The U.S. poverty rate fell for the first time this decade but more people are living without health insurance and the bulk of the nation's poor are children, government data released on Tuesday showed.

The national poverty rate in 2006 was down to 12.3 percent from 12.6 percent a year earlier, the Census Bureau's report on Income, Poverty and Health Insurance Coverage in the United States said. Children represent 35 percent of those living in poverty and make up a fourth of the total U.S. population.

The national median income, now $48,200, rose for the second straight year as the United States entered an economic slowdown but it was mainly because more Americans within each household have jobs.

Some 36.5 million Americans, or 12.3 percent of the population, lived below the poverty line, defined as having an annual income of about $10,000 for an individual or $20,000 for a family of four.

The latest data come at a key time as the economy has slowed and with just more than a year left in the presidential campaign.

"These statistics show what most Americans know: tens of millions of our fellow citizens are completely left out of the economic progress enjoyed by the individuals and corporations on the very top," said Democrat presidential candidate John Edwards.

Even with two years of increases, household income levels still are down from a 1999 peak and the poverty rate remains one percentage point above the 2000 level.

Individuals actually are earning less with earnings per worker falling for the third year in a row.

"It's welcome news that poverty is down and household income is up but there is too much evidence in this report that the growing economy is not reaching middle- and low-income households the way it ought to be at this stage," said Jared Bernstein, an economist at the Economic Policy Institute in Washington.

The data showed fewer people living in the United States in 2006 were covered by health insurance than in 2005, mainly because businesses cut back on such benefits. The number of uninsured increased to 47 million from 44.8 million.

"One of the most dismal pieces in this is that we are supposed to be in a good economy," said Sister Carol Keehan, who heads up the Catholic Health Association, a non-profit association of the Nation's Catholic hospitals. "When you watch the number of employed rise it does tell me we need to make some significant changes in how health care is provided."

Democratic presidential candidate Sen. Hillary Clinton said the figures point out a societal problem.

"When I began the fight for universal coverage almost 15 years ago, there were 37 million people uninsured," she said in a statement. "It was an outrage then and with 10 million more people uninsured today, it is an even deeper outrage today."

According to the Census report, the percentage of people covered by employment-based health insurance fell to 59.7 percent, from 60.2 percent in 2005.

"When millions of hard-working men and women do not have health insurance themselves and cannot cover their children, it raises serious clinical, economic and moral concerns about how we as a nation will meet the needs of our people," said Risa Lavizzo-Mourey, president and chief executive officer of the Robert Wood Johnson Foundation, a Princeton, New Jersey-based think tank focusing on health-care issues.

These Census data are collected from 50 states and the District of Columbia based on a sample of about 100,000 addresses and do not take into account whether or not those surveyed are U.S. citizens or not.

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By Joanne Morrison

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