News Release

August 26, 2004

Media Contact: (202) 789-5200

Cato scholars comment on Census Bureau's poverty, health care report

WASHINGTON--The U.S. Census Bureau today released a report detailing trends in income, the poverty rate and the number of Americans without health care insurance. Cato scholars Michael Cannon, director of health policy studies, Senior Fellow Alan Reynolds, and Director of Health and Welfare Studies Michael Tanner, made the following comments:

Cannon: "The number of Americans who cannot afford health insurance is large and growing for one reason: government regulation. If big government ties health insurance to the workplace, job losses become coverage losses. As an upcoming Cato study will show, over seven million Americans--and as many as 17 million--cannot afford health insurance due to the cost of regulation alone. Expanding access and controlling costs requires heavy doses of health savings accounts and deregulation."

Reynolds: "The poverty rate rose a bit from 2002 to 2003, but still remained lower than the 13.9 percent average from 1980 to 1998 and also lower than in any single year during that period. In 1998, for example, the poverty rate was 12.8 percent. Nothing but political bias can explain why last year's below-average poverty rate could now be reported as if it was unusually bad. With private wages and benefits up 4 percent between the second quarters of 2003 and 2004, and the unemployment rate down from 6.3 to 5.5 percent, poverty figures for 2004 will undoubtedly be much improved."

Tanner: "The small increase in poverty comes despite a 4 percent increase in Temporary Assistance for Needy Families spending, as well as increases in food stamps, Medicaid, and other government welfare programs. This should be a clear lesson that we cannot spend our way out of poverty. More welfare programs are not the answer. Rather, we should be striving to create the conditions necessary for greater economic prosperity. That means reforming education, reducing out of wedlock births, encouraging savings, and reducing the taxes and regulation that stands in the way of job growth."

Michael Cannon, Alan Reynolds and Michael Tanner are available for media interviews.