Bush’s “Response” to Income Inequality-- Making it Worse

“Income inequality disparities is real.  It’s been rising for more than 25 years…And the question is whether we respond to the income inequality we see with policies that help lift people up, or tear others down,” President Bush noted in his budget address.   But Bush’s answer to income inequality is to make it worse.  He would cut necessary programs for low and middle-income people to fund expensive tax cuts for the people with the highest incomes. The result is that those that are at the top will be lifted even higher, and some who are on their way up the economic ladder will be torn down.  

A January Congressional Budget Office report confirms that since the 1970s, the gap between the rich and poor has been growing wider.  In 2004, the wealthiest 20 percent of households claimed 53.5 percent of wealth, while the bottom fifth of households claimed 4.1 percent of the nation's wealth in spite of containing many times more people than the top fifth.   President Bush’s response is to propose tax cuts that are expected to average $162,000 a year to people with incomes of more than $1 million by 2012.   

The tax cuts and the expensive Iraq war grow the deficit.  The President's solution is to propose drastic cuts to the State Children’s Health Insurance Program, Food Stamps, Medicare and Medicaid, and numerous other human needs programs that serve low- and middle-income families.  Children in families with incomes as low as $35,000 will risk losing health insurance (SCHIP), and the elderly face sharp cuts in home energy assistance and (LIHEAP) and food assistance.  These cuts hurt programs that allow retired people to be economically secure, and that support low and middle income working families as they attempt to progress economically or avoid falling out of the middle class.

This year’s budget is one more manifestation of Bush’s active policy to de-fund necessary government programs.  By shrinking government revenues through tax cuts, the deficit increases, and thereby creates the rationale to cut important programs and reduce the government's partnership role in addressing important problems.  Bush's devotion to this cramped role for government is made more unfair by the expense of the Iraq war.  But, even the need to pay for that adventure does not cause him to back away from his proposed raise for the wealthy and shrinking of support for low and middle income Americans. 

Regardless of the administration’s policy of official optimism regarding the economy, Americans are living in an increasingly harsh economic climate in which it is harder than ever to hold onto a middle class standard of living. A well-paying job, health insurance, the chance to own or keep a home, the opportunity to provide a good education to their children and the security of looking forward to a dignified retirement are slipping out of their reach. 

Bush’s response to income inequality is to give wealthier people a raise and ask everyone else to pay for the Iraq war through cuts to important programs. Now Congress must respond by rejecting this unfair budget, by ensuring that the burden of the war is shared fairly, and by making smart investments in programs that address crucial human needs and help all Americans in their efforts to move up the economic ladder. 

John Bouman
President
Sargent Shriver National Center on Poverty Law
50 E. Washington St. Suite 500
Chicago, IL 60602
312.263.3830 ext. 250