WASHINGTON, Sept. 24 (UPI) -- The nation's poverty rate went up for the first time in four years and Democrats Tuesday used the new U.S. Census data to call President George W. Bush's economic plan "a complete failure."
"Despite a growing mountain of evidence that his economic plan is a complete failure, the president remains mired in his ways," said House Democratic Leader Richard A. Gephardt. "His only answer to mounting economic problems is to blame his predecessor and urge the Congress to pass a tax cut for the wealthy beginning in 2011."
Gephardt said millions of Americans are struggling and rightly expect their elected representatives to work toward a common sense agenda.
However, the president told reporters at a Cabinet meeting, "The American people are resilient and strong. We've got the best workers in the world. You bet I'm optimistic, but I understand that we've got a lot of work to do."
According to Bush, the economy was still recovering from the effects of the recession and he defended his tax cut as "more important than ever as a necessary part of the economic recovery."
Bush said the economy had the ingredients for growth with low interest rates and low inflation.
The census information, the most recent available, said the nation's poverty rate rose from 11.3 percent in 2000 to 11.7 percent in 2001. Median household income declined 2.2 percent in real terms from its 2000 level to $42,228 in 2001.
"Like the last year-to-year increase in poverty in 1991-1992 and the last decrease in real household income in 1990-1991, these changes coincided with a recession," said Daniel Weinberg, chief of the Census Bureau's Housing and Household Economic Statistics Division.
According to "Poverty in the United States: 2001" and "Money Income in the United States: 2001," about 1.3 million more people were poor in 2001 than in 2000 -- 32.9 million versus 31.6 million.
The number of poor families increased from 6.4 million in 2000 -- a record low rate -- to 6.8 million in 2001.
"Using unpublished reports, we find the poor did become poorer in 2001, farther below the poverty line since records began being kept in 1979," said Robert Greenstein, executive director, Center on Budget and Policy Priorities in Washington.
Greenstein explained that while there were more people living below the poverty line in 2001 -- at about $200 below the poverty line -- there were less people living below the poverty line than in prior years.
The average poverty threshold for a family of four in 2001 was $18,104 in annual income; compared with $14,128 for a family of three; $11,569 for a family of two; and $9,039 for unrelated individuals, according to the CBPP.
Increases in poverty were concentrated in metropolitan areas and in the South. The poverty rate for people living in the suburbs rose from 7.8 percent in 2000 to 8.2 percent in 2001, but did not change for those in central cities -- 16.5 percent -- or in non-metropolitan areas -- 14.2 percent.
The South was the only region to have an increase in its poverty rate from 2000 to 2001. Its rate of 13.5 percent was the highest among all regions, the remaining regions of the country remained unchanged.
For non-Hispanic whites, median household income declined 1.3 percent to $46,305. Blacks experienced a loss of $1,025 of median household income to $29,470. The most significant drop was 3.4 percent for Asians and Pacific Islanders, a loss of $3,678 to $53,635. The real median income of Hispanics remained unchanged at $33,565.
"There is some paradoxical outcomes in the data, we have whites in the suburbs rising in poverty but the poverty rate remaining unchanged for blacks and Hispanics," said Greenstein.
"Although, household income for blacks did go down to $1,025 and perhaps, we don't know why yet, the Asian and Pacific drop may reflect the drop in dot-com and the high tech sector."
Real median household income did not change in the Northeast between 2000 and 2001, remaining at $45,716. It did, however, decline by 3.7 percent in the Midwest to $43,834; 2.3 percent in the West to $45,087; and 1.4 percent in the South to $38,904.
"Of concern, is that in 2001, unemployment was at 4.8 percent but in 2002 it rose to 5.9 percent and the Congressional Budget Office said unemployment will stay at about 6 percent in 2003," said Greenstein. "There will probably be 2 million people who have lost all their unemployment benefits by the end of 2002."
According to Greenstein, the new poverty data would have been considered more serious if the upcoming election was for president, but many associate the recession with the terrorist attacks of Sept. 11, 2001, and do not tie to politics.
"However, one policy implication that I would draw from the figures is that with the increase in those losing unemployment benefits there will be increased pressure for federal fiscal relief for the states to continue benefits," said Greenstein.
(Reported by Alex Cukan in Albany, N.Y.)
