Rising Tide

The White House could not have been more delighted. A generally vigorous economy, low inflation and a decrease in unemployment helped lift 1.8 million Americans out of poverty last year--or at least out of the category that the Census Bureau defines as poverty, which is annual cash income of less than $10,609 for a family of four. The bureau reported last week that the proportion of needy Americans decreased by nearly a full percentage point, to 14.4%, the first reduction after five years of steady increases. Said Gordon W. Green Jr., assistant chief of the Census Bureau's population division: "The reduction in poverty last year occurred basically for all demographic $ groups." In a statement from California, Ronald Reagan said, "I believe these numbers are further proof that the greatest enemy of poverty is the free enterprise system." The President, as ever, was optimistic: "The success of 1984 does not mean the battle against poverty is over; it does mean that America, after a difficult decade, is once again headed in the right direction." The Administration sees the drop as a vindication of Reagan's economic policies and a sign that a rising economic tide has actually lifted all boats, even the ones in danger of sinking.

Democrats, who have maintained that Reagan's budget cuts have increased poverty, did not see the bureau's report as an endorsement of Reaganomics. In a joint statement, Democratic Congressmen Charles B. Rangel of New York and Robert T. Matsui of California noted that the 1984 poverty rate was higher than for any year from 1970 to 1980, that the rate for black children under six increased and that the gap between rich and poor was not getting narrower.

According to the report, real median family income rose by 3.3%, the greatest increase since 1972. Poverty rates for blacks, women and the elderly also declined. Despite the gains, some economists suggested that the benefits of the economic recovery were not evenly shared. Claimed Robert Greenstein, director of the Center on Budget and Policy Priorities, which has been highly critical of the President's policies: "The new Census data show that the gap between rich and poor in the U.S. is now wider than at any time since Census began collecting income-distribution data in 1947." Nor was Greenstein sanguine about the future. "It's a one-year drop," he said. "Unless we get an unusually robust economic growth, the poverty rate in 1985 is not going to show a significant decline." The Census Bureau warned against both economic Cassandras and Pollyannas, forecasting that the poverty rate would continue to drop, but at a slower rate.