War on the Poor

by Jim Wallis

In These Times magazine, October 2003

I did a right wing talk show not long ago on Fox News. Whenever you mention poverty in a venue like that, they scream that you're engaging in class warfare and promptly declare war on you.

I've decided that the right wing is correct on this: There is a class war, but they and their political allies are the ones who have declared it. As Episcopal Bishop John Chane said at a recent chapel service: "We've gone from a war on poverty to a war on the poor."

For those who care about poverty in America, the coming months are a critical time, a turning point similar to the New Deal of the '30s or the War on Poverty in the '60s. Now, as then, we can make a difference in the lives of millions of people. It is a time for people to speak and act on behalf of those still trapped in poverty.

Income Distribution

In its annual tax analysis for 2000, the IRS reported that the top 400 taxpayers-only 0.00014 percent of the population-now take in more than 1 percent of the total income of all taxpayers. Meantime, their tax payments plummeted, mostly due to substantial reductions in capital gains tax rates. In 2000, the average annual income of the top 400 increased to $174 million, while the average income for the bottom 90 percent was $27,000. Even the Wall Street Journal calls it "so much money in so few hands ... a startling accumulation of wealth at the very top of the income pyramid." The "income gap," wrote the Journal, is becoming a "vast chasm."

The Bush Budget

A budget is a moral document. It clearly demonstrates the priorities of a family, an organization, a government. A budget shows what we most care about. President Bush sent his budget to Congress in February-a budget that he said reflected his most important priorities-so it is worth paying close attention to.

The president's budget of $2.23 trillion proposed a record deficit of $300 billion, speeded up billions of dollars of tax cuts that provide most of their benefits to the wealthiest Americans, called for huge increases for the Pentagon and slashed domestic spending-including core government programs that create affordable housing, curb juvenile delinquency, hire police officers, bring aid to rural schools, help make childcare available to low-income working mothers and guarantee children's health insurance. There are the Bush priorities.

The rest of the programs for mentoring and volunteering laid out in the president's State of the Union speech, while good, are relatively low-cost and ultimately more symbolic than substantial. Without the crucial funding for programs that directly and effectively reduce poverty, "compassionate conservatism" is now in grave danger of becoming compassionless conservatism.

Tax and Funding Cuts

It is now clear that the ongoing costs of the war with Iraq and the Bush administration's tax cuts for the wealthy are leading to a crisis for America's poorest children. Indeed, America's poor were the first casualties of this war, as U.S. domestic needs were literally pushed off the political agenda.

In April, Congress approved nearly $80 billion requested by the administration as the first payment for the war with Iraq. Then they agreed to a budget resolution containing billions of dollars in new tax cuts and increased spending for the military, while resources for important domestic programs fell below the amount needed even to maintain current services in a deteriorating situation for the poor. In September, the president asked for speedy approval of an additional $87 billion for military operations and reconstruction efforts in Iraq and Afghanistan.

The consequences of these actions constitute a silent war, felt most severely in the poorest parts of the United States, where low-income families are desperately clutching onto the bottom rungs of the failing economy. Virtually every state in America is suffering terrible budget deficits. But there is no money in this budget for the states, which are confronting huge deficits and the prospect of draconian cuts in social services, mostly to the poor. In fact, the administration suggests that states could meet their budget challenges with the "flexibility" to cue programs like health insurance for the nation's poorest children. Consider some recent news stories telling of the administration's plans:

* Cuts in Medicaid benefits mean that millions of low-income Americans will see reductions in or will lose health insurance entirely.

* Vouchers that assist nearly 2 million families to pay rent will be replaced by block grants run by the states, with no accountability for funding decisions.

* In the last two years, nearly half the states have cut childcare funding.

The truth is that hungry people will go without food stamps, poor children will go without health care, elderly will go without medicine, and school children will go without textbooks, so that the taxes of the wealthiest Americans can be further reduced.

Child Tax Credit

The exclusion of low-income working families from the child tax credit is becoming a parable, revealing a lesson about what happens to poor families and their children, again and again- they are simply left out.

Most of the country now knows that the $350 billion tax cut passed this spring primarily benefited the wealthiest of Americans. Estimates are that each millionaire will receive $93,000. Yet 1 percent of the total tax cut-$3.5 billion-could not be found for families who struggle mightily just to get by. As part of the legislation, the child tax credit for middle- and upper-income families was accelerated, and checks of $400 were sent out. The Senate added an amendment to also accelerate the refundability of the child credit, so that working families who earn between $10,500 and $26,650 would benefit.

But at the last minute, in the House-Senate conference committee, that amendment was

Republicans said they wanted further reductions in capital-gains tax rates. When the deed was revealed and the storm broke, the Senate quickly fixed the omission in a way that costs the Treasury nothing. But the Republican leadership of the House, seemingly oblivious to the political damage feared by the White House, brazenly tacked the low-income family child tax credit onto another $78 billion tax cut for wealthier families- in other words, using the restoration of the measure for poor families to increase tax cuts for the rich.

The issue deadlocked, and some Republicans have actually admitted that their tactic is an attempt to kill the child tax credit restoration altogether. As checks went in the mail for middle-class families, low-income working parents wonder why they got left out in the cold. Majority Leader Tom Delay's answer: "There are a lot of other things that ate mote important than this."

Welfare Reform

In 1996, after much contentious debate, Congress passed historic welfare reform legislation. Direct federal cash assistance to people in poverty was ended, consolidated into block grants to the states-known as Temporary Assistance for Needy Families, or TANF. The intention of the program was a change in paradigm from welfare to work.

Five years later the track record is mixed. Welfare rolls have been reduced by 50 percent, partly due to the new emphasis and

Homeless in Chicago

partly due to an economy that was-for most of that time- booming. The overall poverty rate and the child poverty rate both declined. Yet too many working people remain poor. Their jobs are mostly entry-level and minimum wage with few or no benefits. Many are only part time. Twelve million children are still in poverty.

The 1996 law also prohibited legal immigrants who entered the United States after 1996 from receiving public benefits. Some proposals in Congress would eliminate that ban and open eligibility to immigrants who have achieved legal status. The administration proposes restoring eligibility for food stamps only, keeping a ban on other forms of assistance.

What's the best way to build on the undeniable successes and make changes to improve the weaknesses of welfare reform? There are several key areas where we should focus our efforts.

First, and most important, must be a conceptual shift from ending welfare to ending poverty. We must | change the political debate to measure our success by reducing the number of people in poverty, rather than just by reducing welfare tolls.

Then there is the basic question of funding. Some of the pending proposals, including the Bush administration's, maintain TANF funding at the same level it has been for the last

five years-a total of $16.5 billion | per year-for the next five. But in | real terms, flat funding is a cut. That $16.5 billion won't buy now what it did in 1996, and certainly won't in 2007. This is no time to cut our concern, care and commitment to poor people and their children. Other proposals call for indexing the amount so that it increases by the rate of inflation. We have a clear moral message. A budget proposing billions a year in increases for the military and massive tax cuts for the wealthiest-while cutting funding for overcoming poverty-is unacceptable.

When debates are framed wrongly, they almost inevitably turn out badly. That happens all the time on Capitol Hill. In the welfare debate, focusing on simply reducing welfare rolls instead of reducing poverty is still the major problem. Most people involved in anti-poverty efforts would agree now that helping low-income people find "self-sufficiency" is far preferable to a system of endless subsidy.

But what are the best ways to support people in moving from subsidy to sustenance? And if work is the best way out of poverty (as most of us now agree), how do we make work really work in America? What do people need in support for childcare, in real education and training, in securing health care or affordable housing?

The TANF re-authorization debate could become a national discussion about how to overcome poverty in America. In fact, the debate doesn't make any sense apart from the goal of poverty reduction. Let's state our goal clearly and unanimously-welfare reform should be judged by how much we are actually reducing poverty. Then let's have the most honest debate we've ever had about how to do that.

Reconstruction of Iraq

President Bush asked for $87 billion more to pay for the American occupation and reconstruction of Iraq. New reports already reveal the comparative costs and sacrifices of this enormous expenditure: The entire proposed fiscal-year budget for the Department of Health and Human Services is $66 billion; l for the Department of Education, $53 billion. The total amount for all 50 states to meet their projected budget shortfalls this year is $78 billion.

Clearly the sacrifices for the war in Iraq will be borne by those in most need who will bear the brunt of inevitable spending cuts to vital social programs, and by future generations who will ultimately pay for the beneficiaries of the Bush tax cuts and the recipients of the lucrative contracts for Iraqi reconstruction that are going to carefully selected American corporations. Those who will not sacrifice, in other words, are the wealthy and powerful allies of the Bush administration-and their core constituency. It is not hyperbole to say that those beneficiaries of wartime tax cuts and contract deals should now be called war profiteers.

So I propose two sacrifices the Bush administration should now make, if they expect the rest of the nation to share in the sacrifices of rebuilding Iraq. First, the White House should admit its miscalculations and policy failures. And those responsible for the failures should be the first to sacrifice. Therefore, the chief architects of the failed Iraqi policy- Secretary of Defense Donald Rumsfeld and his deputy, Paul Wolfowitz-should both be asked to resign. These chief Utiilateralists have presided over the policy failures and, if a better direction of international cooperation is to be restored in Iraq, Rumsfeld and Wolfowitz must step aside. Rep. David Obey (D-Wisc..) already has called for their resignations.

Second, if the White House calls for sacrifice are to have any moral credibility, the administration's tax cuts to the wealthiest Americans must be immediately rescinded. Neither the poor, nor our children and their children, should be forced to pay for the war in Iraq, while those with the greatest ability to sacrifice are reaping a whirlwind of benefit.

Whether the resignations of Rumsfeld and Wolfowitz or the repeal of the tax cuts are politically likely at this moment (and they aren't) is not the point. There are fundamental issues of moral accountability here that go beyond political calculation. And those questions of accountability will be especially vital during an election year.

Jim Wallis is editor-in-chief of Sojourners, which previously published the stories from which this article was excerpted. For more go to www.sojo.nec.

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