Terry Jeffrey

President Obama met this week with the chairmen of the congressional budget committees and called for a bipartisan effort to "pass a budget that puts this nation on the road to lasting prosperity." But the fiscal 2010 budget he presented is a startling call to political class war.

It depicts America as populated by an aggrieved middle class exploited by an upper class luxuriating in ill-gotten gains.

"While middle-class families have been playing by the rules, living up to their responsibilities as neighbors and citizens, those at the commanding heights of our economy have not," says Obama's budget document. "There's nothing wrong with making money, but there is something wrong when we allow the playing field to be tilted so far in the favor of so few."

To fix this alleged problem, Obama's budget points -- like his famous sidewalk colloquy with "Joe the Plumber" -- to using the tax code to spread the wealth around.

"For the better part of three decades, a disproportionate share of the nation's wealth has been accumulated by the very wealthy," says the budget. "Yet, instead of using the tax code to lessen these increasing wage disparities, changes in the tax code over the past eight years exacerbated them."

As evidence of this, the Obama budget cites stagnation in real median household income.

"On top of that, this was the first economic recovery since World War II where real median household income did not rise above its previous peak," says the budget.

But is this an intellectually honest representation of the recent history of income growth and distribution in the United States? Have we seen wealth progressively concentrating in the hands of a few "for the better part of three decades?"

By carefully presenting a part of the truth, Obama's budget artfully obscures the whole truth.

The budget cites the Census Bureau as its source for "real median household income." So I looked to the Census Bureau for a fuller picture of trends in household income.

In August 2008, the Census Bureau published a report titled, "Income, Poverty and Health Insurance Coverage in the United States: 2007." I called the bureau and was assured this was its latest report on real median household income and that Table A-1 in the report contains the definitive historical numbers of median household income as well as the percentage of the population that fell into each of nine annual-income brackets ranging from "Under $5,000" to "$100,000 and over."

All the figures in this Census Bureau table are in inflation-adjusted 2007 dollars.


Terry Jeffrey

Terence P. Jeffrey is the editor-in-chief of CNSNews

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