>Over the last two years, there has been a massive increase in the number of people who have no place to turn except to the government. Enactment of the Obama administration’s health care reform legislation demonstrates the growing power of this burgeoning constituency—a constituency which will reap a disproportionate share of the $1 trillion in new health care spending over the next decade.
There are many ways to measure the expanding multitudes of those in need. From February 2008 to February 2010, the number of unemployed men and women doubled from 7.4 million to 14.9 million.
In addition to these almost 15 million unemployed, the number of people who say they want to work, but who have given up trying, grew from 4.8 million to 6.2 million over the same period. Added to these are the people working part time who cannot get regular jobs: this population grew from 4.8 million to 8.9 million. Altogether, this makes a total of 30 million Americans out of work or under-employed.
The numbers are bad enough, but there is a growing consensus among economists that the unemployment problem is likely to become structural—no longer a temporary phenomenon.
One of the most striking indicators of the potentially enduring unemployment status of many of those now out of work is the increase in the number of people who have been without jobs for six months or more. These people have the hardest time making it back into the workforce, and the growth of this population suggests that more and more people who lose a job face the danger that unemployment will become permanent.
For most of the past decade, the number of people out of work for 27 weeks or more fluctuated from a low of 649,000 in 2000 to a high of 1,936,000 in 2003. In February 2008, there were 1.3 people unemployed for at least half a year. In February 2009, the number shot up to 3 million, and by February, 2010, it had multiplied to 6.1 million – a 469 percent increase in two years.
The combination of persistent, prolonged unemployment, record deficits, the refusal of Republicans to raise taxes, the underfunded Social Security Trust Fund, and a demographic transition moving the nation closer to a non-white voting majority have, together, revived, enlarged, and intensified the battle for limited government resources—pitting those seeking to protect what they have against those seeking more.
The ranks of those who identify with either the “haves” or the “have-nots” are swollen, while the number of those seeing themselves as in the middle, centrally positioned, has declined.
On the “have-not” side of the ledger, inflation-adjusted household income fell by 3.6 percent between 2007 and 2008, from $52,163 to $50,303. The number of people with incomes lower than 125 percent of the poverty line rose by just under 3 million, from 50.9 million (17.0 percent of the population) to 53.8 million (17.9 percent of the population) during the same period. Worsening poverty will inevitably become evident when data for 2009 is available. Over the past two years, the number of men and women working at least 35 hours a week in the U.S. fell nearly 11 million, from 121.47 million in February 2007, to 110.84 million in February 2010. To keep up with population growth, the economy would have had to add 4.9 million new jobs.
These developments are functioning to aggravate fear among the “haves” that the competition for resources cannot be resolved by traditional means – that is, by economic growth. And those fears are compounded by official projections that the total federal debt will reach $15 trillion by 2020. The February 12 re-enactment of “pay-as-you-go” (PAYGO) legislation will, if enforced, serve to sharpen the battle over taxes and spending. Net annual interest on the debt will more than triple during the next ten years, according to the Congressional Budget Office, shooting from $207 billion in 2010, to $723 billion in 2020, more than doubling as a share of GDP, from 1.4 percent to 3.2 percent.
The current economic straitjacket is forcing government constraint that is turning traditional policy conflicts between the “haves” and “have-nots” into a zero-sum struggle, in which the gains of one side are at the expense of the other. This exacerbated resource competition over limited government dollars makes it extremely difficult to persuade doubters that the Obama administration’s health and energy agendas can be achieved with little or no pain.
In addition, the Senate is scheduled in April to determine how to prevent a devastating 21 percent cut in Medicare payments to doctors, a cut which is required under current law. If no action is taken, the number of doctors refusing to take Medicare patients is likely to explode, creating a major political problem for members of Congress. Should Congress step in and prevent the cuts, it will cost the government roughly $200 billion over the next ten years. Many center-right Senators—including some Democrats – insist that legislation approving higher physician pay be enacted under the rules of PAYGO. In that case, Congress will have to find areas to cut to make up for the added spending. The zero-sum game will continue.
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The elderly may be the most critical of health care reform and most wary of the Democratic administration, but they are the leading edge of a broader defection. Public opinion polling on health care and data on Obama’s favorability ratings show that voters who feel they have the most to lose from health care reform – voters who fall into a reconfigured coalition of “haves”—are not primarily well-to-do voters. Instead, the most apprehensive are those in the middle- and lower-middle class, a majority of them white.
Surveys by the Wall Street Journal/NBC, by Gallup, and by the Kaiser Foundation all point to a concentration of dissatisfaction among whites, many without college degrees, with family incomes in the $50,000 to $90,000 range. Gallup, on March 24, found that pluralities of those with incomes between $25,000 and $59,999 and $60,000 to $89,999 thought passage of the health care bill was “a bad thing,” 45-43 and 48-42 respectively, while pluralities of those both below and above those income levels believed it was “a good thing”—65-23 for those on the bottom, and 49-46 for those making $90,000 or more. Some 73 percent of non-whites thought passage was “a good thing,” while only 40 percent of whites did.
These same voters have been the driving force behind the steady growth over the past year in the percentage of voters who think they will personally be worse off with the passage of health care reform. In monthly surveys from February 2009 to March 2010, Kaiser found relatively little change in the percentage who think they will be better off with health care reform. From February to November, 2009, this figure stayed in the high 30s and low 40s. After that, it dropped modestly to the mid-30s, and was at 35 percent in March. In contrast, the percentage convinced they will be worse off has risen steadily over the 14 months, nearly tripling from 11 percent in February 2009 to 32 percent this March.
These dissenting voters, even though many are of modest means, see themselves as having something to lose as access to health care is opened to 32 million currently uninsured Americans.
There is another constituency—self-employed men and women (often barely afloat)—who identify with the “haves,” their present economic status notwithstanding. What they have is not so much current wealth, but a history of, or aspiration towards, status, authority, and autonomy. They are not willing to relinquish their past beliefs or their goals for the future. They conceive of themselves as self-reliant and as integral to what was once an undisputed notion of “American Exceptionalism.” The number of the self-employed is expanding at a much faster pace than the population as a whole—to some extent out of necessity, as firms impose major cutbacks, forcing employees to go out on their own. The best measure of the rate of growth of this population, which includes proprietors of small businesses hit by the recession, is the number of persons who file “non-employer” tax returns, a figure tracked by the U.S. Census. If there is one group that has strong anti-tax and anti-spending views, it is the nation’s self-employed small businessmen and women. Few livelihoods reinforce individualism as much as having to work for yourself, pay your own taxes (including Social Security), and calculate the cost and necessity of health insurance—and too often, nowadays, see your ledger bleeding red ink. The communitarian instinct is not strong among these entrepreneurs.