The Administration's Sorry Record on Poverty
President Obama’s State of the Union address will focus on “income inequality.” One can understand why he wants to change the subject from the very real problems America faces. His policies have made those problems worse. Obamacare has caused tens of thousands of Americans to lose their health plans and forced them into insurance exchanges that cost more and provide fewer doctor choices. Meanwhile, millions of Americans are still out of work and even more have stopped looking.
On the foreign policy front, the president and Secretary of State John Kerry remain determined to throw a lifeline to Iran’s sinking economy in exchange for vague promises of future cooperation on nuclear proliferation.
The president wants you to forget all that and now consider the plight of the poor. Sadly, he hasn’t done a very good job there either. That’s because his own actions as president have made the poor worse off. Reducing poverty has never been a major priority of this administration. It’s hard to point to a single major legislative achievement of his that has improved the lot of the poorest Americans. If anything, he has spent his first five years appeasing the key groups that make up the Democratic Party and his governing coalition.
How about the much hyped economic stimulus? Nearly a billion dollars spent with little benefit to show except that it did preserve public sector union jobs for many of his most vocal supporters at a time when workers in the private sector, many of whom made inferior wages, were being laid off in record numbers.
Remember “Cash for Clunkers,” the incredibly wasteful program that encouraged destruction of perfectly good automobiles and the purchase of new ones? It’s no accident that program came on the heels of the government’s bailout of the auto industry, through which the United Auto Workers and owners did well.
Obamacare is a nightmare scheme of central planning that has produced unintended consequences and victims galore. Its main provision to help the poor is to expand Medicaid, maybe the worst health care program in existence. At least one study concluded that Medicaid recipients are in no better health than the uninsured. That’s because the reimbursement rates are so low that doctors won’t participate in the program. The program is unsustainable and will collapse of its own weight without major reform. It’s like decreeing that everyone must have an umbrella and then giving the poor umbrellas with multiple holes.
Green energy? Obama’s program consists of raising prices for consumers that rely on fossil fuels, especially coal, and providing handsome taxpayer subsidies to favored corporations, some owned and operated by his campaign supporters. Who knew Obama really wanted to be a venture capitalist?
Obama’s worst policy failure, though, is the lack of economic growth during his years in office. Indeed, he seems disdainful of the very concept. When told that building the Keystone XL pipeline would create construction jobs, he sneered that it would only create a few hundred jobs. His taxes, new regulations and other federal mandates have weighed down job creation and burdened job creators. Facts are stubborn things. This is the slowest economic recovery since World War II -- stemming directly from Obama’s central belief that government programs and “investments,” not the private sector, should drive and sustain economic activity.
Economic growth offers a far better correlation to the poverty rate than temporary band-aids like minimum wage increases or unemployment benefits. Low growth for the five years of this administration has corresponded with an official poverty rate rise to 15 percent. It is even higher according to another calculation by the Census Bureau. As Timothy Smeeding, director of the University of Wisconsin’s Institute for Research on Poverty, notes, “The best policy is obvious. It’s a job that pays decent wages. The answer to poverty is never an income support program.”
This administration represents the triumph of ideology over common sense. Poverty does not exist because some people are successful at the expense of others, which is the most pernicious claim of a president who began his presidency grandly promising to bring people together. It exists because of government policies that ignore job creation and economic growth. The president would have been wise to make that the centerpiece of his speech.