New Insurance, Poverty Data to Play in Races

On Tuesday, with the Democratic National Convention in
its second day, the Census Bureau will release two reports detailing
the poverty rate, income and the number of Americans without health
insurance. They are sure to find traction in the presidential race,
where health care remains a large issue.

Predicting numbers is a dangerous business, but the
reports will almost certainly show that there are more uninsured
Americans than there were a year ago, as the rising cost of health care
prompts more employers to cut back on benefits. This fact will give
both candidates a springboard to tout their very different health-care
plans. Among other things, Sen. John McCain would change the tax
treatment of health insurance to help people even if they don't get
insurance from their employer.

One of Sen. Barack Obama's solutions would be to set
up a government-organized insurance marketplace in which private
companies would compete with a medicare-like plan. Given a shaky
economy and rising prices, the rest of the report would seem to benefit
Sen. Obama over Sen. McCain. It is expected to show that the poverty
rate stayed essentially flat from a year ago, and inflation-adjusted
median earnings increased slightly. That would mean that despite six
years of economic expansion, the poverty rate remains higher than it
was in 2000, and middle- and low-income earners are worse off than they
were at the end of the last expansion. Given the state of the economy
today, that's as good as it's going to get for middle-income families.

"For Democrats this is Exhibit A in the failure of
Bushonomics," says Jared Bernstein, an economist at the Economic Policy
Institute, a liberal think tank in Washington, and an informal adviser
to Sen. Obama. "The economy expanded but it did a total end-run around
middle- and low-income families."

The economic picture is likely gloomier even than the
Census report, which covers only 2007, when the economy grew and
unemployment averaged a low 4.6%. Things have worsened since then. The
first half of 2008 showed weak growth and today the unemployment rate
stands at 5.7%. The American Enterprise Institute, a conservative think
tank in Washington, predicts that the poverty rate will increase
slightly, but that today's poverty rate is about half a percentage
point higher than in June of 2007. That means that roughly 1.2 million
additional people are living in poverty now than a year ago.

"There is no doubt that if you are measuring poverty
from August 2007 to June 2008, you'd be talking about a very different
story than what's going to come out on Tuesday," says Douglas J.
Besharov, a resident scholar at the American Enterprise Institute.

Source: Online Wsj