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EconomicPolicyInstitute September 17, 2009

As President Obama moved to unite the nation around health care reform last week, a new report from the Census Bureau showed that more Americans are slipping into poverty and losing their health insurance.  A series of analyses from EPI economists showed why the latest Census data on poverty and health insurance coverage for 2008 don’t reflect the worst of the recession, and outlined how lawmakers should move forward in the homestretch of health care reform.

Protecting the powerless
EPI President Lawrence Mishel, meanwhile, tied together all the pieces of the great recession – from widespread job loss to stimulus spending — in an address to the Tides Momentum Leadership Conference in San Francisco. Mishel outlined how already high unemployment and poverty rates were likely to continue rising even after the recession officially ended. Along with showing how bad conditions could get for the country’s poor and working class, Mishel explained why progressive policies were also in jeopardy if the public came to view the Recovery Act as a failure. “That could set back our ability to have any kind of economic policy on behalf of the powerless,” he warned.

Citing EPI research showing that stimulus investments made under the Recovery Act had saved jobs, Mishel explained, “We’re in a really deep hole. The stimulus package isn’t enough. We have to do more.” Tides CEO Drummond Pike later identified Mishel’s presentation as a highlight of the conference, calling it “one of the most cogent, coherent analyses of the economic meltdown and what we need to do about it.”

14.1 million children living in poverty
Additional evidence of growing pain on the ground came from the Census Bureau, which on September 10 reported that median household income fell 3.6% in 2008, the largest one-year decline on record, while the poverty rate rose to 13.2% in 2008 from 12.5% in 2007. The Census also reported that the number of Americans without health insurance rose to 46.3 million in 2008 from 45.7 million in 2007.

EPI’s Director of Health Policy Research Elise Gould and EPI Economist Heidi Shierholz explained why this 2008 data was only a glimpse of the pain currently being experienced.  Describing the latest data as just the tip of the recession’s iceberg, Shierholz noted in the EPI Income Picture that the 2008 figures translated into 14.1 million children living in poverty. She forecast that, because of the further job loss in 2009, more than a quarter of all children living in the United States would be living in poverty by next year.
Gould noted in the EPI Health Picture that in addition to overall insurance coverage rates falling, fewer people had employer-sponsored health insurance in 2008, continuing a longstanding trend that will likely accelerate. In fact, the share of people with employer-sponsored health care has fallen to 58.5% in 2008 from 64.2% in the year 2000.

Ironically, as the nation debates the merit of a public health insurance option to provide coverage for those who do not have jobs or do not get health insurance through their jobs, Gould noted that Medicaid and SCHIP, the State Children’s Health Insurance Program, covered an additional 3 million people in 2008. “It’s a virtual certainty that with the deepening of the recession in 2009, more Americans are losing health insurance every day,” Gould wrote. “Americans need affordable, secure alternatives to a system where losing a job too often means losing health insurance. The status quo is simply not a viable solution.”

The health care home stretch
Gould and EPI economist Josh Bivens also analyzed President Obama’s address on health care reform. In Finishing Strong, published on EPI’s Web site, they applaud Obama’s continued push for reform, but caution against favoring the reform framework released by Montana Senator Max Baucus over the House reform bill that was passed over the summer. Although both proposals would eliminate many of the worst abuses in the health insurance industry, the authors stress that the House bill goes much further toward providing universal coverage and includes more generous subsidies to help low-income families afford health care premiums.

Relief for U.S. tire makers
Late last week, President Obama announced new restrictions on automobile tire imports from China, saying a surge of imports had cost many U.S. factory workers their jobs. The news came on the heels of an op-ed in The Buffalo News, Just Say No to Surging Tire Imports From China, by EPI Senior International Economist Robert Scott. Scott wrote that more than 5,100 American tire manufacturing jobs have disappeared since 2004 and another 3,000 job cuts in the industry have been announced for this year.

Secure retirement for all
EPI’s call for an improved retirement system is gaining momentum. Wider Opportunities for Women, the United Food and Commerical Workers Union, and the National Consumers League have recently endorsed the principals of Retirement USA. The Retirement USA project is an effort by EPI — in partnership with the Service Employees International Union, The Pension Rights Center, and the National Committee to Preserve Social Security and Medicare — to ensure that all U.S. workers are covered by a retirement plan that provides secure and adequate income after retirement.

Upcoming events
On September 24, EPI will host It Takes a Pillage, featuring Nomi Prins, a former Goldman Sachs managing director-turned investigative journalist. Prins’ book, It Takes a Pillage, outlines how it was the practices of Wall Street rather than excesses on Main Street that produced the financial crisis, and how large corporations received large amounts of bailout money with little accompanying oversight. The event begins at 1 p.m. at EPI’s offices.

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