a 1.7 million increase in people who fell below the poverty line in 2002 — bringing the figure to 34.6 million, 12.1 million of which being children.
And, from the looks of things, Bush’s much-touted economic plan isn’t likely to help impoverished Americans, according to the Christian Science Monitor:
“Nor is today’s recovery, now showing signs of picking up speed, likely to reduce poverty quickly. Rather, poverty is probably up again this year, says Robert Greenstein of the Center on Budget and Policy Priorities (CBPP), a Washington think tank. That’s because the number of long-term unemployed has risen sharply
Mr. Greenstein, though, holds that ‘misplaced priorities by Congress and the president are making the increase in poverty larger than it needs to be.’
Unemployment benefits for the long-term jobless are worse than after the slump in the early 1990s, and low-income working families have been excluded from the increased child tax credit benefits that went to better-off families this summer, he notes. The federal minimum wage has not been increased since 1997.”
In the meantime, says In These Times, Bush “continues to shred an already tattered social safety net”:
“The Department of Health and Human Services, for instance, recently announced the continued decline in funding of Temporary Assistance for Needy Families (TANF), which provides assistance to ease economic hardship and help parents find and keep jobs. Many of the families targeted by TANF are those with the young children who now are more likely to be living in poverty.”
Democratic presidential hopefuls are going to hammer Bush with these statistics, but the degree to which administration policy is responsible for growing poverty is an open question. (Though, at a guess, you’d have to say tax cuts for the rich probably aren’t helping the family of four living off $18K a year.)
The Kansas City Star columnist Jerry Heaster suggests that the census figures are misleading, and can be used to advance very different political agendas:
“Every other year the poverty numbers dovetail conveniently with the election season and thus can be used to either establish bragging rights for incumbents or buttress calls for regime change by the challengers.
If the headline poverty picture fails to improve, it won’t be because the economy isn’t doing well. Growth over the next four quarters promises to be better than the past four quarters. The problem for the Bush administration will be that the numbers reported next year will be for 2003. The labor market’s continued weakness this year will probably depress income gains, and any statistical gain will be minimal.
Thus, it appears as if the Democrats will be the main beneficiaries of the 2003 poverty data, even though the numbers aren’t that good a gauge of relative prosperity, or lack thereof.”
Washington Post columnist E.J. Dionne says globalization is probably a big factor in the mounting poverty problem:
“Consider the Census Bureau’s report for 2002 showing that U.S. household incomes had declined for the third year in a row and that the number of Americans living in poverty had increased by 1.7 million in a year. The old manufacturing states — including Michigan, Illinois, Ohio and Missouri — were among those hit the hardest.
The economists reassure us that the poverty rate is a “lagging” indicator and that a robust recovery will start lifting people up again. But will it? Is it not just as plausible to worry that the flight of jobs to China and elsewhere, courtesy of globalization, has combined with big improvements in productivity to create an economy that leaves many of our fellow citizens behind even in flush times?
The Institute for Supply Management, which keeps some of the best numbers on manufacturing, pleased the stock market earlier this month with a report showing that economic activity in manufacturing grew in August, as it had in July. But its manufacturing employment index actually fell, and remained below the 50 percent break-even point for job creation for the 35th consecutive month.”
Whatever the deep causes, the lucky duckies are hurting. According to the The Tullahoma News, their combined after-tax income equals that of America’s richest one percent:
“After two years of seeing their wealth decline, the 400 richest Americans last year got 10 percent richer. They now hold $955 billion in assets — about 8.8 percent of the gross national product.
The Congressional Budget Office last week announced that in the year 2000, the famous “richest 1 percent” of Americans had the same amount of after-tax income as the poorest 40 percent combined. That’s 2.8 million people with the same after-tax income as the poorest 112 million. The gap between the richest 1 percent and the poorest 40 percent more than doubled between 1979 and 2000.
The gap may be even wider now. Since those figures were compiled, Bush has instituted his tax cut program, 42 percent of the benefits of which will accrue to the richest 1 percent, according to analysis by the Tax Policy Center. But why dwell on the negative? There are more “Lucky Duckies” than ever before … Those 32 million low-income Americans don’t even have to pay income taxes. The rich get richer, and the ducks get luckier?”
The New York Times, citing budget specialists who say the coming decade could very well be “the most fiscally irresponsible in our nation’s history,” argues that poor Americans aren’t as much of a priority as the coming elections:
Republican lawmakers are now scurrying to cobble together some sort of job program — an effort that seems aimed more at the voting next year in key electoral battlegrounds than at the 12 out of 100 impoverished Americans. It is hard to see these Americans as a priority of Mr. Bush in a year in which he failed to prod Congressional Republicans to reverse the cruel denial of new child-care tax credits to low-income families.”
Just four days after it released its poverty report, the Census Bureau also reported that 2.4 million more Americans are without healthcare — bringing the number of uninsured up from 14.6 to 15.2 (that’s 43.6 million people). The growing ranks of the unemployed can’t afford health insurance, and many who still have jobs are losing their coverage because their employers need to cut costs.
The increase in the number of uninsured, however, isn’t just another depressing statistic, writes The Times, it is a reality that hits close to home for many Americans:
“In such times, the plight of the uninsured becomes more of a middle-class issue, more of a symbol of real close-to-home insecurity and thus more politically potent, advocates and experts say. Until now, ‘it’s mainly been an issue of altruism for a discrete and disadvantaged population,’ said Ron Pollack, executive director of Families USA, a liberal consumer group.
The problems in the health care system are related to nearly every issue bubbling domestically, from unemployment to the fiscal crisis in the states. Moreover, even if employment begins to pick up Ñ and new estimates will be released on Friday — nobody is expecting a speedy turnaround in the problems of health care costs and coverage.”
The White House has got to be praying for that tax cut stimulus to kick in.