Obama's Poverty Politics Trick to Redistribute even more tax dollars

Ed Lasky
Barack Obama is manipulating poverty statistics to cover income redistribution on a massive scale. I covered this subterfuge in a previous American Thinker column, Obama's Poverty Politics. The Census Bureau has redefined "poverty" in a way that vastly increases the ranks of those characterized as living in "poverty" or "near poverty."  Robert Rector , in Team O's Poor Trick, wrote about the redefinition and its consequences (one that was barely noticed by the public):

Thus, it was foreordained that, using this new standard, the Census folks "discovered" that almost half the population is living in "near-poverty" conditions. That is, if you define "near poverty" as an income roughly equal to the median, that means that by definition nearly half the population will always be "poor" or "near poor" - regardless of any changes in actual living standards.

Obama's new poverty measure will produce very odd results. For example, if the real income of every single American were to magically double overnight, the new measure would show no drop in poverty or "near poverty," because the poverty- and near-poverty income thresholds would also double.

In other words, the president has introduced a statistical trick that gives new meaning to the saying that "the poor will always be with you."

The shift seems designed to promote Obama's obsession to "spread the wealth." By suggesting that many more Americans are poor or near-poor, the Census generates political pressure to raise taxes and expand the welfare state.

The poverty level is key to all sorts of federal and state benefits. Therefore, the more people that are considered poor under the new Obama definition, the more they will be able to draw upon tax dollars for benefits.

George Will reminds readers in his Washington Post column, A Supreme Obamacare Test, of one particular program that will  see a vast expansion under ObamaCare: Medicaid.

Spending on Medicaid, a theoretically cooperative federal-state program, is approximately 40 percent of all federal funds given to states and 7 percent of all federal spending. Enacted in 1965 as a program for the poor, it has exploded. The increase in its costs by the end of this decade is expected to be $434 billion. Its cost is projected to rise 7.9 percent a year - faster even than Medicare's (6.9 percent).

Under Obamacare, however, the cooperative nature of Medicaid has been radically revised in a way no state could have anticipated before becoming inextricably entangled with it. Obamacare requires states to cover all persons with incomes up to, effectively, 138 percent of the poverty level. The federal government will pay all increased costs (other than administrative costs) until 2016; by 2020 states will pay 10 percent of the expansion. But even with the federal government paying most of the costs, in many states their portion of Medicaid costs is the largest item in their budgets, even exceeding education. And Obamacare, which forbids states to restrict the eligibility criteria it adopted before this new burden, would deny all Medicaid funds to noncompliant states.

This would cost most states billions of dollars. For example, 26 percent of Florida's budget goes for Medicaid; if it lost federal funds, it would require 60 percent of all tax revenue to maintain today's pre-Obamacare benefits.

In theory, state participation in Medicaid is voluntary; practically, no state can leave Medicaid because its residents' federal taxes would continue to help fund the program in all other states. Moreover, opting out of Obamacare's expanded Medicaid would leave millions of poor people without affordable care. So Obamacare leaves states this agonizing choice: Allow expanded Medicaid to devastate your budgets, or abandon the poor.

In other words, the new definition of poverty will lead to a vast expansion of Medicaid benefits since a vastly enlarged population will now be entitled to receive the program's benefits. Eventually-in 2020-states will be responsible for these costs. This will devastate state budgets and lead to other programs (education, police, fire, etc)  being stripped of funds and higher taxes on taxpayers.

All in furtherance of Obama's dream to "spread the wealth", taxpayers be damned.

And they will be.

Barack Obama is manipulating poverty statistics to cover income redistribution on a massive scale. I covered this subterfuge in a previous American Thinker column, Obama's Poverty Politics. The Census Bureau has redefined "poverty" in a way that vastly increases the ranks of those characterized as living in "poverty" or "near poverty."  Robert Rector , in Team O's Poor Trick, wrote about the redefinition and its consequences (one that was barely noticed by the public):

Thus, it was foreordained that, using this new standard, the Census folks "discovered" that almost half the population is living in "near-poverty" conditions. That is, if you define "near poverty" as an income roughly equal to the median, that means that by definition nearly half the population will always be "poor" or "near poor" - regardless of any changes in actual living standards.

Obama's new poverty measure will produce very odd results. For example, if the real income of every single American were to magically double overnight, the new measure would show no drop in poverty or "near poverty," because the poverty- and near-poverty income thresholds would also double.

In other words, the president has introduced a statistical trick that gives new meaning to the saying that "the poor will always be with you."

The shift seems designed to promote Obama's obsession to "spread the wealth." By suggesting that many more Americans are poor or near-poor, the Census generates political pressure to raise taxes and expand the welfare state.

The poverty level is key to all sorts of federal and state benefits. Therefore, the more people that are considered poor under the new Obama definition, the more they will be able to draw upon tax dollars for benefits.

George Will reminds readers in his Washington Post column, A Supreme Obamacare Test, of one particular program that will  see a vast expansion under ObamaCare: Medicaid.

Spending on Medicaid, a theoretically cooperative federal-state program, is approximately 40 percent of all federal funds given to states and 7 percent of all federal spending. Enacted in 1965 as a program for the poor, it has exploded. The increase in its costs by the end of this decade is expected to be $434 billion. Its cost is projected to rise 7.9 percent a year - faster even than Medicare's (6.9 percent).

Under Obamacare, however, the cooperative nature of Medicaid has been radically revised in a way no state could have anticipated before becoming inextricably entangled with it. Obamacare requires states to cover all persons with incomes up to, effectively, 138 percent of the poverty level. The federal government will pay all increased costs (other than administrative costs) until 2016; by 2020 states will pay 10 percent of the expansion. But even with the federal government paying most of the costs, in many states their portion of Medicaid costs is the largest item in their budgets, even exceeding education. And Obamacare, which forbids states to restrict the eligibility criteria it adopted before this new burden, would deny all Medicaid funds to noncompliant states.

This would cost most states billions of dollars. For example, 26 percent of Florida's budget goes for Medicaid; if it lost federal funds, it would require 60 percent of all tax revenue to maintain today's pre-Obamacare benefits.

In theory, state participation in Medicaid is voluntary; practically, no state can leave Medicaid because its residents' federal taxes would continue to help fund the program in all other states. Moreover, opting out of Obamacare's expanded Medicaid would leave millions of poor people without affordable care. So Obamacare leaves states this agonizing choice: Allow expanded Medicaid to devastate your budgets, or abandon the poor.

In other words, the new definition of poverty will lead to a vast expansion of Medicaid benefits since a vastly enlarged population will now be entitled to receive the program's benefits. Eventually-in 2020-states will be responsible for these costs. This will devastate state budgets and lead to other programs (education, police, fire, etc)  being stripped of funds and higher taxes on taxpayers.

All in furtherance of Obama's dream to "spread the wealth", taxpayers be damned.

And they will be.