A new Census Bureau report shows the striking contrast between Mitt Romney's vision and what's really happening in America. The bureau reported that the income gap grew sharply last year between the wealthiest Americans and the other 80 percent of the country. The numbers are the latest snapshot of a middle class going nowhere and of the higher bar that lower-income families are facing in moving out of poverty. And it highlights again the Republican folly of handing more tax cuts to the few who are already better off.
Wednesday's report had a few bright spots, but overall it showed that the vast majority of Americans are still struggling in this second year of the recovery. Income for the top 20 percent of American households grew by 1.6 percent last year, driven in part by even larger gains by the super-wealthy. But the incomes of middle-class households fell, and they remained flat for those at the bottom. That caused median incomes in 2011 to drop for the second consecutive year, by 1.5 percent overall, to $50,054 for the typical American family.
The numbers show a middle class in gridlock, and they frame the starkly different visions that President Barack Obama and the Republican nominee have offered voters for reviving the economy. Middle-income Americans who lost jobs in manufacturing or middle management have been unable to rebound, and that loss in spending power continues to drag down the economy. Median household income last year was 8.1 percent lower than in 2007, the year before the recession hit, and it was nearly 9 percent lower than its peak in the 1990s. And as more Americans struggle to remain in the middle class, those households at the bottom are having a harder time climbing the economic ladder. Romney's proposed tax cuts for the wealthy and cutbacks in spending for job training, education, health care and other programs would only intensify this downward spiral. The trickle-down theory would not amount to a trickle of support for those Americans who need jobs and a viable road to the middle class.
The report also found the share of Americans without health insurance fell slightly, which experts attributed in large part to a provision under the Affordable Care Act that allows children to remain on a parent's insurance policy until age 26. The nation's poverty rate also remained the same between 2010 and 2011 after three straight years of increases, reflecting the movement of people from part-time to full-time work. These are small but positive trends, and they soften the hit from the larger economic picture. But the income gap remains a threat to the recovery, stable growth and prosperity over the long term. Both Obama and Romney need to offer more specifics about how they would help bridge that gap.
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