Poverty Figures Put Bush, Kerry Policies in Spotlight

A disappointing record last year in poverty, middle-class income and the availability of health insurance threaten President Bush’s effort to build faith in his economic performance at next week’s Republican National Convention.

But the trends’ ultimate effect may turn on whether Sen. John F. Kerry can exploit these issues more effectively than he has in his Democratic presidential campaign.

With the release Thursday of the Census Bureau’s annual economic report card, Bush achieved an unwelcome trifecta: For each year of his presidency, the number of Americans in poverty and the number without health insurance increased while the median household income declined at least a little.

Those trends are especially embarrassing given the indications from senior Republicans that Bush intended to devote at least part of the convention to buffing his credentials as a “compassionate conservative” -- a theme he stressed in 2000 but has mostly let lapse.

“It complicates his ability to do that,” says Bruce Buchanan, a University of Texas political scientist and longtime Bush follower. “He’s got his hands full.”

The new figures were likely to affect the campaign most immediately by forcing more attention on healthcare: The Census Bureau reported that the number of Americans without insurance rose to nearly 45 million.

That means the ranks of the uninsured increased by almost 5.2 million since Bush took office -- a number bigger than the population of Minnesota -- and the share of Americans without coverage is now higher than when President Clinton launched his doomed effort to guarantee universal access in 1993.

This year, Kerry has proposed the most ambitious and expensive program to expand coverage since Clinton’s plan crashed. But while Kerry instantly cited the Census Bureau numbers in a campaign appearance Thursday, most experts agreed the Democrat had not found a way to ignite a sustained domestic debate with Bush, not only on healthcare but on the broader issues of economic insecurity symbolized by the new figures.

“The problem is that as long as the campaign is about the war in Iraq or terrorism, the Democratic candidate has not been able to utilize his natural advantage on issues like this,” said Mitchell Moss, a professor of urban policy at New York University. “These numbers are only powerful if John Kerry uses them.”

In responding to the Census Bureau numbers, the Bush campaign and conservative analysts tried to accentuate the positive. In a statement, the campaign noted that the data were from last year and missed the upturn of 2004. Conservative analysts pointed out that the share of Americans without health insurance and the poverty rate were both higher at various points in the 1990s than last year.

But the risk for Bush is that the trends are moving against him on income and poverty as well as access to health insurance. And that could reinforce questions about whether he has devoted enough attention to the problems of lower-income families, after promising in 2000 to focus on them more than Republicans had previously.

During Bush’s first three years, the number of Americans without health insurance has increased 13%, the census figures show. That’s a larger increase during the same period than under Clinton (5%) or Bush’s father, George H.W. Bush (8%), the only other two presidents since the Census Bureau began tracking the figures.

Likewise, during Bush’s first three years, the median household income fell by $1,535, or 3.4%. Although the 2003 figures showed only a small slip from 2002, overall that’s the largest decline in percentage terms during the first three years of any president’s first term in the last 35 years.

The poverty trends are similar. During Bush’s first three years, the number of Americans in poverty, which had been declining rapidly through Clinton’s second term, increased by nearly 4.3 million, or 13.6%. Only President Reagan among presidents in the last 35 years saw a bigger increase (21%) during his first three years in office.

As Reagan’s experience shows, weak early performance on these measures doesn’t necessarily foreshadow political disaster. Reagan won a landslide reelection.

But by that time, the economy was producing jobs much faster and more steadily than today. Thursday’s numbers, some analysts say, may have somewhat more electoral effect because voter confidence in the economy remains fragile.

“There is enough uncertainty out there to put people in a slightly unsettled frame,” Buchanan said.

Democrats and Republicans agree that the key to improving the income and poverty trends is accelerating economic growth.

Kerry and Bush differ on the policies for the neediest families. Kerry has urged boosting the hourly minimum wage from $5.15 to $7 by 2007, increasing subsidies for child care and expanding the earned-income tax credit for the working poor.

Bush has mostly promoted programs to help low-income families buy their own homes, efforts to expand government partnership with religiously based charities that serve the poor, and elements of his tax cuts that benefit lower-income families. He hasn’t ruled out an increase in the minimum wage, but neither has he advanced the idea.

Contrast between the candidates is starker on healthcare -- arguably the clearest divergence between the two sides on a domestic issue.

At the core of Kerry’s plan is a swap of responsibilities, in which Washington would assume the cost of insuring the poorest children if states agreed to help fund coverage for millions of working poor adults.

In the plan’s most distinctive element, Kerry would commit the federal government to paying most of patients’ bills beyond $50,000 a year.

Kenneth E. Thorpe, an Emory University professor and former Clinton administration official, has estimated that Kerry’s plan would cover about 27 million of the uninsured, including virtually all children. He pegs the net cost over the next decade at about $650 billion.

Bush’s plan is more modest. His main idea is to provide tax credits of no more than $1,000 to individuals and $3,000 to families to buy insurance. He also wants to provide tax incentives to encourage more use of tax-favored health savings accounts.

Bush’s camp estimates his package would cover about 10 million people at a cost of roughly $100 billion over the next decade. Healthcare experts consulted by Democrats think the plan would cover as few as 2 million of the 45 million uninsured.

Times staff writer Kathleen Hennessey contributed to this report.