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Recession takes a toll as US poverty surges

Nearly 40 million Americans were living in poverty last year. The Census Bureau reports a significant rise among children.

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Job seekers wait in line for a job fair in midtown in New York on September 1.

Frances M. Roberts / Newscom

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America's poverty rate surged upward last year, underscoring the toll of recession on ordinary households across the nation.

Some 13.2 percent of Americans were living below the poverty line in 2008, the Census Bureau said Thursday. That's a significant jump from the 12.5 percent poverty rate a year earlier. The rise means that nearly 40 million Americans are living in poverty, defined by incomes of less than $10,991 for an individual or $22,025 for a family of four.

The Census conducts its annual survey on incomes and poverty in the spring of each year, so the 2008 survey captures only the recession's early phase – leaving out the deeper impact as unemployment skyrocketed late last year. This suggests the poverty rate will be even higher in next year's report, but the agency also notes some progress when the data are viewed in a longer-term context.

"The poverty rate in 2008 (13.2 percent) was ... 9.2 percentage points lower than in 1959, the first year for which poverty estimates are available," the authors write.

The report comes as the weak economy, coupled with debate over healthcare policy, has focused attention on the question of government's role in the economy. Many policy analysts say, for example, that the introduction of the Medicare program for seniors is a key reason for the long-term decline in poverty rates for seniors.

For all age groups, although poverty rates are lower than in 1959, little progress is visible in the data since the mid-1970s. Poverty goes up in recessions and declines during better times.

In his televised speech to Congress Wednesday, President Obama sought to strike a balance on policy. He pitched his healthcare reform plans on the notion that America's character includes individual choice and limits on the size of government (and federal deficits). But he added that "our predecessors understood that ... the danger of too much government is matched by the perils of too little."

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