Oct. 21—With fewer family-supporting jobs available and health care costs skyrocketing, America’s middle-income families last year had less cash in their pockets than in 2000, and those with children saw their income fall by $699, according to a new study by the Economic Policy Institute (EPI). Although President George W. Bush says his tax cuts have helped the middle class, the EPI report found job losses and rising health care costs far outweighed any benefits from the Bush tax cuts, which heavily favored the wealthy.
“Middle-income families now have less income available…to meet their needs,” says Larry Mishel, president of EPI and co-author of the study, Less Cash in Their Pockets: Trends in Income, Wages, Taxes and Health Spending of Middle-Income Families, 2000–03.
Jobs, Health Care Crises Take Toll
The report, released Oct. 20, finds the nation’s jobs crisis has taken a harsh toll on family incomes: Before taxes, the income of the median household fell $1,535 between 2000 and 2003, according to figures in an August U.S. Census Bureau report.
The higher costs of health care premiums, deductibles and co-payments, along with increases in state and local taxes and fees, more than erases any benefits of the 2001 and 2003 Bush tax cuts to middle-income families, the report says. Factoring in less income from jobs, scant help from the tax cuts and higher health care costs, middle-income single mothers saw their incomes fall 2 percent between 2000 and 2003, while elderly couples’ incomes dropped by 3.8 percent and young single workers’ wages fell 1.8 percent. For married couples with children, wages fell 1.3 percent.
Sen. Kerry Plans to Increase Health Coverage, Keep Middle Class Tax Cuts
Even though 5 million fewer people have health insurance since the president took office, Bush has done nothing to help workers retain health coverage or gain the access they need to insurance, union activists say.
In contrast, presidential candidate Sen. John Kerry (D-Mass.) plans to improve the existing employer-based health care system and create new opportunities for coverage for children and most adults. Kerry’s health care plan will cut costs for companies and individuals and ensure millions more Americans have health coverage while saving companies money. Under Kerry’s plan, companies that agree to provide health insurance for their employees will be reimbursed 75 percent of their costs for catastrophic cases.
Kerry also will make it possible for every child in the United States to have health care coverage by providing aid to states to automatically enroll every eligible school child in the State Children’s Health Insurance Program and expanding eligibility for Medicaid coverage. Kerry also would make it possible for all of America’s workers to buy into the same health care plan as members of Congress.
By expanding health coverage more broadly and introducing such cost-savings techniques as disease management programs, Kerry’s proposals would cut health care costs in some areas. He would cover additional costs for his health care plan by rolling back Bush’s tax cut for the wealthiest Americans, those earning $200,000 or more a year, while maintaining middle-class tax cuts. Many studies, including one from the Center on Budget and Policy Priorities, demonstrate that Bush’s tax cuts have disproportionately aided the rich.
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