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15 Oct, 2008 13:50

U.S. election: how will the poor vote?

U.S. election: how will the poor vote?

Prosperity is more than just a dollar value. The vast majority of people live “average” lives, which are, practically by definition, “simple” lives. Nonetheless, figures can be illuminating. For instance, slightly more than a third

Rendering unto Caesar

Taxation is always a big issue. We have to have it, but we all hate it. Taxes in the U.S. are now at their lowest point since before World War Two but both candidates are proposing tax cuts (try to become U.S.president without it!). Their plans have little in common. Obama is offering a tax rebate to every worker who makes less than $150,000 per year. That is more that 94 per cent of the country. He is also offering a tax credit on college tuition in exchange for public service. Low-income families would receive a tax credit for childcare costs, and senior citizens making less than $50,000 per year (also the majority) would be exempt from income taxes. To make up for the last tax cut, he would impose a two per cent tax on the Social Security (government pensions) of the wealthy elderly. Obama also wants to raise the minimum wage to $9.50 per hour by 2011 and index it to inflation.

McCain has promised most of his tax cuts to the wealthy. He would lower taxes in the two top brackets, so that the wealthiest Americans paid 36 per cent of their income in taxes rather than 40 per cent. He would leave the lower brackets alone, however. The only benefits that might affect the lower income groups are a change to allow dependents to earn more income and a deduction for medical insurance expenses. Thus Junior could make more money on his after-school job and still remain Daddy’s little tax write-off.

Bitter pills

Reform of the expensive and inefficient American healthcare system is another hot campaign topic. Both candidates agree that cost is the major impediment to quality healthcare in the U.S. There are 47 million Americans without health insurance. Both candidates favor subsidies for healthcare to those on low incomes. McCain favors tax cuts to encourage the public to obtain private health insurance, without making it mandatory. Obama wants to implement the long-held dream of the Democratic Party (including Hillary Clinton) and create a universal healthcare programme. He is in favor of mandating health insurance for children and requiring employers either to provide health insurance or to pay into a federal fund that would provide that insurance. In other words, he basically wants to expand the existing American health “safety net.” That is a modest enough proposal.

The tone of the healthcare discussion is rather subdued. Bill Clinton laid much more emphasis on the issue in his first presidential campaign, but he lived to regret it. Obama seems to have learned from Bill’s example. Hillary Clinton, on the other hand, had a much more comprehensive and effective plan when she was campaigning. The healthcare and insurance industries in the U.S. are powerful and ruthless, and so far have resisted efforts to impose outside controls over them. McCain’s position is dogmatically Republican (unshackled business, free market…) and safe in the current Establishment. It does not promise anything good for low-income voters, because people with little money will always have something better to spend it on than insurance, even with a tax break promised at the end of the fiscal year. Human nature is like that. And American insurance companies have finely-honed methods for rejecting the applicants who need them most.

Both candidates want to provide assistance to homeowners facing foreclosure on their houses in the form of mortgage refinancing at a fixed rate. This is a reaction to the subprime mortgage crisis. Besides the damage the crisis has done to financial institutions, it has resulted in a tremendous number of people being forced from their mortgaged homes because the mortgage was impractical to begin with or because the interest rate was raised unreasonably.

The lowdown

Neither candidate is promising revolutionary change for America’s poorest. In terms of immediate effect, Obama clearly offers those on low-income more, as is traditional for Democrats. It is a Democratic value. But it may be worth asking whether reducing taxes is the key to increasing general prosperity. Besides Republican “Reaganomics” arguments that wellbeing at the top of the income scale leads to everyone being better off, there is a monumental budget deficit to contend with and no lack of more pressing problems that require expensive solutions.

It is obvious that Obama’s lead, even as it grows, is not very directly attributable to the lower-income voters who would benefit from his programmes. There are a few reasons for this. Race, personality and party have played a role. There was a severe backlash against the Democratic Party among the truly disenfranchised after Democrat Lyndon B. Johnson’s war on poverty, more than a generation ago. There will always be a lower class. That also is human nature.

And that implies that the Democratic Party has failed some of the people. Worse yet, it has adopted positions that are profoundly at odds with the “values” of many of the least well-off – environmentalism, immigrant/gay/handicapped rights and other Democratic causes do not find ready sympathy with them.

Nonetheless, it can be suggested that the less prosperous in the U.S. are fairly satisfied with their lot. There are no revolutionary social changes in the offing because there is no revolution brewing. The social problems that exist are entrenched to the point that they cannot be removed by declaration. That is the lesson of Bill Clinton’s healthcare reform failure. Rather, subtle planning and long-term goal setting is called for. The financial wellbeing of a third of the population is not a burning issue in this campaign. Conditions in the country are unstable, however. Their time may come sooner than the candidates think.

Derek Andersen, RT