US economy making gains, but Trump, GOP could torpedo it
President Donald Trump clearly inherited an economy on the upswing, according to the 2016 Census report, with income, health coverage and poverty levels having all improved in the past two years. The question is whether his administration and the Republican-controlled Congress will sustain the momentum, or even reverse it.
The Census report, released Tuesday, showed median income, adjusted for inflation, grew by 3.2 percent from 2015 to 2106, to $59,039, as employers added jobs and hours and even, in some cases, gave raises. At the same time, the poverty rate decreased by 0.8 percentage points, or 2.5 million people, to 12.7 percent. Both measures are now at or near their prerecession levels in 2007, a hard-fought recovery.
On health care, the data show that the ranks of the uninsured fell last year by 900,000 people, to an all-time low of 8.8 percent of the population. The decline is a result of the Affordable Care Act, or Obamacare. The 32 states and District of Columbia that participate in the ACA’S expansion of Medicaid for low-income families had larger declines in their uninsured populations than states that do not participate. Massachusetts, for example, a pioneer in broad coverage, has the lowest uninsured rate in the nation, 2.5 percent, while Texas, which rejected Medicaid expansion, has the highest, 16.6 percent.
The data also show the success of federal safety-net programs. If not for tax credits for low-income workers, an additional 8.2 million people would have been classified as poor last year. Similarly, food stamps and low-income housing aid lifted 3.6 million and 3.1 million people, respectively, out of poverty last year.
For all the improvement, however, broad prosperity remains elusive. For income gains to meaningfully raise living standards, they would have had to exceed the peak from before the recession, not merely met it. One in eight Americans, 40.6 million people, are still poor. Some 28.1 million are still without health coverage.
And yet, Republican policymakers seem determined to undo the progress that has been made. The Trump administration has opposed Obama-era rules to update the nation’s overtime-pay protections for salaried workers, arguably the single most important policy option to raise middle-class pay. Trump and the House Budget Committee have both issued budget proposals for 2018 that call for deep spending cuts to safety-net programs, and Republican senators Bill Cassidy of Louisiana and Lindsey Graham of South Carolina introduced yet another draconian bill to end Obamacare.
Those giant steps backward would all shift income up the economic ladder. They would also create fiscal room for big tax cuts for the rich, a grail of Republican policy, despite the poor job and wage growth after the tax cuts of the George W. Bush era.
The result would be greater income inequality, the one measure that did not improve in the new Census data. Income gains at the top far outstripped those at the bottom.
Republicans’ policies would undermine the gains of average Americans. Incompetence and public opposition have limited their success so far. They will not give up, though, so neither can the opposition.