UPDATE 4-Report: Number of US poor hit record 46 mln in 2010

Tue Sep 13, 2011 9:15pm EDT

* Number of U.S. poor in 2010 largest on record

* Poverty rate rose for third year to 15.1 percent

* Median income declined 2.3 percent (Adds background)

By David Morgan

WASHINGTON, Sept 13 (Reuters) - A record 46 million Americans were living in poverty in 2010, pushing the U.S. poverty rate to its highest level since 1993, according to a government report on Tuesday on the grim effects of stubbornly high unemployment.

Underscoring the economic challenges that face President Barack Obama and Congress, the U.S. Census Bureau said the poverty rate rose for a third consecutive year to hit 15.1 percent in 2010. The number in poverty was the largest since the government first began publishing estimates in 1959.

The report surfaces at a time when the economic straits of ordinary Americans are at the forefront of the 2012 election campaign.

Obama is suffering from low job approval ratings on the economy and evidence of rising poverty could give popular momentum to the $450 billion job-creation program he unveiled last week.

The Census data also could come into play in the deliberations of a bipartisan super committee in Congress, which has been charged with finding at least $1.2 trillion in budget savings over 10 years by Nov. 23.

The United States has the highest poverty rate among developed countries, according to the Paris-based Organization for Economic Cooperation and Development.

The poverty line for an American family of four with two children is an income $22,113 a year.

The data showed that children under 18 suffered the highest poverty rate, 22 percent, compared with adults and the elderly.

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U.S. poverty rate r.reuters.com/byg73s

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In a sign of decline for middle-income Americans, the figures showed continued decline in the number of Americans with employer-provided health insurance, while the ranks of the uninsured hovered just below the 50 million mark.

Underlying the Census data was a rate of economic growth too meager to compensate for the loss of hundreds of thousands of jobs from 2009 to 2010, as the recession officially ended but the jobless rate shot up from 9.3 percent to 9.6 percent.

"All of this deterioration in the labor market caused incomes to drop, poverty to rise and people to lose their health insurance," said Heidi Shierholz of the Economic Policy Institute think tank. "One of the immediately obvious issues this brings up is that there is no relief in sight."

SOUTH FARES WORST

The numbers would have been worse, analysts said, but for government assistance programs including extended unemployment compensation, stimulus spending and Obama's health reforms, which appeared to reduce the number of uninsured young adults.

In Obama's hometown of Chicago, Salvation Army Major David Harvey knows well the effects of grinding poverty on the city's South Side, where he attended a food giveaway on Tuesday.

"There are more families falling into poverty," he said. "That's multiplied on the South Side of Chicago where there are pockets with 20 percent, or more, unemployment."

You've got people crying for jobs. They move out of state to get jobs because employers are leaving because of the tax increases here," Harvey said.

The poverty rate increased for non-Hispanic whites, blacks and Hispanics but did not differ significantly for Asians. Blacks and Hispanics together accounted for 54 percent of the poor with whites at 9.9 percent and Asians at 12.1 percent.

The South fared worst among U.S. regions, recording the highest poverty rate, a significant drop in median income and the largest number of residents without health insurance.

The administration was quick to seize on data showing a 2.1 percent drop in uninsured young adults, aged 18 to 24, as evidence that families were benefiting from an Obama healthcare reform that allows parents to extend their coverage to children as old as 25.

The Affordable Care Act is the centerpiece of Obama's domestic policy agenda but has come under fierce attack from Republicans including presidential candidates who hope to challenge the president in the 2012 general election.

"We expect even more will gain coverage in 2011 when the policy is fully phased in," Health and Human Services Secretary Kathleen Sebelius said in a blog posting. (Additional reporting by Andrew Stern in Chicago; Editing by Ross Colvin, Doina Chiacu and Bill Trott)

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