Democrats Pounce on Data Showing Increases in Poverty, Uninsured

For Immediate Release:

August 27, 2004

Contact:Alex Wayne and Kate Schuler

Congressional Quarterly

Both the poverty rate and the ranks of the uninsured increased in 2003 for the third straight year, the Census Bureau said Thursday in a report that gave Democrats new ammunition for their assaults on President Bush’s domestic policies.

The Census Bureau said the number of Americans living in poverty grew by 1.3 million last year, to 35.9 million, while the number lacking health insurance climbed by 1.4 million to 45 million. The nation’s official poverty rate stood at 12.5 percent of the population in 2003, up from 12.1 percent a year earlier. The proportion of uninsured reached 15.6 percent, up from 15.2 percent in 2002.

Both the number of Americans in poverty and the number without health insurance have increased every year since Bush took office, according to Census data.

Bush administration officials and Republican allies noted that neither figure, on a percentage basis, is a record high. The poverty rate in 1982 and 1992 — years following recessions — reached 15 percent. And about 16.3 percent of Americans had no health insurance in 1998, according to Census figures.

Administration officials said the year-old data does not reflect an economy that has improved as a result, they say, of Bush’s tax cuts. For months, the Republican mantra on the economy has been that it is strong and growing stronger.

Commerce Secretary Donald L. Evans, who oversees the Census Bureau, said in a conference call with reporters, “This data is looking backward in time at an economy that was in substantially weaker shape than the strong growth we have experienced since President Bush’s tax cuts began to accelerate economic activity.

“We will continue to work to create a climate of opportunity with an economy that is strong enough to create a job for every willing worker.”

Democrats pounced on the data, offering it as further evidence that Bush’s economic policies have failed all but the wealthiest Americans.

“While George Bush tries to convince America’s families that we’re turning the corner, slogans and empty rhetoric can’t hide the real story,” said Sen. John Kerry, D-Mass., the Democratic presidential nominee. “Family income has fallen $1,511 under George Bush, declining for three straight years. 5.2 million people have lost health insurance under George Bush — 1.4 million people this year alone. 4.3 million people have fallen into poverty under George Bush — 1.3 million this year alone.”

Kerry challenged Bush to weekly debates on health care, jobs and other issues — a challenge the president is sure to ignore.

Republicans have previously criticized the Census Bureau’s methodology, noting that it excludes certain non-cash benefits, such as food stamps and housing assistance, when it calculates poverty rates. But there was little positive in the report for Republicans to seize on.

That didn’t stop some from trying. Rep. Joe L. Barton, R-Texas, issued a statement singling out the calculation that the number of people with health insurance increased by 1 million in 2003 — but ignoring the concurrent calculation that the number without coverage increased by 1.4 million.

“In sum, today’s report contains plenty of good news,” said Barton, who is chairman of the House Energy and Commerce Committee. “More Americans have health insurance than ever before, Medicare and Medicaid are doing the job that taxpayers expect, and America has crossed over the threshold from economic difficulty to healthy future.”

From congressional Democrats came criticism

“It is crystal clear Republican policies have not improved life in the United States for working families,” said House Minority Whip Steny H. Hoyer, D-Md. “Here is what these new numbers tell us that America needs: new leadership.”

Last year, Census officials attributed the rising poverty rate to the 2001 recession. They said Thursday that 2003’s increase was “probably” also related to the recession.

“Both poverty and income are lagging indicators,” said Daniel H. Weinberg, chief of Housing and Household Economic Statistics for the Census Bureau. “Poverty keeps going up after a recession, income down for a period of unknown length.”

Meanwhile, median household income, as adjusted for inflation, was essentially flat last year at $43,318. Whites, blacks and Asians saw no noticeable change, but income fell 2.6 percent for Hispanics to $32,997.

The new figures, sure to be cited often in the closing months of the congressional and presidential campaigns, may complicate the fight in Congress over the two biggest domestic spending bills for fiscal 2005 — for the Labor, Health and Human Services, and Education departments and the Veterans Affairs, Housing and Urban Development departments and Independent Agencies.

Democrats already have condemned funding levels in the two bills as inadequate to meet the needs of social programs such as housing assistance and health care. Both measures await floor action in the House, though they are likely to be rolled into an omnibus spending bill, and perhaps not until after the Nov. 2 elections.

Census officials attributed the decrease in the number of people with health insurance to a decrease in employment-based health plans. Health insurance coverage for employees dropped to 60.4 percent of workers, down from 61.3 percent in 2002. At the same time, the percentage of people covered by government programs — primarily Medicare and Medicaid — jumped to 26.6 percent from 25.7 percent in 2002.

Health Coverage Proposals

Both Democrats and Republicans have been promoting piecemeal approaches to the persistent problem of health coverage for the uninsured.

Bush urges tax credits to help individuals defray premium costs, capping medical liability costs and allowing small businesses to form pools to purchase health insurance, largely free from the regulations that most employer-based plans must meet.

He also has advocated the use of health savings accounts — created by last year’s Medicare overhaul law (PL 108-173) — that allow employees with high-deductible health insurance policies save money tax-free to use for out-of-pocket health costs.

Kerry has proposed a combination of tax credits, employer subsidies and other measures; part of his plan includes government assistance with catastrophic coverage to keep premiums down for companies and employees. He says he would pay for the $653 billion plan by rolling back portions of Bush’s tax cuts.

Democrats also are likely to press for increases in the Republican-drafted Labor-HHS spending bill for community health centers, which received $1.6 billion in fiscal 2004. The centers are located in areas that lack hospitals or medical clinics. In 2000, the centers had 9.6 million users, with 3.9 million of those patients being uninsured.

The House version of the Labor-HHS bill would provide an additional $219 million to the program, the same amount as Bush requested in his 2005 budget.

Senate Majority Leader Bill Frist, R-Tenn., blamed Democrats for obstructing Republican efforts to help expand health coverage.

“And now Sen. Kerry is proposing a prescription for bigger government and higher taxes, rather than consumer-directed, patient-centered, provider-friendly, and affordable health care,” Frist said in a statement released during the Census Bureau news conference Thursday.

Judd Gregg, R-N.H., chairman of the Senate Health, Education, Labor and Pensions Committee, took the opportunity to highlight a series of proposals drawn up by a Republican task force he headed that closely mirrored Bush’s proposals of tax credits, malpractice caps and cost control. “The underlying problem with getting more Americans covered continues to be rising health care costs, fueled by out-of-control lawsuits and government regulation, among other factors,” he said.

But Democrats countered that Bush’s plan would not go far enough to solve the problem. “As more jobs are shipped overseas, American families are both losing health insurance and income. President Bush’s so-called solutions would not help the uninsured and would undermine the health coverage that we do have,” said Rep. Charles B. Rangel, D-N.Y.

Adopting a notably partisan tone, Secretary of Health and Human Services Tommy G. Thompson pinned blame for the rising number of uninsured on Senate Democrats and “the other side’s” refusal to cooperate on Republican measures such as efforts to curtail medical liability lawsuits.

“The big failure is not what’s happening in the administration, but a good share of the problems lie in the fact that individuals in the United States Senate have failed to adopt the president’s proposals,” he said.

Beyond the data included in Thursday’s report, Democrats criticized the timing of the report, noting that it was released a month earlier than usual. They suggested the administration hoped to put as much distance between the report and Election Day as possible.

But Census officials said the release of the official poverty and health insurance figures was timed to coincide with the publication of an annual Census survey of households that yielded similar information.