Poverty, the Partisan Divide, and the Future of Democracy

Bob Sheak, May 3, 2021



President Biden and his administration are advancing a progressive agenda to reduce poverty and inequality. It is an agenda that is in the tradition of the New Deal, only with more sensitivity and commitment to black Americans and other people of color. Biden and Democrats in the U.S. Congress have already passed the American Rescue Plan, the “first major legislative act under President Biden, at an estimated cost of $1.9 trillion. The plan, discussed in this post, is filled with a broad array of programs, some as broad as expanded aid to nearly every family with children and others as targeted as payments to Black farmers. Biden and the Democrats also have other plans to create jobs, support unionization, and increase government support for infrastructure programs.

However, Republicans and their allies and supporters will oppose them all. They have a long record of working to reduce or minimize the role that government plays, with certain exceptions such as on military spending. Certainly, they as well have a long-standing antagonism to social-safety net programs, a disdain for the poor, a love of low taxes, and, overall, support for a selectively small, deregulated federal government as well as the privatization of any government function that can yield a profit.

This post considers these two irreconcilable views, with a special focus on the issue of poverty. This is a conflict of epoch proportions, the outcome of which will be decided politically. The side that can marshal the support of the greatest number of voters will win. The Republicans are doing their utmost to find ways to suppress the vote of voters deemed favorable to Democrats.

Getting an idea of who the poor are

Poverty in the U.S. is complex, diverse and varies in its impact over time. One thing is clear. It affects a lot of people. The evidence indicates that a majority of people in the U.S. experience one or more spells of poverty during their lives, or times when they cannot afford or have access to the necessities of life in the U.S.

There are a range of experiences. At one end of the poverty spectrum, some people will experience only one short-term poverty spell (no more than a year). At the other end, some will continue persistently being poor for many years (5 or more years) (Mark R. Rank, et. al., Poorly Understood: What American Gets Wrong About Poverty).

In the first section of the book, Poorly Understood, the authors, Mark R. Rank, Lawrence M. Eppard and Heather E. Bullock, challenge the notions that poverty is experienced by only a small minority of the population, mostly people of color, who spend long continuous periods of time on welfare, and who live in inner-city neighborhoods.

The authors draw on evidence from the Panel Study of Income Dynamics (PSID) as one important source for their analysis. They describe it as follows.

“The PSID is a nationally representative, longitudinal sample of households interviewed from 1968 onward. It has been administered by the Survey Research Center at the University of Michigan, and it constitutes the longest running panel data set both in the United States and the world. The PSID initially interviewed approximately 5,000 U.S. households in 1968, obtaining information on roughly 18,000 individuals within those households. These individuals have since been tracked annually (biennially after 1977), including children and adults who eventually break off from their original households to form new households…. The sample is representative of the entire nonimmigrant U.S. population” (p. 10).

By age 75, 58.5% of American will experience at least one spell of poverty below the official poverty line (which is adjusted for inflation each year). Sixty-eight percent will experience poverty below 125% of this line, and 76% will experience it below the 150% line (p. 11). The basic implication of these data is that poverty, low incomes according to the official measures, affects a majority of Americans by the time they reach the age of 75.

The best longitudinal research, including their own, also challenges the idea that most poor people are mired in a cultural of poverty that keeps them poor for many years, frequently their entire lives, and that it is typically intergenerational. Rank and his colleagues rebut this view, writing: “It turns out that a much more accurate picture is that poverty spells tend to be short but frequent.” They add: “within 1 or 2 years, the majority of people escaped from poverty. Within 1 year, 53% of new spells ended; 70% ended within 2 years, and more than three-fourths within 3 years” (p. 25).

The entrances and exits into poverty are “most often caused by changes in employment status and/or financial resources,” say “getting laid off from a job or having one’s hours cut.” There are other causes as well, such as, changes in family structure; for example, the birth of a child, divorce.

Welfare use?

The PSID data on welfare usage yield similar results. By age 65, 65% of Americans will have spent some part of a year getting benefits from a means-tested welfare program (e.g., Supplemental Nutrition Assistance [SNAP], Medicaid), while 58.7% will have been on welfare parts or the whole of two years, 54.2 percent for three years, 48.0% for four years, and 40.3 percent for 5 or more years (p. 13). The authors point out that “only 15.9 percent of Americans will reside in a household that receives a welfare program in 5 or more consecutive years” (p. 13).

The dynamics of welfare use

Some of the poor will hold jobs (part-time, intermittent, full-time) but not earn enough to lift them out of poverty. In some cases, people will find jobs that raise their income enough to lift them out of poverty for a time but then fall back into poverty. Others will remain poor permanently. However, the common pattern, already mentioned, is for people who experience poverty to move in and out of poverty. Welfare use follows the diverse paths of poverty, with short-term and long-term usage, though some do not ever obtain any benefits. The U.S. welfare state overall, and at least since the 1970s, is less generous than the social-welfare systems of most other “rich” countries. For documentation of the last point, see the extraordinarily well researched analysis by Lane Kenworthy in his book, Social Democratic Capitalism (publ. 2020).

Refuting other myths of poverty

Furthermore, as Rank and his colleagues find (chap. 5), there are at any given time more whites who are poor than blacks, though the poverty rate is greater for blacks than for whites. While there are concentrations of inner-city poverty, poverty increasingly exists in the suburbs and, as always, in rural areas. Some poverty conditions are as wretched as anywhere in the world (see examples in Catherine Coleman Flower’s book, Waste: One Woman’s Fight Against America’s Dirty Secret, and Kathryn J. Edin and H. Luke Shaefer’s book, $2.00 a Day: Living on Almost Nothing in America).

Conflicting Perspectives on the Poor and the causes of Poverty

Those on the political/ideological Right, view poverty as the result of bad choices and/or a culture of poverty. Either way, the poor are said to be responsible for their poverty. And most people, regardless of the conditions affecting their early years, can achieve a non-poverty standard of living with enough determination and hard work.

With perhaps exceptions for those with disabilities and old age, those experiencing poverty therefore do not deserve much or any public assistance. There is a Social Darwinist tilt to the thinking about poverty on the Right (e.g., the Republican Party). It is reflected in the opposition to social-welfare spending by the government and its preference for charity/philanthropy as the principal recourse for the deserving poor. This general attitude goes back to and echoes the harsh Elizabethan poor laws of the early 17th century, with its disdain and punitive treatment of the “undeserving” poor. Historian Michael B. Katz has documented this story in his remarkable books – The Undeserving Poor and In the Shadow of the Poorhouse. Aside from the CARES Act, Trump and his administration were well within this tradition, especially when it came to people of color.  

Centrist and progressive Democrats tend to view poverty as a result of a social system in which there are too few opportunities for some people to earn better-than-poverty wages, or to acquire adequate education, housing, and health care. When Democrats think of the roots of poverty – and inequality – they think of system- or institutionally-rooted problems.

From this view, the conditions and lack of opportunities that cause poverty is said to be the result of the decisions of corporate CEOs and their boards who outsource work to low-wage workers living in countries where there are low taxes and weak or nonexistent regulations. They fire workers who advocate for unions and subvert unionization drives. They designate workers as contract workers so they don’t have to pay for job-related benefits. During recessions, they lay off workers and then often replace them with lower-wage workers. They increasingly automate workplaces when they can. And they hire undocumented workers, to whom they can pay lower wages. They make sure that the executives and shareholders are well compensated while letting workers’ wages stagnate, as they have for decades.

The policies of government play a big role in the creation and continuation of widespread poverty. Consider the Republican Party’s role. When Republican have control of the White House and/or the Congress they cut back spending on the safety net, weaken unions, and imposed restrictive regulations on whom is eligible for benefits. Though some Democrats have done such things as well. Another, more radical view, is that the source of poverty can ultimately be traced to the corporate-dominated capitalist economy that is too unregulated, too privatized, where the rich are under-taxed, and where the economy is subject to regular contractions, and a government that is dominated by the interests of mega-corporations and the rich, so that we get a kind of socialism for the rich.

Both centrist and progressive Democrats see a pressing need to reform or radically change both the capitalist and state sectors, either incrementally (centrists) or structurally (progressives). Republicans favor the status quo.

The effects of poverty

The accumulation of disadvantages

Growing up in poor families create obstacles to the opportunities that may exist. Rank, Eppard and Bullock refer to the concept of “agency” in this context. They write: “True agency requires that individuals have their capabilities fully developed and that they have unobstructed access to important resources (economic, social, cultural, and so on).” They continue.

“All of these components are essential. Capabilities and resources have little use if one does not have access to opportunity pathways within which to utilize them. Likewise, it is difficult to make the most of opportunity pathways without the requisite capabilities and resources” (p. 138).

They add:

“A large body of research clearly demonstrates that the families we are born into, the neighborhoods and communities we grow up in, the schools we attend, the peer networks we are embedded in, the structural arrangement of our country of birth, and a variety of other important social contexts and forces combine to profoundly influence how much agency we ultimately possess.”

The forces that limit individual agency

We do not choose the social contexts and forces that shape us. And there are huge inequalities reflected in the vast range of social contexts and forces. On this point, they write: “high levels of inequality are built into the structure of our society due to the decisions that have been collectively made, and this inequality is getting worse.” The reference to “collectively made” is ambiguous and misleading.

The institutional and social arrangements that exist have been disproportionately influenced by the powerful and rich in the society. See, for example, the analysis by Jacob S. Hacker and Paul Pierson in their book, Let Them Eat Tweets: How the Right Rules in an Age of Extreme Inequality). And, then there is the long and devastating history of slavery, Jim Crow, and ongoing structural racism that still afflicts blacks and people of color, as well as many whites. Isabel Wilkerson documents the racism in U.S. history, as many others have, in her highly acclaimed book, Caste: The Origins of Our Discontents. The point is that some few have been disproportionately responsible for the “collectively made” poverty that exists.

The Deprivations of the poor and near-poor are identified

Paul Buchheit points to evidence that half of America is in or near poverty and poverty has risen more sharply during the pandemic than at any time since the 1960s (https://commondreams.org/views/2021/02/22/2021-update-half-america-or-near-poverty).

He refers to the World Bank’s definition of poverty, which is a “pronounced deprivation in well-being.” In this sense of poverty, there are millions of Americans who are in severe deprivation. This is reflected, he writes, in the following examples: “millions of Americans who are unable to pay for medical treatment; who suffer the stress of delinquent rent and mortgage payments; who see a steady decline of jobs that pay enough to support a family; and who are victims of the surge in drug and alcohol and suicide “deaths of despair” that continue to increase among poor Americans during the COVID-19 crisis.”

Buchheit highlights his argument by referring to five examples of widespread deprivation in the U.S.

#1 – “The Majority of American Households Are Living Paycheck-to-Paycheck During the Pandemic.” He refers to a Washington Post summary of some of the evidence:  “According to Nielsen data, the American Payroll Association, CareerBuilder and the National Endowment for Financial Education, somewhere between 50 percent and 78 percent of employees earn just enough money to pay their bills each month….[this was] before the coronavirus pandemic….[since then] the number of first-time unemployment claims has exceeded 1 million per week, an unprecedented number in U.S. history.” Additionally, “an NPR review states that ‘survey after survey for years has found that most people in the U.S. live paycheck to paycheck.’ There is more. “Both Schwab’s 2020 Modern Wealth Survey and a recent Harris Poll found that a sizable majority of Americans are suffering financial stress during the pandemic. The American Psychological Association concurs. In Bankrate’s latest polling numbers, 6 out of 10 Americans would be unable to afford an unexpected $1,000 expense.”

#2 – “Half of Americans are experiencing food and rent insecurity”

Brookings reports that two in five households with mothers with pre-teen children

were food insecure, meaning that ‘a household has difficulty providing enough

food due to a lack of resources.’” With respect to rent, there are “twelve million

renters [who] owe an average of $5,600 in back rent and utilities. The $1,400

stimulus payment will help keep some housed for just a few months. The “rent and mortgage moratoriums will help some families, but they end in March and June, respectively. But then what?

#3 – “Over Half of Black and Latino Families Lack the Funds to Sustain Them for Three Months at a Poverty Level”

Researchers at Duke University have found that “57 percent of Black families with children and 50 percent of Latino families with children were poor in terms of net worth in 2019,” while the rate for white families was 24 percent. They have virtually no savings.

#4 – “Almost Half of America’s Children Live in Households that Can’t Meet Basic Expenses”

A Census Bureau Household Pulse Survey conducted in early 2021 found that In October 2020 “one out of every five American kids was living in poverty conditions. And it’s much worse for Black and Latino families. Incredibly, two out of three Black children (and slightly less for Latinos) live in households that “have trouble covering usual expenses.”

#5 – “According to One Careful Study, Over Half of Americans Are Trying to Survive Without Full-Time Living-Wage Jobs”

Buchheit refers here to a study by “Ludwig Institute for Shared Economic Prosperity, which considers part-time workers, those working full-time but earning too little to climb above the poverty line, and discouraged workers who’ve stopped looking for unemployment. As of December 2020, a full 53.9 percent of working-age Americans did not have living-wage full-time jobs.” A Brookings study
The CARES Act relief program made a difference

Buchheit reminds us that government has provided some assistance during the COVID-19 pandemic, especially during the early stage of this epidemic. He refers to research on the impact of the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act. Given scientific opinion, the magnitude of the pandemic, and the dire economic effects, even the Republicans in the U.S. Senate voted for the $2 trillion relief package. NPR staff reported that the Senate vote 96 to 0 in favor of the legislation, including most Republicans. The vote occurred after then “Senate Majority Leader Mitch McConnell (R-Ky) told lawmakers, “Our nation obviously is going through a kind of crisis that is totally unprecedented in living memory” (https://npr.org/2020/03/25/818881845/senate-reaches-historic-deal-on-2t-coronavirus-economic-relief-package).

According to Wikipeida, The CARES Act was touted as “a $2.2 trillion economic stimulus bill passed by the 116th U.S. Congress and signed into law by President Donald Trump on March 27, 2020, in response to the economic fallout of the COVID-19 pandemic in the United States (https://en.wikipedia.org/wiki/CARES_Act).

Specifically, the CARES Act included, according to Wikipedia, “$300 billion in one-time cash payments to individual people who submit a tax return in America (with most single adults receiving $1,200 and families with children receiving more), $260 billion in increased unemployment benefits, the creation of the Paycheck Protection Program that provides forgivable loans to small businesses with an initial $350 billion in funding (later increased to $669 billion by subsequent legislation), $500 billion in loans for corporations, and $339.8 billion to state and local governments.” (For a more detailed analysis, check out Leon LaBrecque’s article at https://forbes.com/sites/leonlabrecque/2020/03/29/the-cares-act-has-passed-here-are-the-highlights.

Some evidence

Buchheit cites research:  

“Researchers at Columbia University estimated that the support provided by the CARES Act, passed with bipartisan support maintained the U.S. poverty rate at a level about 30 percent lower than otherwise expected. Stimulus payments have kept us afloat. An overwhelming majority of Americans are in favor of further relief, and the Biden Administration is preparing a massive stimulus bill to accommodate a troubled populace.”

At the same time, such relief programs are limited, in that “for most Americans, stimulus checks will not sustain family needs for more than a few months.”

For the most part, Trump waged a war on poor people

Nathalie Baptiste and Jessica Washington compile evidence for this argument in a February 14, 2020, article for Mother Jones magazine (https://www.motherjones.com/politics/2020/02/trump-isnt-waging-a-war-on-poverty-hes-waging-a-war-on-the-poor). They report on Trump’s 2021 $4.8 trillion budget proposal that, if passed by Congress, “would further decimate the already weakened social safety net.” It calls for “steep cuts to food stamps, Medicaid, housing assistance, and other welfare programs that millions of Americans rely on.”

The weakening of an already limited social safety net did not begin with Trump, though he intensified its inadequacies. Baptiste and Washington put it this way: “The once-robust social safety net has been steadily dismantled by Republican and Democratic administrations alike. A series of actions, from Ronald Reagan’s fear-mongering about the government subsidizing luxurious lifestyles for welfare recipients to Bill Clinton’s welfare reform that imposed strict work requirement for benefit recipients, have made it tougher than ever to be poor in America. Now Trump is making it even harder.” 

With Democrats in control of the House in 2020, Trump’s budget did not have a chance of being passed into law. However, Trump had “already rolled out a series of bureaucratic changes that [had] begun to take a tangible toll on the country’s most vulnerable populations and will only inflict more damage in the coming years.”

“There’s been an emphasis on attacking the most vulnerable people in our nation,” says Alexandra Cawthorne Gaines, vice president of the Poverty to Prosperity Program at the Center for American Progress. Baptiste and Washington give two examples of the programs that have “taken the biggest hit as a result of this administration’s war on the poor, the sick, and the elderly.”

Food Stamps

They write: “SNAP, which is administered by the US Department of Agriculture, feeds more than 40 million Americans each year. Food stamps are vital for low-income people and families and serve as an economic driver across the country, providing customers and revenue for small grocers.” Such food assistance was first instituted during the 1960s. It never provided by itself the means to acquire an adequately nutritional diet, but it was nonetheless significant.

The program became more restrictive under the Clinton administration, which instituted rules that began to make access to food stamps more difficult than earlier, and Trump would make it even harder. Here’s what Baptiste and Washington write.

“As part of Clinton’s welfare reform, able-bodied adults between the ages of 18 and 50 with no dependents were limited to three months of assistance before they had to prove that they were working at least 20 hours a week. At that point, their benefits would lapse, and they would have to meet certain requirements in order to become eligible again. In the past, governors of states with high unemployment rates could request waivers from the rule, and many able-bodied recipients were able to continue receiving food benefits. Now, the Trump administration’s new rule will tighten the requirements for waivers, making it close to impossible for states to request them. As a result, hundreds of thousands of people will lose SNAP eligibility and have to find new ways to make ends meet.”

Baptiste and Washington illustrate their point with the example of “Mr. Smith, a 45-year-old man living in Washington, DC, scrapes together what passes for a living selling a local newspaper as a street vendor, for which he earns $20 a day—on a good day. Each month, he receives $194 from the Supplemental Nutrition Assistance Program, commonly known as SNAP or food stamps. Free meals at various churches and nonprofits are essential to bolster the food supply he is able to purchase. When he gets his benefits at the beginning of the month, he buys groceries in bulk, either foods he can store in his freezer or those with a long shelf life.

Mr. Smith says, “You have to budget. You have to be really frugal. You have to get three meals a day on $6 or $7.”

However inadequate, a new Trump administration rule, scheduled to be instituted on April 1 (2020), “will cause approximately 700,000 people across the country to be kicked off the SNAP rolls.” This was less than earlier number contemplated by the administration. All of this is done by executive order.

According to Mike Dorning, the rule changes were being considered for some months (https://time.com/5632313/trump-food-stamps-new-regulations). In July 2019, The Trump administration was already moving to end food stamp benefits for 3 million people with proposed new regulations curtailing the leeway of states to automatically enroll residents who receive welfare benefits.

Dorning quotes Debbie Stabenow of Michigan, the top-ranking Democrat on the Senate Agriculture Committee, [who] said the Agriculture Department’s action “is yet another attempt by this administration to circumvent Congress and make harmful changes to nutrition assistance that have been repeatedly rejected on a bipartisan basis.” Stabenow also said: “This rule would take food away from families, prevent children from getting school meals, and make it harder for states to administer food assistance.”

Dorning also quotes what Elaine Waxman, a senior fellow at the Urban Institute, said in testimony last month to a House Agriculture subcommittee: “We particularly worry about food‐insecure households with kids and adolescents. Food insecure children have higher rates of fair and poor health, have higher rates of hospitalization, increased risk of asthma.”

Without SNAP, Mr. Smith isn’t sure how he’ll eat. And he knows what hunger is like. “You’re in survival mode instead of productive mode,” he says of his time without SNAP benefits. “You’re walking around like a bear foraging for food.” But even given SNAP’s limitations, “that three months of being able to eat is a life saver.”  

Cash Assistance

Baptiste and Washington also consider the background of cash assistance and how access to it has been steadily curtailed. The concept of supporting poor Americans with cash assistance was first established in 1935 as part of the New Deal, when the Great Depression sent 15 million Americans into poverty. (There was earlier a system of cash assistance through survivors’ insurance for Civil War veterans and their families, analyzed in great depth by Theda Skocpol in her book, Protecting Soldiers and Mothers: The Political Origin of Social Policy in the United States. It faded away as the survivors died.)

Over the subsequent decades, after the 1930s, welfare became a top target of Republican mockery, culminating in President Ronald Reagan’s ridicule of so-called “welfare queens” living large on the taxpayers’ dime. After Clinton’s welfare reform overhauled the program in 1996 and imposed work requirements, what was once welfare became known as Temporary Assistance for Needy Families, or TANF.

Today, they write, “22 of every 100 US families living in poverty receive cash assistance, down from 68 in 1996.”  They quote LaDonna Pavetti of the Center on Budget and Policy and Priorities who says the program only reaches “families who are really, really desperate and don’t have any other options.” Baptiste and Washington give this example.

 “For instance, a single woman with two children living in South Carolina and collecting TANF benefits receives just $292 each month in cash assistance. That doesn’t cover even a third of the state’s average rent for a two-bedroom home, which is $898. Even in states with more generous benefits—like New Hampshire, where that same family would get $1,066—it doesn’t cover rent for the average two-bedroom unit.

Richard Kogan and his colleagues at the Center for Budget and Policy Priorities offer this additional information on the Trump administration’s proposed cuts in cash assistance (https://cbpp.org/research/federal-budget/cuts-to-low-income-assistance-programs-in-president-trumps-2020-budget-are).

“The 2020 budget would cut the TANF block grant and eliminate the related TANF Contingency Fund, a cut of $22 billion in fundingover the next decade. TANF provides funds to states for short-term income assistance, work programs, and other crucial supports for poor families with children. Such cuts conflict sharply with the budget’s rhetoric on promoting work opportunities for poor families.”

“Specifically, the budget would require states to spend at least 30 percent of federal and state TANF dollars on work activities, such as education, training, and subsidized employment; work supports, such as transportation assistance; child care; and assessment and provision of services such as case management. Half of that required spending (or 15 percent of the total) would have to be in work and training. But the budget doesn’t make any changes that would encourage states to serve the very families that could benefit from most those resources.

“While targeting more TANF funding to key program areas makes sense, the proposal is seriously flawed. Basic assistance (cash income support to needy families) is not included in the list of areas that would receive minimum targeted funding. The combination of less overall funding and new requirements for spending on work programs — without any requirement that state TANF programs fulfill the key mission of ensuring that very poor families with children can meet their most basic needs — could lead states to shift funds away from basic income assistance. That likely would push more families into severe hardship.”

The Democrats and Biden try to do better

The Democrat legislative proposals in 2020 after the CARES Act

The Democratic-controlled House of Representatives passed the HEROES act back in May 2020 and then several subsequent versions of it

Heroes stands for The Health and Economic Recovery Omnibus Emergency Solutions Act or Heroes Act (H.R. 6800)

According to the staff at Investopedia, US Speaker of the House Nancy Pelosi “unveiled [on May 12, 2020] a bill to fund a new round of relief spending to support the U.S. economy in the wake of the COVID-19 crisis and shutdown of wide swaths of the economy” (https://www.investopedia.com/democrats-usd3-trillion-coronavirus-relief-bill-4844752#the-heroes-act). On May 15, 2020, the Democratically-controlled House passed the bill by a vote of 208 to 199, largely on partisan grounds. And then, on Oct. 1, 2020, Democratic legislators passed an updated version of the bill, again with the same result.

In late December 2020, Congress did pass the Consolidated Appropriations Act of 2021, “building on aspects of the earlier Cares Act from March 2020, including extending unemployment insurance payments.” Its price tag was $900 billion.

Sasha Abramsky reports that the Heroes bill “was aimed at delivering trillions of dollars of additional federal funds to support health care systems, unemployment benefits, housing assistance, nutritional programs, as well as money to keep cities and states, public transit systems, schools, and other vital infrastructure functioning. Since then, the House has passed several updated versions of the Act” (https://truthout.org/articles/ever-growing-millions-of-americans-face-eviction-and-hunger-will-congress-act).

Trump and the Republicans made all such Democratic initiatives appear to be partisan and opposed them, claiming that the Act would benefit “only ‘blue states and cities,’ They also hoped through the late spring and summer of 2020 [that] “the pandemic would simply vanish, and the tens of millions of unemployed people would all be able to return to work.” They opposed “expanded unemployment systems, senators such as Lindsey Graham argued that support-oriented measures would sabotage the labor market by providing people with disincentives to re-enter the workforce.” When the Republicans realized the pandemic was not going away, they embraced “much smaller stimulus packages,” and reframed their opposition to the Democrats’ HEROES Act as being fiscally responsible and as stopping the Democrats from funding profligately their favorite programs. All this led to a predictable and extension of “legislative stalemate.”

Meanwhile, Millions of Americans were driven or stayed in poverty or were barely making ends meet. Abramsky offers this summary.

“As a result, in the last weeks of 2020, absent quick congressional action and with the pandemic raging worse than ever, millions of Americans are [were] staring into an economic abyss. Somewhere in the region of 12 million people — millions of them gig workers who don’t qualify, in normal times, for unemployment; and millions more who are now considered to be long-term unemployed and who, again, in normal times would have maxed out their unemployment benefits — will lose their financial lifelines next month” [December 2020]

The problem is deeply rooted in the political-economic system, predates the pandemic, though has been made worse by it. It is reflected in the vastly unequal distributions of income and wealth, creating a situation in which “Three billionaires now possess the same amount of wealth as the bottom half of the U.S. population.” It is reflected in thesomewhere in the region of 13 million households that rent their homes are at risk of eviction once eviction moratoriums end over the coming months,” or that the number of people without health insurance had increased from 26.7 million in 2016 to 29.2 million by the end of 2019. A growing number of people are having difficulty putting enough food on the table. Groups monitoring hunger and food insecurity estimated that 37 million people fell into this category in early 2020. Today, Abramsky writes, “it is 54 million, or one in six Americans. Seventeen millions of these are children. Food banks around the country are reporting unprecedented demand.”

There is more. Abramsky gives examples of how public transit systems are collapsing and public education systems, many already strapped for money, are experiencing reductions in financial support.

Two Decades After the ‘End of Welfare,’ Biden and the Democrats Are Trying to Change Direction

This is the view advanced by Jim Tankersley and Jason DeParle (https://www.nytimes.com/2021/03/13/business-economy/child-poverty-stimulus.html). The article was updated on March 16.

They argue that the policy instituted by President Clinton’s administration, that “celebrated ‘the end of welfare as we know it,’ challenging the poor to exercise ‘independence’ and espousing balanced budgets and smaller government,” is coming to an end, as the current Democratic Party and the Biden administration moves “in the opposite direction.”

“Behind that shift,” they write, “is a realignment of economic, political and social forces, some decades in the making and others accelerated by the pandemic, that enabled a rapid advance in progressive priorities.” At the same time, they wonder how long this change in political direction will last. Here’s how the put it. “Whether the new law is a one-off culmination of those forces, or a down payment on even more ambitious efforts to address the nation’s challenges of poverty and opportunity, will be a defining battle for Democrats in the Biden era.”

The American Rescue Plan

The “first major legislative act under President Biden [is] a deficit-financed, $1.9 trillion ‘American Rescue Plan’ filled with programs as broad as expanded aid to nearly every family with children and as targeted as payments to Black farmers. While providing an array of benefits to the middle class, it is also a poverty-fighting initiative of potentially historic proportions, delivering more immediate cash assistance to families at the bottom of the income scale than any federal legislation since at least the New Deal.”

President Biden signed the plan into law on Thursday, March 11, 2021. Other temporary provisions in the law includes “include extended and expanded unemployment benefits, increased tax breaks for child care costs and an enlarged earned-income tax credit.”  Tankersley and DeParle report that researches say these antipoverty provisions will, among other benefits, “lift nearly six million children out of poverty.”

Propitious conditions led to the advance and passage of the plan. The authors point to a “summer of protests against racial injustice, and a coalition led by Black voters that lifted Mr. Biden to the White House and helped give Democrats control of the Senate, [putting] economic equity at the forefront of the new administration’s agenda.” The backers say that the passage of the plan marks “the beginning of an opportunity for Democrats to unite a new majority in a deeply polarized country, built around a renewed belief in government.”

Biden’s first 100 days – on the domestic side

Peter Baker reports that in his first nationally televised address to a joint session of Congress on April 28, 2021, Biden presented a vision of how he and his administration hope to shift “how the nation serves its people” (https://nytimes.com/2021/04/28/us/politics/joe-biden-government-plans.html).

As Baker puts it, “President Biden laid out an ambitious agenda on Wednesday night to rewrite the American social compact by vastly expanding family leave, child care, health care, preschool and college education for millions of people to be financed with increased taxes on the wealthiest earners.”

 It is a $1.8 trillion social spending plan,” titled the American Families plan, and is intended “to accompany previous proposals to build roads and bridges, expand other social programs and combat climate change. Biden’s vision of government is transformational and in the tradition of Lyndon B. Johnson’s Great Society and Roosevelt’s New Deal. Biden wants to “prove democracy still works, that our government still works and we can deliver for our people.”

But, as Baker points out, “the succession of costly proposals amounts to a risky gamble that a country deeply polarized along ideological and cultural lines is ready for a more activist government and the sort of redistribution of wealth long sought by progressives.” And this is occurring in a political context in which “Mr. Biden’s Democrats have only the barest of majorities in the House and Senate.”

Nonetheless, Biden can now point to the American Rescue Plan as a good start in moving his conception of government’s responsibilities forward, along with the progress his administration has facilitated in vaccinating millions of Americans against the Covid-19 virus.

The American Families Plan

The $1.8 trillion “American Families Plan,” as Biden called his latest proposal, would follow the “American Rescue Plan,” and the proposed “American Jobs Plan,” a $2.3 trillion program for infrastructure, home health care and other priorities, is pending.

Baker describes some of the features of the American Families Plan. It includes $1 trillion in new spending and $800 billion in tax credits. It would finance universal prekindergarten for all 3- and 4-year-olds, a federal paid family and medical leave program, efforts to make child care more affordable, free community college for all, aid for students at colleges that historically serve nonwhite communities and expanded subsidies under the Affordable Care Act.” In addition, it would “extend key tax breaks included as temporary measures in the coronavirus relief package [the already enacted Family Rescue Plan] that benefit lower- and middle-income workers and families, including the child tax credit, the earned-income tax credit, and the child and dependent care tax credit.”

The American Families Plan is to be financed by progressive taxes, including an increase in the marginal income tax rate for the top 1 percent of American income earners, to 39.6 percent from 37 percent. His plan also calls for “increases in capital gains and dividend tax rates for those earning more than $1 million a year. And he would eliminate a provision in the tax code that reduces capital gains on some inherited assets, like vacation homes, that largely benefits the wealthy.”

It is clear that Biden’s plans, if they should become law, would, among other effects, have the effect of reducing poverty. Yet another plan is “For Strengthening Worker Organizing, Collective Bargaining, and Unions”

(https://joebiden.com/empowerworkers). Unions have helped to keep wages up, win medical, pension, and paid vacation time, and have overall been a major force in the Democratic Party. For an in-depth analysis of unions, see Michael D. Yates book Why Unions Matter.

Strengthening Worker Organizing, Collective Bargaining, and Unions

This pro-worker, pro-union plan opens as follows.

“Strong unions built the great American middle class. Everything that defines what it means to live a good life and know you can take care of your family – the 40-hour workweek, paid leave, health care protections, a voice in your workplace – is because of workers who organized unions and fought for worker protections. Because of organizing and collective bargaining, there used to be a basic bargain between workers and their employers in this country that when you work hard, you share in the prosperity your work created.

“Today, however, there’s a war on organizing, collective bargaining, unions, and workers. It’s been raging for decades, and it’s getting worse with Donald Trump in the White House. Republican governors and state legislatures across the country have advanced anti-worker legislation to undercut the labor movement and collective bargaining. States have decimated the rights of public sector workers who, unlike private sector workers, do not have federal protections ensuring their freedom to organize and collectively bargain. In the private sector, corporations are using profits to buy back their own shares and increase CEOs’ compensation instead of investing in their workers and creating more good-quality jobs. The results have been predictable: rising income inequality, stagnant real wages, the loss of pensions, exploitation of workers, and a weakening of workers’ voices in our society.

“Biden is proposing a plan to grow a stronger, more inclusive middle class – the backbone of the American economy – by strengthening public and private sector unions and helping all workers bargain successfully for what they deserve.” Indeed, during the 1930s-1960s, unions played a major role in the New Deal Coalition that expanded “the middle class” and reduced poverty for blacks as well as whites. 

The specific goals of the pro-unions plan are to: (1) “Check the abuse of corporate power over labor and hold corporate executives personally accountable for violations of labor laws”; (2) “Encourage and incentivize unionization and collective bargaining”; and (3) “Ensure that workers are treated with dignity and receive the pay, benefits, and workplace protections they deserve.”

To get a sense of this plan, just consider the substance of the first goal, that is, to “Check the abuse of corporate power over labor.”

Workers are said to be more essential to the economy than CEOs and hedge fund managers.

“While we could survive without Wall Street and investment banks, our entire economy would collapse without electricians to keep our lights on, auto workers on the line building our cars, drivers who deliver all things we need for our daily lives to our markets, firefighters, ambulance drivers, service workers, educators, and millions more.”

Despite the importance of workers, “employers steal about $15 billion a year from working people just by paying workers less than the minimum wage. On top of that, workers experience huge losses in salary caused by other forms of wage theft, like employers not paying overtime, forcing off-the-clock work, and misclassifying workers. At the same time, these companies are raking in billions of dollars in profits and paying CEOs tens and hundreds of millions of dollars.” 

Furthermore: “employers repeatedly interfere with workers’ efforts to organize and collectively bargain. In nearly all union campaigns, corporations run a campaign against the union. Three in four employers hire anti-union consultants, spending approximately $1 billion each year on these efforts. Corporations fire pro-union workers in one of every three union campaigns and about half of corporations threaten to retaliate against workers during union campaigns. Even workers who successfully are able to form a union are later impeded by corporations who bargain in bad faith. About half of newly organized groups of workers do not have a contract a year later and one in three remain without a contract two years after a successful union election.”

Biden’s plan “will ensure employers respect workers’ rights,” holding “corporations and executives personally accountable for interfering with organizing efforts and violating other labor laws.” Along these lines, “Biden strongly supports the Protecting the Right to Organize Act’s (PRO Act) provisions instituting financial penalties on companies that interfere with workers’ organizing efforts, including firing or otherwise retaliating against workers.”

At the same time, “Biden will go beyond the PRO Act by enacting legislation to impose even stiffer penalties on corporations and to hold company executives personally liable when they interfere with organizing efforts, including criminally liable when their interference is intentional.” 

Additionally, Biden “will direct the U.S. Department of Labor to engage in meaningful, collaborative enforcement partnerships, including with the National Labor Relations Board (NLRB), the Equal Employment Opportunity Commission, the Internal Revenue Service, the Justice Department, and state tax, unemployment insurance, and labor agencies. And, while Trump has weakened enforcement by sabotaging the enforcement agencies and slashing their investigator corps, Biden will fund a dramatic increase in the number of investigators in labor and employment enforcement agencies to facilitate a large anti-misclassification effort.”

There is more. The plan will stop federal dollars from flowing “to employers who engage in union-busting activities, participate in wage theft, or violate labor law,” and ensure federal contracts only go to employers who sign neutrality agreements committing not to run anti-union campaigns.” And companies that bargain in bad father will be penalized.

Biden’s proposal, “For Strengthening Worker Organizing, Collective Bargaining, and Unions,” is radical in its vision of bringing greater equality and justice to the workplaces of America. The potential political costs are great. If corporate America throws its support to the Republican Party, now under the sway of Trump, the challenge of getting Democrats elected and reelected in 2022 and 2024 will be greater than in 2020.

The Biden administration has already taken steps to reduce hunger.

Jason DeParle reports that, via an executive order in January, “the Biden administration is accelerating a vast campaign of hunger relief that will temporarily increase assistance by tens of billions of dollars and set the stage for what officials envision as lasting expansions of aid.” The need is great, with “more than one in 10 households reporting that they lack enough to eat” (https://www.nytimes.com/2021/04/04/us/politics/biden-hunger-programs.html).

Biden “has increased food stamps by more than $1 billion a month, provided needy children a dollar a day for snacks, expanded a produce allowance for pregnant women and children, and authorized the largest children’s summer feeding program in history.”

The campaign is driven, DeParle posits, “both by the spread of hardship to more working-class and white families and the growing recognition of poverty’s disproportionate toll on minorities. With hunger especially pronounced among Black and Latino households, vital to the Democrats’ coalition, the administration is framing its efforts not just as a response to pandemic needs but as part of a campaign for racial justice.”

And scenes of crowded food banks have provided additional incentives for action. De Parle refers to a “recent Census Bureau survey [which] found that, over the previous week alone, 8.4 percent of adults said their households ‘sometimes’ lacked enough to eat and 2.3 percent said they ‘often’ did. That translates into 23 million hungry adults, plus millions of children.”

Concluding thoughts

Joe Biden and his administration are advancing an agenda that will, if implemented, will provide enormous benefits to poor, working class, and lower middle-class Americans. It will also generate an enormous negative reaction from the corporate community, the rich, many in the top ten or so percent of the income distribution, the Republican Party, the right-wing media, and, of course, Trump, who will find ways to rile up his army of unquestioning followers against Democrats. Republicans in the U.S. Senate will use the filibuster when then can to stymie virtually any legislative initiative from the Democrats. Republican governors and legislators in many states are already instituting rules that are designed to further suppress the vote of their Democratic opponents, with the 2022 and 2024 elections in mind.

In pursuing a progressive agenda, Biden seems to be betting that he and the Democratic Party can hold onto most of the voters who turned out for them in the 2020 elections and increase the support they get from white working-class voters. This will depend on the organizing and educational efforts of liberal and progressive organizations, the ability to raise money for campaigns, the state of the economy, whether the pandemic has been brought under control, and whether the Democrats can find ways to pass some of Biden’s proposals in 2021 and 2022.

The stakes are enormous, for the poor, the working class, broad swaths of the middle class, for people of color, for women, for children, and for those who seek viable options in their gender identities. It comes down to whether justice and democracy will be strengthened or weakened. If the latter, anti-democratic and authoritarian forces in the society are likely to expand and become consolidated under the autocratic-aspiring Trump.

On the other hand, the threats to justice and democracy and the Biden/Democratic agenda may be sufficient enough to convince voters to cast their ballots for Democrats in upcoming elections.  

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