The economy: Nothing to remain silent about

Nearly two months have passed since President Bush hosted an “economic summit” – a flop the People’s Weekly World headlined as “all show and no go.” As events have since shown, we may have understated the case:

• A Sept. 24 release by the Census Bureau reveals that more than 1.3 million people in 400,000 families were added to the ranks of the “officially poor” in 2001, bringing the total to almost 33 million. (A single person is counted as poor if he/she had money income of less than $9,214 last year. A person over 65 is poor if he/she had cash income of less than $10,715. The poverty level for a family of three is $14,128 and for a family of four, $18,104.)

• Less than a week later, the Census Bureau released another report showing that the number of Americans without health insurance increased by 1.4 million last year and now stands at 41.2 million, 8.5 million of them children under age 18. According to the report, more than one-fifth (21.3 percent) of poor children and 30.7 percent of all poor people were without health insurance during all of 2001.

• More than one million unemployed workers have run out of regular state-provided unemployment benefits and the extended federal benefits passed by Congress last March.

• Last year median household income fell by 2.2 percent, from a little over $43,000 to slightly more than $42,000. Since June, the value of the stock and mutual fund holdings of working families has declined by another $900 billion.

• Personal bankruptcies are at all-time highs, with more than 1.5 million individuals filing for bankruptcy in the 12-month period ending in June 2002, while more workers faced foreclosure on their home mortgages than at any time since 1972.

• Even more troubling, state governments, which posted nearly $40 billion in total budget deficits in fiscal year 2002, project deficits of $57 billion in the next fiscal year. At least 18 states have cut back spending for Medicaid, a situation the National Governor’s Association warns will continue to worsen, with Medicaid and the Children’s Health Insurance Program being hit even harder.

There’s no other way of putting it: Working families and the nation as a whole are facing an economic crisis that is, as the AFL-CIO says, nothing to cheer about – or to remain silent about either. But it does explain why President Bush is hyping war with Iraq as the defining issue in this year’s elections – and why we can’t let him get away with it.

The economic crisis is a national crisis and requires national solutions, and the November elections will go far in determining the scope, direction and nature of those solutions: Will it be an overhaul of the unemployment system, or further tax breaks for the rich and corporations? Will there be a prescription drug plan under Medicare, or some kind of give-away to the pharmaceutical companies? In a word, the 2002 elections are a plebiscite on the future of the nation – on whether it is the duty of government to provide for the general welfare, or the welfare of General Motors, General Electric or General Mills.

As a bare minimum Congress should:

• Provide funding for another round of extended unemployment benefits;

• Enact meaningful reforms to control the cost of health care, beginning with a prescription drug benefit under Medicare and legislation closing loopholes that enable pharmaceutical companies to keep generic drugs off the market;

• Pass legislation giving workers a say in how 401(k) pension plans are managed and revoking special privileges for corporate executives;

• Amend bankruptcy laws to put workers at the front of the line of those owed money in bankruptcy proceedings when their employer goes belly-up;

• Provide financial relief to enable state governments to maintain and expand their safety nets in the face of revenue shortfalls;

• Raise the minimum wage; and

• Abandon any proposal to privatize Social Security, either in whole or in part.

Action on these fronts will take the worst sting out of the crisis and provide time to draw up the next battle plan. But one thing is certain: None of them will see the light of day if the Republican right wing regains control of the Senate on Nov. 5. It’s as simple as that.

The author can be reached at fgab708@aol.com





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Number of uninsured children increases



A Sept. 29 report by the Census Bureau says the number of Americans without health insurance increased by 1.4 million last year and now stands at 41.2 million, 8.5 million of them children under age 18. Nine out of ten uninsured children are from families with working parents.

According to the Census Bureau nearly one-eighth (11.7 percent) of all children were uninsured for all of 2001, as were more than one-fifth (21.3 percent) of poor children. The situation could have been even worse: Had it not been for the federal/state-funded Children’s Health Insurance Program (CHIP) two million more children would have been added to the rolls of the uninsured.

But even as the need grows, the federal government and the states are less able to provide aid because their revenues have shrunk in the recession. Unless Congress acts – and acts soon – to rescind the billion-dollar cuts in federal funding for CHIP funding for fiscal years 2002 through 2004, the number of children served by CHIP will fall by 900,000 by 2006.

States lost even more CHIP money when FY 2003 began on Oct. 1. At that time the $1.2 billion “surplus” that had accumulated when states – including Texas under Gov. George Bush – failed to appropriate the necessary matching funds, reverted to the Treasury and can be used for other purposes unless Congress preserves it for child health care.

Although there are several reasons for the increase in the uninsured, most lost their coverage because of being laid off, resulting in one million children being dropped from employer-sponsored health insurance in 2000. These cuts account for the fact that the number of children covered under Medicaid or CHIP rose by nearly 1.2 million.

Half to three-fourths of all uninsured kids are eligible for Medicaid or the Children’s Health Insurance Program. In many cases, parents don’t know their children could qualify, in part because few states have an aggressive approach to acquainting parents with the program.

Compared with insured children, children without insurance are:

• More than three times as likely to lack a regular source of health care;

• More than four times as likely to have delayed medical care because of cost;

• More than three times as likely to lack necessary dental care; and

• More than twice as likely to go without needed prescription medications.

– Fred Gaboury





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Poverty up, income down



A recent Census Bureau report showed poverty increasing (up 1.3 million to 32.9 million), median household income falling by $900 and the share of the national household income going to the top five percent of the population, reaching its highest level ever while the shares going to the bottom 60 percent fell to all-time lows.

Since the increase in poverty and the decline in median income are the result of the recession, poverty is expected to increase more – and income to decline more – as unemployment is expected to remain at present levels until the second half of 2003.

Furthermore, more than one million workers exhausted all of their unemployment benefits during the first eight months of 2002 and, to make matters worse, several states instituted cuts in programs for low-income households as part of an effort to close swelling budget deficits.

Other findings from the Census Bureau report:

• Both the percentage of people who are poor (i.e., the poverty rate) and the number of people who are poor increased in 2001. Although the increase in the poverty rate for African-American persons was not statistically significant, the increase in the poverty rate for African-American families (from 19.3 percent to 20.7 percent) was.

• The depth, or severity, of poverty increased. The average amount by which those who were poor fell below the poverty line rose to $2,707 per poor person in 2001, the largest “per person poverty gap” since record-keeping began in 1979.

• The average amount by which poor children fell below the poverty line also increased and reached the highest point on record. These data indicate that the principal reason poor children were poorer in 2001 is that government safety net programs did less to reduce the severity of poverty last year than in any other year since 1979.

• Median household income declined by $900 overall, with much larger declines among African-American households ($1,025) and among Asian and Pacific Islander households ($3,678).

Other census data show a similar pattern:

• The average income of the top five percent of the population rose by $1,000 in 2001, from $259,445 in 2000 to $260,464 in 2001. The average income for every other income category fell.

The share of the national income that the top five percent of the population received reached its highest level on record in 2001. By contrast, the shares going to the bottom fifth (which received just 3.5 percent of the national income last year), the next-to-the-bottom fifth and the middle fifth fell to record lows.

Source: Center for Budget Policy and Priorities