Number of uninsured drops; poverty holds steady

[August 27, 2008]  WASHINGTON (AP) -- The number of people without health insurance fell by more than 1 million in 2007, the first annual decline since the Bush administration took office, the Census Bureau reported Tuesday. Incomes edged up for the middle class while poverty held steady.

The numbers represent a scorecard on President Bush's stewardship of the economy at the kitchen-table level. But they only went as far as the end of last year, before the current economic downturn started gathering force. Although there were some bright spots, it was a mixed picture.

While the overall poverty rate held steady at 12.5 percent, poverty did rise among some groups. Latinos, children and the foreign-born -- demographic categories that overlap considerably -- experienced significant increases.

And while the number of uninsured dropped to 45.7 million, down from 47 million in 2006, it was largely because more people were covered through government programs.

For the middle class, the median -- or midpoint -- household income rose to $50,233, a modest increase of $665 from the previous year, although it was the third consecutive annual rise.

"The gains that occurred last year were welcome, but unfortunately, they are too little, too late," said Jared Bernstein, a senior economist with the liberal Economic Policy Institute in Washington. "The median household is no better off now than they were back in 2000, despite their deep contribution to the nation's economic growth during this period."

For example, after adjusting for inflation, last year's median household income of $50,233 was not significantly different from the figure for 2000, which was $50,557. "The American work force is baking a bigger economic pie, but the slices haven't grown at all," Bernstein said.

But White House spokesman Tony Fratto said the household income and health insurance numbers are definitely good news.

"It's clear that the long period of strong economic growth we were in had a positive impact for most Americans," Fratto said. "Obviously today we're dealing with higher energy prices and the downturn in housing, but the economy is showing enough resilience to keep growing in spite of those challenges."

Republican candidate John McCain distanced himself from the White House response, saying in a statement, "Too many of our neighbors are living in poverty, too many can't find a job, and too many are living without health insurance." The Arizona senator pledged tax cuts and policy changes to make health care more affordable.

Some analysts said that global trends, not just administration policies, are shaping the economic fortunes of individual Americans.

"Presidents like to take credit when things go well, and therefore they should get the blame when things don't go well, but there are lots of things driving this, not all of which are home grown," said Douglas Besharov, an expert on poverty at the business-oriented American Enterprise Institute. "The oil shocks are not. And globalization, which on balance is good for the country, leaves winners and losers."

The Census report was immediately swept up into presidential politics. Democratic presidential candidate Barack Obama's campaign fired off a statement blasting what it called the "failed record" of Bush's economic policies and promising "bottom up economic growth" if the Illinois senator is elected.

Overall, the Census found 37.3 million people living in poverty in 2007, of which 13.3 million were children. The poverty level for a four-person family in 2007 was $21,203. Among age groups, seniors had the lowest poverty rate at 9.7 percent, while children had the highest at 18 percent. The poverty rate for 2006 was 12.3 percent, but the change in 2007 was not statistically significant.

The welcome news on health insurance coverage was tempered by the continued erosion of private coverage paid for by employers and individuals. Government programs -- such as Medicaid for the poor -- picked up the slack, resulting in the overall reduction in people without health insurance.

The uninsured rate also fell to 15.3 percent, down from 15.8 percent in 2006.

"Private insurance has been falling (and) public insurance definitely went up," said David Johnson, who oversees the Census division that produced the statistics. The number of uninsured children also fell in 2007, after an increase in 2006 that had interrupted years of progress in getting more kids covered.

But seen over a longer period of time, the health insurance numbers are not reassuring. The number of uninsured -- and the rate -- are higher today than they were at the outset of the Bush administration in 2001. That year, 39.8 million people, or 14.1 percent, were uninsured.

"The number of uninsured is considerably higher than when the president took office, and in each year since then, employer-sponsored insurance has continued to diminish," said Ron Pollack, executive director of Families USA, a liberal group advocating coverage for all.

Stuart Butler, a top health policy expert at the conservative Heritage Foundation, said employers are scaling back on providing health care coverage because costs keep rising.

"I think it's more like we are seeing a tide that I don't think anybody can easily fix, particularly in the small-business sector," said Butler.

The Census report also underscored the growing role of women in the workplace, finding the gap between the earnings of women and men has shrunk to an all-time low.

In 2007, women working full-time, year-round averaged 78 percent of what men earned. But the gender gap varied considerably depending on the industries and types of jobs involved. And the good news for women may not necessarily be a positive for family incomes. The Census found that a major reason the gap is shrinking is that men's earnings have been fairly flat.

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On the Net:

Census report: http://www.census.gov/

[Associated Press; By RICARDO ALONSO-ZALDIVAR]

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