A trickle down

September 01, 2004

THE LATEST income, poverty and health insurance data from the Census Bureau belie the Bush administration's insistence that the president's tax cuts for the well-off would trickle down to benefit the whole nation.

First of all, if the administration has been taken with the notion that a rising tide raises all boats, that obviously works both ways. And for too many American families, the economic tide has been receding since President Bush took office.

From 2000 through the end of 2003, Census data released last week show, real median household income has fallen, poverty has risen, and so has the number of Americans without health insurance.

Are Americans better off than four years ago? The unhappy answers from the 2003 census:

We're losing ground: Median household income after inflation fell 3.4 percent (or more than $1,500) from 2000 through 2003.

After a sharp drop in poverty in the 1990s, more are becoming poor: In each of the first three years of Mr. Bush's presidency, the number and percentage of Americans living below the poverty line ($18,810 for a family of four) has grown.

Poverty is running deeper. Most of the growth in poverty in 2003 was among children. More than two-thirds of all poor families included at least one person who worked. And a record 43 percent of the poor lived in extreme poverty - with incomes below half of the poverty line.

More lack a safety net. Those without health insurance grew to 45 million, up more than 5 million since 2000 - a result of declining employer-based insurance, now at the lowest level since 1993, and the continued limited availability of publicly funded insurance for low-income workers.

The already wide income gap between well-off Americans and everyone else got wider in 2003. The top 20 percent received virtually half of all income, the second-highest share on record. The middle 60 percent held to its third-smallest share on record. And the bottom 20 percent fell to its lowest share ever, just 3.4 percent.

That disturbing rise in income disparity is sharply reflected across Maryland. The state is the second-wealthiest in the nation, and three of its counties - Howard, Montgomery and Anne Arundel - are among the country's 18 richest. But in 2003, Baltimore's median income remained stalled at less than half that of Maryland's, making it the nation's 18th-poorest city. It's easy to see how the gulf between the city and the rest of the state lowers the quality of life for all, and that's no less true for the whole country.

Under President Bush, indeed, the trickle down has only been a trickle. Even with stronger growth this year, incomes still aren't picking up. In fairness, of course, Mr. Bush inherited a recession - and then came 9/11, corporate scandals and wars. But the core of his job-creation efforts - costly tax cuts favoring the well-off - have delivered little bang for the buck.

Temporary steps aimed at aiding low- and middle-income families - including a payroll tax holiday, a one-time family tax cut, an extension of unemployment benefits and state fiscal relief - would have cost the same in the short run but created 2 million more jobs by now, according to a recent study by Mark Zandi, head of Economy.com. But in the name of job creation, Mr. Bush's real focus was reshaping the tax code. As a result, much of the nation has suffered - even as the long-term costs continue to mount.

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