Business As Usual--On the Backs of the Poor

from "Liberal Hopes Ebb in Post-Storm Poverty Debate"

By JASON DePARLE in New York Times [excerpts; emphasis added]

As Hurricane Katrina put the issue of poverty onto the national agenda, many liberal advocates wondered whether the floods offered a glimmer of opportunity. The issues they most cared about - health care, housing, jobs, race - were suddenly staples of the news, with President Bush pledged to "bold action."

But what looked like a chance to talk up new programs is fast becoming a scramble to save the old ones.

Conservatives have already used the storm for causes of their own, like suspending requirements that federal contractors have affirmative action plans and pay locally prevailing wages. And with federal costs for rebuilding the Gulf Coast estimated at up to $200 billion, Congressional Republican leaders are pushing for spending cuts, with programs like Medicaid and food stamps especially vulnerable.

"We've had a stunning reversal in just a few weeks," said Robert Greenstein, director of the Center on Budget and Policy Priorities, a liberal advocacy group in Washington. "We've gone from a situation in which we might have a long-overdue debate on deep poverty to the possibility, perhaps even the likelihood, that low-income people will be asked to bear the costs. I would find it unimaginable if it wasn't actually happening."

Mr. Greenstein's comments were echoed by Representative Rosa DeLauro, Democrat of Connecticut: "Poor people are going to get the short end of the stick, despite all the public sympathy. That's a great irony."

But many conservatives see logic, not irony, at work. If the storm exposed great poverty, they say, it also exposed the problems of the very policies that liberals have supported.

"Doubt about the effectiveness of some programs is only one factor shaping the current antipoverty debate. Another is political muscle: poor people do not make campaign contributions. Many do not even vote.

A third factor is the federal deficit, which leaves little money for new initiatives. And a fourth is the continuing support for tax cuts, including those aimed at the wealthiest Americans, which further limits spending on social programs.

Indeed, even as he was calling for deep spending cuts last week, Representative Mike Pence, Republican of Indiana, who leads the conservative caucus, called tax reductions for the prosperous a key to fighting poverty.

Economic growth is crucial to reducing poverty, but the effect of tax rates is less clear. In 1993, President Bill Clinton raised taxes on upper-income families, the economy boomed and poverty fell for the next seven years. In 2001, President Bush cut taxes deeply, but even with economic growth, the poverty rate has risen every year since.

In 2004, about 12.7 percent of the country, or 37 million people, lived below the poverty line, which was about $19,200 for a family of four. The figure was 7.8 percent among whites, 24.7 percent among blacks and 21.9 percent among Hispanics.

Hurricane Katrina gave those figures a face as no statistic can.

"As all of us saw on television, there is also some deep, persistent poverty in this region," with "roots in a history of racial discrimination," President Bush said in a Sept. 15 speech from New Orleans. Using the language of the civil rights movement, Mr. Bush pledged "not just to cope, but to overcome."

But liberal critics say his policies will have the opposite effect.

The week before his speech, Mr. Bush suspended the Davis-Bacon Act, a 1931 law that prohibits federally financed construction jobs from paying wages less than a local average. The administration argued that the suspension, which applied only to storm areas, would benefit local residents by stretching financial resources. Critics said the savings would come at the expense of needy workers.

Likewise, the president suspended rules requiring federal contractors to file affirmative action plans, which his allies called cumbersome.

"He talks about lending a helping hand to the poor and disadvantaged," Jared Bernstein, a researcher at the Economic Policy Institute, a liberal research and advocacy group in Washington, said of Mr. Bush. "But these policies push the other way, toward lower wages and less racial inclusion."

As they search for spending cuts, neither chamber has turned away from the $70 billion package of tax reductions authorized last spring. Mr. Greenstein, of the Center on Budget and Policy Priorities, says those tax cuts come on top of two others, passed in 2001, that are scheduled to take effect in January and that benefit the wealthiest Americans.
Mr. Greenstein argues that the logic of shared sacrifice requires the tax cuts to be reconsidered. But most Congressional Republicans disagree.