Merry Christmas: The Lasting Impact of the Economy and a Congress that Apparently Doesn’t Give a Damn

By Dr. Watson Scott Swail, CEO, Educational Policy Institute

Okay, I could have written a softer, nicer, gentler, “funner” piece for Xmas. But I received an email yesterday from the Southern Education Foundation that said that “extreme poverty in the United States increased during 2009 by 12.9 percent, expanding the number of people living below 50 percent of the poverty threshold by more than 2.1 million. As a result, extreme poverty was the fastest growing income group in America last year.” This finding buttresses Robert Reich’s point that we continue to widen the chasm between the rich and the poor in America.

That started my day and I couldn’t quite let it go.

It is no surprise that this recession (can we call it what it is? A depression? I’m depressed, doesn’t that count?) is having a lasting impact on many individuals and families. Foreclosures are at an all-time high (I saw a family’s entire house emptied out on to their lawn earlier this spring in my neighborhood. Incredibly sad). Unemployment is still hovering close to 10 percent. The US dollar is horrifically undervalued. And gas prices have crept back up to $3/gallon.

But those at the bottom of the income scale have it much, much worse. Yes, people with AAs and BAs and even PhDs are having trouble finding employment. But those at the bottom didn’t even have employment. They have been struggling through the worst economy in 70 years.

The maddening part is that Congress chose to do very little about this situation. What they did do was laced with brutal politics. Yes, the President cut a deal with the Republicans to extend unemployment benefits, but only through the incredible cost of extending the Bush-era tax cuts (or as some pundit said, the Obama Tax Cuts, now that he owns them…) to the rich. To understand how these tax breaks impact taxpayers, the savings from the Bush tax cut gives a typical middle-class family about $1,000 in take home pay. For those in the top 1 percent of the economy, the take home increases by $73,000. Or as CNN Money asserted, it is the difference between a week at Disney’s Fort Wilderness Resort and purchasing a Jaguar XJ (of course, I still don’t see how $1,000 buys a week at Disney… must be the economy section of the resort).

So while we talk about a 12.9 percent increase in extreme poverty in the US, we spend—get this—a total of $81 billion on those with incomes of $250,000 and above. Let’s be clear: those earning that much actually earn probably in excess of $300K+, because that income is AGI—Annual Gross Income—or the total income after all deductions, and most people above $100k itemize their deductions on a Schedule C form. It’s a lot of money. But this seemed to be the important policy to stump on for the Republicans.

The carrot for the Democrats was the extension of the unemployment benefits, which was important and needed to happen. But to hold Congress hostage, as defined by the President and some of the press, for the poor by way of the rich, was repugnant at best.

There have been some little political wins for Congress and the President this holiday season, including the repeal of DADT (and why is John McCain still arguing?) and the START Treaty.

However, all we need to do is look around and see that the economy is still in a major slow down. Jobs are only slowly coming back, and economists suggest it may be a couple more years before we see significant declines in the unemployment rates.

What I want for Christmas is a Congress that works in the best interest of all people, especially those with the quietest—sometimes non-existent—voice in the political arena. Politics should be balanced, but we need to ensure that we educate those who need more education, retrain those who need retraining, and support those who need food each day. You can’t learn and earn on an empty stomach. It’s that simple. So why do we make it so hard?

On behalf of the staff of the Educational Policy Institute, I wish you all Happy Holidays this season, and the best in 2011. We’ll see you in January.

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About Educational Policy Institute

The Educational Policy Institute is a Washington, DC-based research think tank on education and the social sciences. EPI conducts evaluation and policy studies on various educational issues from Pre-K to workforce outcomes in the United States, Canada, and beyond. Visit us at educationalpolicy.org.
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