Associated Press Writer

WASHINGTON - Democrats took aim at President Bush's economic record after release of a Census Bureau report showing the ranks of the uninsured and the impoverished grew in 2003 for the third consecutive year while incomes stayed level.

The president's surrogates came to his defense, noting that the numbers failed to reflect more recent economic gains, such as the addition of 1.5 million jobs over the past 12 months, or the full effect of the Bush-backed tax cuts.

But with jobs and health care key issues in a tight presidential race, Democratic challenger John Kerry said the data was evidence that the incumbent's economic policies had failed poor and middle-class Americans.

The reports released Thursday provide a snapshot of Americans' economic well-being in 2003, two full years after the end of the recession. In 2003, job growth was slow until the second half of the year while wages overall were stagnant. Many of those who did get jobs were faced with accepting scaled-back benefits and pension plans.

"The good news is that this is what one would expect since we are still coming out of a recession," said Sheldon Danzinger, co-director of the National Poverty Center at the University of Michigan.

Still, the growing number of workers who didn't get wage increases last year likely helped boost the number of poor people in America, he added.

There were 35.8 million people living in poverty last year, or 12.5 percent of the population. That was 1.3 million more than in 2002.

Children made up more than half the increase - about 800,000. The child poverty rate rose from 16.7 percent in 2002 to 17.6 percent.

The government definition of poverty varies by the size of the household.

For instance, the income threshold for a family of four was $18,810, while for two people it was $12,015.

More people lacked health insurance as well - about 45 million last year, or 15.6 percent, compared with 43.5 million, or 15.2 percent the previous year.

The rate of uninsured children was relatively stable at 11.4 percent, probably the result of recent expansions of coverage in government programs covering the poor and children, such as the state Children's Health Insurance Program, analysts said.

The census report found that median household income, when adjusted for inflation, remained basically flat last year at $43,318. Whites, blacks and Asians saw no noticeable change, but Hispanics' income fell slightly.

Plus, earnings for women age 15 and older working full-time and year-round slipped last year, the first annual decline since 1995, though earnings for comparable men remain unchanged.

Bush, campaigning in Las Cruces, N.M., didn't directly address the Census Bureau reports but reiterated his contention that the economy is improving because of his policies.

"We have more to do to make this economy stronger," Bush said. "We've overcome these obstacles because the entrepreneurial spirit is strong and the small business sector of our economy is vibrant. I also think we've overcome it because of well-timed tax cuts."

In a statement, Kerry noted that during the years Bush has been in office, 5.2 million people have lost health insurance and 4.3 million have fallen into poverty.

"Under George Bush's watch, America's families are falling further behind," Kerry said.

Republicans noted that the number of people with health insurance also increased - up 1 million to 243 million. And in a conference call, Health and Human Services Secretary Tommy Thompson placed some of the blame on Congress for failing to adopt Bush's health care plan. "The big failure is not what is happening in the administration," Thompson said.

Sen. Edward Kennedy, D-Mass., countered that Bush supported rollbacks on overtime pay and refused to raise the minimum wage that would have helped middle-class Americans "while lavishing billions of dollars in tax breaks on the wealthiest Americans."

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Census Bureau: http://www.census.gov/