The Census Bureau released its annual report on poverty, income, and health insurance in the United States and the news is not good. The number of Americans living in poverty rose for the forth year in a row as 1.1 million more Americans were officially poor in 2004 than the year before. The data shows almost 1 in 5 American children live in poverty.

In additon, almost 1 million more Americans lacked health insurance, primarily due to a decrease in employer-provided health care. Unfortunately for working families, total household income remained stagnant and income for men and women employed in full-time jobs decreased significantly. This is the first time ever that household income has failed to increase for five straight years.

The Census data give just a glimpse of the reality being faced by more and more working Americans who are being forced to live without health insurance and have less money with which to purchase their own as employers increasingly focus on their profit margins at the expense of their workers.

The current economic policies are not working for most Americans - only those already well-off. The decline in indicators of poverty and income for the fourth straight year should be a wake-up call for members of Congress and the administration who are seeking to make those policies permanent. It is time for a change.

Read More:
> Census Data Full Report
> Income Stagnated and Poverty Rose in 2004, Census Shows
> Coalition on Human Needs Release on Census Poverty Data
> Economic Recovery Failed to Benefit Much of Population in 2004

The Labor Department released economic data today showing consumer prices rose significantly in July by 0.5 percent. The rise was mostly driven by rising energy and food costs, particularly the record high prices of oil.

In a separate release, the Labor Department also reported workers' earnings (adjusted for inflation) declined by 0.2 percent in July.

This combination is bad news for average Americans, many of whom are struggling with mounting personal debt, living from paycheck to paycheck, and saving very little money. Not only are Americans paying more for necessities like food, heating and cooling costs, and gasoline, but they have less money with which to do so.

NY Times: Fuel Costs Drive Consumer Prices Slightly Higher in July

About a month after the White House released its highly misleading and overly optimistic budget projections, the Congressional Budget Office (CBO) released their projections today.

The CBO report projects a $331 billion deficit for FY05, a $33 billion reduction since they released an initial estimate earlier this year in March. CBO also has increased their estimate of the total deficits over the next ten years by more than $1.1 trillion to $2.1 trillion. These estimates are much more worrisome than OMB projections released last month as CBO and OMB differ over the ten-year deficits from 2006 - 2015 by more than $600 billion.

Unlike the OMB numbers, CBO finds very little reason to be optimistic about the future health of the federal government. They write, "Although the deficit for 2005 is lower than previously expected, the fiscal outlook for the coming decade remains about the same as what CBO described in March." In March, CBO described a very dark future if current policies are continued.

This CBO report casts further doubt on administration claims that their economic policies are working to spur strong economic growth and will continue to shrink deficits. CBO has confirmed what many private analysts have reported - that the recent jump in federal revenues are due to short-term and temporary factors that are unsustainable and that over the long-term, the country still faces many large and difficult fiscal challenges. CBO concludes, "Over the long-term, then, growing resource demands...will exert pressure on the budget that economic growth alone will not eliminate."

Most strikingly, the CBO report states that if the tax cuts from the administration's first term are extended (with the exception of policies related to the alternative minimum tax), as President Bush has been strongly advocating, deficits over the next decade would increase $1.6 trillion on top of their current projections.

The Senate Budget Committee's most senior Democrat Kent Conrad (D-ND) believes the nation needs a "serious fiscal wake-up call" if we are to correct the long-term budget shortfalls that "threaten our economic security." It's time for President Bush to be straight-forward with the American people and begin an honest conversation about adopting alternative policies that will return the country to a sound and sustainable fiscal foundation.

Earlier this week, Secretary of the Treasury John Snow conceded the slowly-progressing economic recovery has not benefited all Americans equally. Snow said, "The idea...is to explore the things that produce broad-based prosperity and one of the things we know is that less educated people have seen their incomes and wages grow more slowly."

Snow's comments come amid slightly more positive economic indicators and increasing business optimism about the economy, but also in conjunction with the release of two reports showing the recovery has been anything but good for most Americans. This week the Center on Budget and Policy Priorities released a report comparing this economic recovery with previous recovery periods and finds that not only is this one less robust but that it is much more unevenly distributed, with corporate profits reaping nearly all the benefits at the exclusion of the labor market.

In addition, the Congressional Budget Office released a background paper examining employment during and after the economic recession of 2001. Among its interesting findings, the CBO writes, "both the magnitude and persistence of the decline in the labor force [participation rate] during the past several years are unprecedented."

July's employment numbers released by the Bureau of Labor Statistics (BLS) showed that the nation's employers have picked up their hiring pace, as payrolls expanded by 207,000 jobs. This was significantly better than both May and June's numbers and bumped the average monthly growth rate for jobs to 191,000 in 2005.

There remain many problems with the economy and job market as we continue to slowly move through this economic recovery. First, almost all of the new jobs created in July were in the service industries (generally lower paying jobs with worse benefits) as the employment picture is still very bleak in the manufacturing and good producing sectors (generally higher paying jobs with better benefits). The lack of a rebound in the manufacturing sector continues to be a large problem, particularly for Americans who have been unable to find sufficient employment to replace wages lost when they were laid off their manufacturing job.

Second, and perhaps more importantly, job creation is still lagging significantly behind population growth. If job creation and population growth continue along at their current pace, the employment outlook will continue to worsen with each passing month.

Read More...

• July Employment Summary from the BLS
  
• Statement from the Center for American Progress
  
• July Jobs Picture Analysis by the Economic Policy Institute

The Bush administration announced last week that the Treasury Department would begin issuing 30-year Treasury bonds again. The bonds were discontinued about four years ago because they were seen as unnecessary due to huge projected surpluses in the federal government. The announcement signals an realization and acceptance that budget deficits are here for the long haul and with looming long-term costs rising, the government needs additional ways to borrow money.

Lately there has been increased media coverage surrounding the United Airlines' recent pension default. The New York Times, in particular, has stressed in a few articles that Congress needs to take steps to regulate the pension process in order to rid it of the greed and waste that helps drive these companies' pension plans to default.

United's employees, today's editorial says, collectively lost $3.4 billion in benefits in the default, and they were not "simply victims of a bad stock market and low interest rates." Instead, the unregulated pension system allowed money managers to make a number of risky investments, which eventually led to the collapse of their private pension plan, and an added burden on the Pension Benefit Guaranty Corporation.

The New York Times also ran this story, "How Wall Street Wrecked United's Pension," on Sunday.

The Treasury Department has told Democratic senator Max Baucus (D-MT) that the $8.184 trillion ceiling on government borrowing will not need to be raised this year, confirming speculation that the improvement in tax receipts seen in 2005 will allow Congress to avoid the politically charged issue for the first year since 2001. Despite this seemingly good news, Baucus called attention to the continually disturbing broader financial picture, noting that the debt limit has been raised four times and over $3 billion since 2002. "In the face of record deficits, the government needs to show more fiscal discipline," Baucus said in a news release.

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