CEPR

April 30, 2018

Washington - The rate that income inequality has risen over the past 35 years has been understated by the Congressional Budget Office (CBO), according to a new analysis by the Center for Economic and Policy Research (CEPR).

The CBO’s latest release of family income data overstates the extent to which government policy reduces income inequality. CEPR economists Dean Baker and David Rosnick illustrate that much of the increased Medicare and Medicaid spending goes to doctors providing health care and to drug companies for medication. Thus, the gain to those who receive the benefit is exaggerated.