Bush: Pay gap is real, rising

NEW YORK – President Bush acknowledged Wednesday there is growing income inequality in the United States, addressing the subject for the first time.

“The fact is that income inequality is real – it’s been rising for more than 25 years,” Bush said in an address on Wall Street.

In some respects, Bush’s remarks were a statement of what many economists accept as common wisdom. But they represented the first time Bush has personally addressed an issue on which his administration has found itself under fierce attack from Democrats. The official White House Web site offers no record of Bush uttering the phrase “income inequality” in a speech or remarks, and aides said they could not recollect such an instance.

The comments appeared to be another presidential nod to the evolving political landscape on Capitol Hill, now controlled by Democrats after a campaign that focused in part on their complaints of corporate greed and growing middle class insecurity.

Democrats said Bush’s speech is a reaction to the success of their agenda and to growing anger among voters who feel they are being left behind.

“They recognize the unhappiness voters have with inequity in this country,” said Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.

Bush aides did not deny that Bush was seeking to address Democratic concerns, but they said the issue has been on the minds of senior administration officials.

“It’s something that obviously the administration has made note of,” said Dan Bartlett, counselor to the president.

“The president “understands that there are many Democrats who have spoken to this issue. It is an important time for the Congress and the American people to hear what he says.”

Few economists would disagree that income inequality is real and getting worse. The gap between rich and poor has been growing wider since the 1970s. According to the nonpartisan Congressional Budget office, the wealthiest 20 percent of households accounted for 45.4 percent of total U.S. income in 1979, but claimed 53.5 percent in 2004. Households in the bottom fifth dropped from 5.8 percent to 4.1 percent over the same period.

Democrats have blamed Bush’s tax policies for contributing to that trend. Wealthy households reaped the most benefits from tax cuts enacted between 2001 and 2006, according to an analysis by the Tax Policy Center, a project of the Urban Institute and the Brookings Institution.

Last year, families making more than $1 million a year saw their after-tax income increase by 6 percent because of the tax cuts, while families making $40,000 to $75,000 saw after-tax income rise by about 2.5 percent.