Middle Class Shrinks Further as More Fall Out Instead of Climbing Up
By DIONNE SEARCEY and ROBERT GEBELOFF
JAN. 25, 2015
The middle class that President Obama identified in his State of the Union speech last week as the foundation of the American economy has been shrinking for almost half a century.
In the late 1960s, more than half of the households in the United States were squarely in the middle, earning, in today’s dollars, $35,000 to $100,000 a year. Few people noticed or cared as the size of that group began to fall, because the shift was primarily caused by more Americans climbing the economic ladder into upper-income brackets.
But since 2000, the middle-class share of households has continued to narrow, the main reason being that more people have fallen to the bottom. At the same time, fewer of those in this group fit the traditional image of a married couple with children at home, a gap increasingly filled by the elderly.
This social upheaval helps explain why the president focused on reviving the middle class, offering a raft of proposals squarely aimed at concerns like paying for a college education, taking parental leave, affording child care and buying a home.
“Middle-class economics means helping working families feel more secure in a world of constant change,” Mr. Obama told Congress and the public on Tuesday.
Still, regardless of their income, most Americans identify as middle class. The term itself is so amorphous that politicians often cite the group in introducing proposals to engender wide appeal.
The definition here starts at $35,000 — which is about 50 percent higher than the official poverty level for a family of four — and ends at the six-figure mark. Although many Americans in households making more than $100,000 consider themselves middle class, particularly those living in expensive regions like the Northeast and Pacific Coast, they have substantially more money than most people.
However the lines are drawn, it is clear that millions are struggling to hang on to accouterments that most experts consider essential to a middle-class life.
“I would consider middle class to be people who can live comfortably on what they earn, can pay their bills, can set aside something to save for retirement and for kids in college and can have vacations and entertainment,” said Christine L. Owens, executive director of the National Employment Law Project, a left-leaning research and advocacy group.
Lisa Land, 49, is one of those who have dropped through the hatch. She gets by on her father’s $1,300 monthly Social Security checks and by having her adult daughter pitch in for groceries.
Her circumstances are a stark change from just a few years ago, when she considered herself firmly in the middle class. Despite a relatively modest salary, her pay and other resources went a long way in tiny Eden, N.C., where she worked for 13 years in customer service at a textile factory.
In 2008, however, Ms. Land was laid off. Faced with ailing parents and a recession that tore up the region’s economy, she moved in with her father to offer full-time care.
The middle class has shrunk consistently over the past half-century. Until 2000, the reason was primarily because more Americans moved up the income ladder. But since then, the reason has shifted: There is a greater share of households on the lower rungs of the economic ladder.
“We wouldn’t have a lot of money, but we had everything that we needed,” she said. “Now, there’s really no extra for anything. No vacation. No dining out. No stuff like that.”
Even as the American middle class has shrunk, it has gone through a transformation. The 53 million households that remain in the middle class — about 43 percent of all households — look considerably different from their middle-class predecessors of a previous generation, according to a New York Times analysis of census data.
In recent years, the fastest-growing component of the new middle class has been households headed by people 65 and older. Today’s seniors have better retirement benefits than previous generations. Also, older Americans are increasingly working past traditional retirement age. More than eight million, or 19 percent, were in the labor force in 2013, nearly twice as many as in 2000.
As a result, while median household income, on average, has fallen 9 percent since the turn of the century, it has jumped 14 percent among households headed by older adults.
The growing prominence of older people in the middle class reflects, in part, the way Social Security and Medicare — originally set up as safety nets to protect seniors from falling into poverty after retirement — have provided a substantial cushion for them against hard times.
Married couples with children — who make up a category that is shrinking over all — are diminishing even faster as a share of the middle class. In the late 1960s, about 45 percent of all households included married adults and their offspring. But among middle-class households, more than 60 percent had that traditional family arrangement.
Today, married couples with children at home make up just a quarter of households. But even as they diminished as a share of the population, these families surged up the economic ladder as more married women went to work in the paid labor force. By 2000, 42 percent earned more than $100,000 in today’s dollars.
The most recent recession put a halt to the advances of even that generally successful group. Its share in the middle class has fallen by three percentage points and the share earning less than $35,000 has increased.
Households headed by adults 65 and older are not shown in the family status charts.
Sources: U.S. Census Bureau; Minnesota Population Center/IPUMS
“In the Great Recession, we lost a lot of middle-income jobs and we gained a lot of low-paying jobs,” said Michael R. Strain, resident scholar at the right-of-center American Enterprise Institute. “That’s a slower-burning thing, but it increased in ferocity during the recession, and people are feeling it.”
For more than two decades, John D’Amanda, 54, earned about $30,000 a year running a window-washing service in Oakland, Calif. He had a car and an apartment. Then, in 2009, the calls stopped coming in. His customers no longer had the luxury of paying for someone to wash their windows.
Mr. D’Amanda got a job at a McDonald’s, where he has worked ever since, now earning 25 cents above the state’s new minimum wage of $9. He pays $350 a month in rent to share a small bedroom with a roommate.
“I’m barely able to afford that,” he said.
These days, most middle-class adults reached their status through higher education. As recently as 1992, half of all middle-class households were headed by someone with a high school education or less, according to the Times analysis. Today, only 37 percent of the middle class has not been to college.
Geography also matters. The biggest declines in middle-class households during the previous half-century occurred in the Northeast — states like Massachusetts, Connecticut and New Jersey — where industrial economies gave way to mass suburbanization and increased affluence.
According to a New York Times poll in December, 60 percent of people who call themselves middle class think that if they work hard they will get rich. But the evidence suggests that goal is increasingly out of reach. When middle class people look up, they see the rich getting richer while they spin their wheels.
“The middle has basically stayed the same; it hasn’t improved,” said Lawrence F. Katz, an economist at Harvard University. “You’ve got an iPhone now and a better TV, but your median income hasn’t changed. What’s really changed is the penthouse has become supernice.”
Still, there are some recent signs of hope for the middle class. The economy is improving and more jobs are being created, many of them in better-paying categories like professional services, health care and even a reviving manufacturing sector.
Jason Pappas’s prospects, for example, are looking up. Mr. Pappas, 32, from Muncie, Ind., was earning about $42 an hour as an iron worker in the mid-2000s, but building projects dried up during the recession, pushing him onto the unemployment rolls for a year and a half.
He eventually found a job as a truck driver. Today, he earns just over half the hourly wage he made as an iron worker, but he is happy to have a steady job.
“It pays the bills,” he said, “and I have medical insurance.”
Moreover, Mr. Pappas just learned that he was being promoted to supervisor. Soon, with overtime, he’ll be earning $80,000 a year.
He is feeling a lot better about his future. “Hard work pays off,” Mr. Pappas said.
Obama Hits The Koch Congress Where It Hurts By Proposing More Drilling Restrictions On ANWR
By: Jason Easley
Sunday, January, 25th, 2015, 6:06 pm
President Obama stayed five steps ahead of the Republican controlled Congress by announcing his administration’s plan to protect more of the Alaska National Wildlife Refuge from drilling.
The president said:
Alaska’s National Wildlife Refuge is an incredible place. Pristine, undisturbed, it supports caribou and polar bears, all matter of marine life, countless species of birds and fish, and for centuries it’s supported many Alaska native communities, but it’s very fragile. That’s why that my Department of Interior has put forth a comprehensive plan to make sure that we’re protecting the refuge and that we’re designating new areas, including coastal plains for preservation. And I’m going to be calling on Congress to make sure that they take it one step further. Designating it as a wilderness, so that we can make sure that this amazing wonder is preserved for future generations.
The Department of Interior is proposing a plan that would reccomend that, “12.28 million acres – including the Coastal Plain – for designation as wilderness. The Service also recommends four rivers – the Atigun, Hulahula, Kongakut, and Marsh Fork Canning – for inclusion into the National Wild and Scenic Rivers System. Currently, over 7 million acres of the refuge are managed as wilderness, consistent with the Alaska National Interest Lands Conservation Act of 1980. However, more than 60 percent of the refuge – including the Coastal Plain – does not carry that designation. Designation as wilderness would protect and preserve the refuge, ensuring the land and water would remain unimpaired for use and enjoyment by future generations. Only Congress has the authority to designate Wilderness areas and Wild and Scenic Rivers.”
The Republican chairwoman of the Senate Energy Committee, Sen. Lisa Murkowski of Alaska vowed to fight the new plan, “What’s coming is a stunning attack on our sovereignty and our ability to develop a strong economy that allows us, our children and our grandchildren to thrive. It’s clear this administration does not care about us, and sees us as nothing but a territory. The promises made to us at statehood, and since then, mean absolutely nothing to them. I cannot understand why this administration is willing to negotiate with Iran, but not Alaska. But we will not be run over like this. We will fight back with every resource at our disposal.”
As the Koch Republican run Congress is trying to pass Keystone XL, President Obama took another pro-environment step against the GOP agenda. Republicans have been trying to open up ANWR to more drilling since 1977. Before the latest flare-up of the issue, former President George W. Bush tried to get Congress to reverse the ban on offshore drilling.
While the president continues trying to move the country forward towards a sensible and self-sustaining energy policy, Republicans continue to do Big Oil’s bidding. The Alaska economy is dependent on drilling, so their opposition to the president’s conservation plan is understandable, but Obama was sending a message to the American people. The president is laying out an agenda for the Democratic Party that paints a clear contrast with what the Republicans are offering.
While Republicans are bogged down on Keystone XL, President Obama has already moved five steps ahead.
Boehner and McConnell Bomb On 60 Minutes When Asked For GOP Alternative to Obamacare
By: Jason Easley
Sunday, January, 25th, 2015, 8:14 pm
Speaker of the House John Boehner and Majority Leader Mitch McConnell delivered a disastrous appearance on 60 Minutes, the lowlight of which was their complete inability to discuss the Republican alternative to Obamacare.
Speaker Boehner went on a dodge and weave filibuster when asked what the Republican alternative to Obamacare was, “Providing more access we could have done without taking control of the entire healthcare system. When you look at Obamacare, it’s a perfect example of what Washington does. It’s a one size fits all approach for the whole country all driven by Washington bureaucrats. I’ll bet they’ve hired tens of thousands of people between the IRS and over at Health and Human Services just to run this. All of the decisions, all of the rules decided by Washington. We have a wide, diverse country, and I just think it’s time for us to look at this differently. For those who don’t have access to affordable health insurance. Helping those at the bottom I think we’re all for it, but we don’t need Washington to ruin the greatest health delivery system that the world has ever known.”
CBS’s Scott Pelley asked again, “So how do you do it? What’s the Republican plan?” Boehner answered with a weak, “We’re, We’re working on this. Having discussions amongst our members, got a lot of divergent views about how best to go back to a doctor/patient relationship that’s revered.”
Pelley kept hammering away and said that this is one of the biggest criticisms of the Republican Party is that they know what they are against, but can’t tell people what they are for. McConnell said that Pelley was mischaracterizing the success of Obamacare and claimed that the ACA will fail. McConnell said that the chances, of getting rid of Obamacare with Obama in the White House, were slim, but that Republicans were going to make the effort.
Pelley replied, “You don’t have an alternative.”
At this point, Boehner jumped back in and pushed the same old Republican ideas of letting people buy insurance across state lines and medical malpractice insurance reform. John Boehner and Mitch McConnell went on the most watched television news program in the country and promptly fell on their faces. The truth is that Republicans have no replacement plan for the ACA.
Boehner and McConnell both talked about getting rid of the ACA, but what they didn’t mention is that a bill that they each voted for funded Obamacare for another year. Republicans have created a new disaster for themselves on a weekly basis since they have taken over Congress. The new Republican majority was supposed to get things done, but instead has been consumed by ineptitude and infighting while being constantly outmaneuvered by President Obama.
Republicans have had almost six years to come up with an ACA alternative. They have had even longer to come up with a plan to reform health care. The Republican plan is to return the country to a system where tens of millions of Americans lack access to health care, and those with insurance are one medical crisis away from bankruptcy.
The Republican Party has no alternative. Even worse, they treat the American people like they don’t have a clue.
Alan Grayson Was Right! They Want You To 'Die Quickly'
At least they're finally being honest about it. Remember when Republicans and their conservative media counterparts went into paroxysms of outrage over Alan Grayson's floor speech calling out conservatives for acting as de facto death panels?
Behold, Sunday's AEI op-ed piece in the Washington Post, aptly titled "End Obamacare and people could die. That's okay."
Written by Republican KochHead Michael R. Strain, the crux of his argument is this:
In a world of scarce resources, a slightly higher mortality rate is an acceptable price to pay for certain goals — including more cash for other programs, such as those that help the poor; less government coercion and more individual liberty; more health-care choice for consumers, allowing them to find plans that better fit their needs; more money for taxpayers to spend themselves; and less federal health-care spending. This opinion is not immoral. Such choices are inevitable. They are made all the time.
Scarce resources? That's rich, coming from a guy whoring working for oligarchs who want for nothing but more liberty to strip a few extra resources from poor people. And please spare me the faux concern about the poor, which is a straw man intended to make readers believe they give a damn.
This, from the same group of people who insist there can be no exceptions -- ZERO -- to abortion choices. Women may not choose even if their pregnancy threatens their lives, or happened as a result of rape or incest. No choices. Because liberty.
This, from the same group of people who argue that the poor just need a bootstrap but no cash, and certainly no assistance in the form of living expenses or food to survive. Because you know, those programs simply drain resources and drive up the debt. Because liberty.
This, from the same group of people who argue that the way to help the elderly with their health care is to hand it off to private insurance companies and shift the burden over to those least able to afford it. Because liberty.
Strain continues his argument with this:
Consider this question: Should society have as its goal that the government prevents all deaths from any health-related ailment other than natural causes associated with ripe old age? The notion is absurd — to both conservatives and liberals. There are limits to the proper amount of scarce resources, funded by taxpayers, that Washington should redirect toward health care.
Neither should society have as its goal leaving its citizens -- young and old alike -- as slaves to corporate health care providers who profit on the backs of the sick and dying. Because general welfare.
For a think tank who proclaims at every turn that the U.S. Constitution is their sole guide, how do they interpret the general welfare clause, which appears in two places; the preamble and the taxation and spending section?
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
The United States' general welfare is not served by leaving health care decisions in the hands of the rich and privileged, Mr. Strain. The strength of this country rests on its people. If those people are dying of preventable disease or living with untreated chronic disease it hurts the work force, it hurts the economy, and it hurts the oligarchs.
As a bone, Mr. Strain does concede that some form of universal healthcare should be available, but not for those everyday sorts of things. Just catastrophes. Clearly Mr. Strain has not studied health care delivery carefully enough if he thinks it's such a burden to cover someone's annual sinus infection.
That sinus infection could be a sign of something else -- an autoimmune condition signaling other, deeper more concerning factors. That chronic bronchitis could be the first sign of COPD, which can respond to less expensive treatments and more rapid intervention to prevent the onset of a more expensive lung condition such as emphysema. Even the acne your kids have can be a warning sign.
It wasn't all that long ago that people didn't go to dentists to have their teeth cleaned. They waited until they had an abscess or toothache and ended up paying a fortune in dental bills to take care of the problem. Either that or their teeth just fell out, leaving them with a host of other health problems to deal with. Insurance companies discovered that the cost of covering two teeth cleanings per year mitigated costs because problems were caught and treated sooner.
The idea of universal coverage limited to catastrophe is also meant to foreclose people with chronic conditions from having access to health insurance. By offering the bare minimum as a form of "universal health care", those with chronic conditions will be shut out of the market because adverse selection will force them to be.
So no. Universal coverage of catastrophic illness is not enough, nor does it serve the general welfare of the United States. The ACA (Obamacare) is imperfect, but it is actually turning the tide on health care issues in this country. For the first time, medical bankruptcies are slowing down. For the first time, people who already had health issues are getting them treated before they turn into catastrophes. These are of great benefit to those people and the nation as a whole.
Finally, the "replacement plan" Mr. Strain proposes is exactly the plan outlined on The Project 2017 site I wrote about last year.
The Burr-Coburn-Hatch plan would repeal the Affordable Care Act, including the individual mandate to purchase insurance, and leave the current system of employer-sponsored coverage largely in place. It would cap the tax preference for employer-provided coverage (though only for extremely generous plans) and use the revenue to provide a tax credit for people who don’t get their health insurance through their jobs. Their plan would provide “continuous coverage” protection, so that people who remain enrolled in insurance can’t be financially penalized for getting sick; offer new federal funding for high-risk pools; and allow Medicaid participants to receive the tax credits and enroll in individual-market plans. A paramount goal of this proposal is to ensure that no one who is or becomes gravely ill goes without adequate medical care.
I bold-faced the first sentence of Strain's description there to put an exclamation point on what it means to repeal the Affordable Care Act altogether. Here are your bullets:
Exclusions for pre-existing conditions
Annual and lifetime caps on treatment
Excessive costs for those with pre-existing conditions by shoveling them into state-based high-risk pools
No coverage for preventative care
Children over age 22 will be forced to buy their own health insurance, whether or not employed
Shoot these bullets at conservatives like any good Second Amendment believer would.
John McCain Humiliates Himself On CBS By Claiming Obama’s Lost Touch With Reality
By: Jason Easley
Sunday, January, 25th, 2015, 4:34 pm
While claiming that President Obama is delusional, Sen. John McCain humiliated himself and revealed why he doesn’t belong in the United States Senate.
SEN. JOHN MCCAIN (R), ARIZONA: I’m afraid that he and the president have lost touch with reality.
Iran is on the march throughout. In Yemen, it’s not AQAP that has taken over the government. It’s the Houthis, who, guess what, are backed and supported by the Iranians. The Iranians are now either dominant or extremely influential in Iraq, Lebanon, Syria, Yemen.
They’re on the move in Bahrain. And they are winning. And there is no — I did not hear Mr. McDonough articulate a strategy, except that we will fight against these people, which is nice to know.
But when you look at the map, the Iranians are on the march. AQAP and the ISIS in both Iraq and Syria are doing quite well. There is no strategy to defeat them. For example, in Kobani, we have been bombing Kobani for months with the U.S. airpower and they are still there. ISIS continues to consolidate their position and attract thousands of young people from all over the world.
And, believe me, I agree with the director of British intelligence, MI5, who gave a speech last week saying that these young people mainly from other countries that are now in Iraq and Syria will — are a direct threat to the United States of America and Great Britain.
So there is no strategy. It is delusional for them to think that what they’re doing is succeeding. And we need more boots on the ground. I know that is a tough thing to say and a tough thing for Americans to swallow, but it doesn’t mean the 82nd Airborne. It means forward air controllers. It means special forces. It means intelligence and it means other capabilities.
In other words, McCain is arguing that the country has gone to hell in a handbasket since voters decided not to elect him president in 2008. Sen. McCain has become a national embarrassment. His solution is always to send in more American troops. McCain has no policy. He constantly repeats the same call for more boots on the ground, even though the American people are adamantly opposed to sending American troops anywhere.
President Obama’s strategy is working. The problem is that the Obama strategy doesn’t involve starting another war. Sen. McCain’s constant defiance of the will of the people that he is supposed to be serving represents a danger to every American. McCain is the one who is out of touch with reality. It isn’t 2002 anymore. Republicans can’t scream terrorist and expect the American people to mobilize behind their cries for war.
Sen. McCain’s (R-AZ) criticisms of the president are rooted in sour grapes. Obama won. McCain lost, and nearly seven years later the Republican senator is still trying to undermine the current administration. McCain’s act has grown stale and tired. It is time for the Sunday shows to stop giving this broken record of a senator airtime.
Presidential hopefuls Marco Rubio, Rand Paul and Ted Cruz suck up to billionaire Kochs at secretive event
26 Jan 2015 at 06:48 ET
Three potential Republican presidential candidates appeared before a gathering of wealthy donors organized by the conservative billionaire Koch brothers in California on Sunday night.
The summit, held at a luxury resort near Palm Springs sealed off to outsiders, drew Republican Senators Marco Rubio from Florida, Rand Paul from Kentucky and Ted Cruz from Texas.
It was organized by brothers Charles and David Koch, successful industrialists who bankroll conservative causes across America. Access to their network of money and influence is alluring to some potential Republican presidential hopefuls.
The Kochs have a private network that spent hundreds of millions of dollars in recent elections and a donor list that is wealthy, diverse and hungry for a Republican candidate that can win the White House in 2016.
The Koch event capped a busy two days where the long road to the Republican nomination appeared to have begun in earnest.
Eight potential Republican candidates made speeches at a separate gathering in Iowa on Saturday.
At least a dozen Republicans are showing interest in 2016. Former Florida governor Jeb Bush and former Republican presidential nominee Mitt Romney are among those seriously looking at White House bids.
Chris Christie, the Republican New Jersey governor, has formed a political action committee, a major step to a presidential run, the Wall Street Journal reported Sunday.
On Sunday night, Republican senators Rubio, Paul and Cruz discussed domestic and foreign policy. They were being hosted by Freedom Partners Chamber of Commerce, a non-profit organization backed by the Koch brothers.
“STRUGGLE FOR FREEDOM”
Freedom Partners and other Koch political fundraising entities are structured under the U.S. tax code so that their donors, and how much money they give, do not have to be disclosed.
The political advocacy network run by the Koch brothers aimed to spend $290 million on advertisements and messaging ahead of the 2014 mid-term elections.
The Koch brothers are frequently criticized by Democrats as being secretive bankrollers of Republican causes and campaigns.
The press was not allowed access for the California gathering. Freedom Partners released excerpts of a speech by Charles Koch to attendees on Saturday night, in which he said “the struggle for freedom never ends”.
An internet feed of the three senators’ discussion was also provided. Lifting people out of poverty, and whether a federal minimum wage was a potential solution, particularly animated them.
“I think the minimum wage constantly hurts the most vulnerable,” Cruz said.