Katrina, Poverty, and Public Budgets

The news coverage of Hurricane Katrina showed tens of thousands of hungry and homeless low-income people standing up to their belts in floodwaters. Stranded on rooftops, dying slowly in nursing homes, and packed into the dark and menacing stadium, they waited for help that never came. They did not have the means to evacuate before the storm, and nobody anticipated that a plan was necessary. There was a stunned surprise at the dimensions of human need, a paralysis that caused and exacerbated a tardy relief effort. The images of Katrina were a blunt reminder about the prevalence of poverty and the racial inequality that persists in American cities. To a nation and its government used to ignoring or outright denying the existence of these problems, this was a shock.

At about the same time that Katrina hit, there was another story that captured little media coverage but offers good context. The federal government released its annual report on poverty trends in America based on updated census data. In spite of an economy said to be in recovery, there are a million more poor people in the country than last year. Among people who work, fully half a million more were in poverty than the year before. Median income did not grow at all, as most of the income growth was reserved to the wealthiest sectors. The only reason there was no growth in the number of people without health insurance was that government programs such as Medicaid and FamilyCare covered more people.

Illinois, however, gives interesting evidence of the role that the public sector can have in addressing poverty. Bucking national trends, Illinois experienced a slight decline in both the poverty rate and the number of people without health insurance. Illinois has increased its minimum wage to $6.50, and it has continued to invest in antipoverty programs in spite of the state budget crisis. Illinois has led the nation in expanded health insurance coverage over the last few years. Now the results are showing.

The compelling pictures and stories from the hurricane confirm what the census bureau documents. America has a poverty problem and for several years now may have failed to see it and allowed it to get worse. The shameful failure to include low-income people and communities in the plans for evacuation and coping with the storm mirrors a national attitude of ignoring low-income people and communities across many issues.

Most people in the country believe in personal responsibility, that is, the duty of everyone to do one’s best to care for and better oneself to the extent one’s ability and opportunities allow. Most people also believe that there is a collective responsibility, a duty of “the whole,” that is, the government, to care for its people who need care and to provide adequate opportunities for all. There is frequent debate about where these reciprocal responsibilities meet. Few dispute, however, that disasters invoke the collective duty.

Coping with the hurricane is going to require a major effort from the federal, state, and local governments on top of a vigorous private sector and persistent individual effort. Virtually every American demands this kind of government involvement, including targeted tax dollars. The government is responsible for addressing a disaster and caring for the victims and strategically helping in the rebuilding.

Poverty, too, is a daunting challenge that can be addressed adequately only with a major effort of government, including tax dollars and targeted laws (like the minimum wage). There is a substantial role for personal responsibility and a vigorous private sector, but, without significant government effort, these will not accomplish systemic change. Although there is still a long way to go, government effort is a big part of why Illinois is reversing the trend toward higher poverty rates.

On the federal level, however, the country is in denial about poverty and continues a years-long retreat from government-backed efforts to deal with poverty. The Bush administration’s budget proposals that will be debated starting this month include cuts in virtually all antipoverty programs. This is coupled with the ongoing campaign to defund the government sector through tax relief for the wealthiest few, including permanent repeal of the estate tax that affects about 1 percent of all estates.

Is this the time to defund the government? Is it the time to continue increasing the wealth gap in America and protect and enrich a hereditary economic aristocracy? Surely not. There is a better response to the call for collective responsibility—for government to do its duty. Just as you cannot hope to deal adequately with a severe natural disaster without substantial government involvement, so you cannot hope to deal with the severe social disaster of deep, pervasive, and racially unequal poverty without significant government intervention. The federal budget debates of the coming month will tell us whether our government is equal to its tasks.