These are my thoughts, at least, reading a new piece from Eugene Steuerle, a tax economist at the Urban Institute with a knack for collecting data that can help us see the world in fresh ways.  From the data Steuerle presents, we can calculate that within just five or six years, the average middle-class family will have to devote nearly one-third of its income to health care costs.  That’s right: one-third.  According to the CBO, the average family will earn $54,000 a year in 2016, when a moderate-priced family policy will cost $14,700.  Employers will pay much of that insurance bill for most middle-class families; but that’s just a mask, since those employer payments come out of people’s wages, not a company’s profits.   In real effect, a middle class family’s earnings in 2016 will come to $68,700 ($54,000 + $14,700), of which $14,700 or 21.4 percent will go for health insurance.  And that won’t be their only health-related costs.  Their co-payments and other uninsured expenses, on average, will come to another $5,100.  They’ll also be paying taxes to help cover other people’s health care – 2.9 percent of their cash wages for Medicare ($1,566), plus perhaps $750 more in federal and state income taxes for Medicaid and for Medicare costs not covered by the 2.9 percent payroll tax.  Add up all of that, and it comes to $22,116, or 32.2 percent of the middle-class family’s adjusted income of $68,700.

While Steuerle is concerned – rightly so – about provisions in health care reform that will treat people with the same incomes differently, depending on the rules the legislation applies to employers, I’m more incensed about the current, raw deal for middle-class Americans.  Why should an average family expect to pay one-third of its income in 2016 on a health care system which, in that same year, should claim only 16 percent of our GDP?   The biggest part of this puzzle lies in the fact that most of the costs are roughly the same for most people, regardless of their income.  The worker earning $68,700, a manager who makes $100,000, and the company’s CEO who earns $1 million all will pay the same $14,700 for their families’ health coverage. Their out-of-pocket expenses do rise with income but not by very much; and while the manager and CEO pay more Medicare taxes than our average worker, they all pay at the same 2.9 percent rate.  There also are other factors which reduce the burden on other groups – and so tacitly increase it for those middle-class families.  For example, people on Medicare and Medicaid bear much lower insurance costs, although they also pay relatively more for their out-of-pocket expenses; and families without children pay relatively less for both insurance and out-of-pocket expenses.

Whatever the causes, the data show clearly that health care costs have become a core economic issue for middle-class Americans.  Unless we can contain them, and over time even reduce them, realistic prospects of upward mobility for most middle-class families will simply slip away.   Health care, in short, has to be an essential part of a new economic strategy.

The last political upheaval over the economic prospects of the middle class began with Proposition 13 in California and went on to fuel a conservative realignment that held sway for a quarter century.   The next one may well have begun already with these unsustainable health care costs.  President Obama, whose talent for reading the American mood equals Ronald Reagan’s, has tried to respond quickly with several reasonable ideas for cost containment.  His proposals went nowhere when healthcare providers and insurers countered by, in effect, threatening to withhold people’s care.  The next time, this issue will be recast in terms that everyone understands – people’s real incomes – and the results could be very different.

Factually, what is included in the Senate health care bill in regards to immigrants is that a verification for eligibility for the exchange and other benefits would essentially be the same as those in existing law, i.e., proof of legal status, not citizenship (although even legal immigrants do have restrictions for certain programs, like Medicaid).  There has been much confusion on this by the employment of the term “citizenship” verification. As you all probably know there is an ocean of LEGAL status possibilities that lie between “illegals” and “U.S. citizens.”  Sadly, these differences are not always understood, as we saw this week by the absence of an acknowledgement of legal immigrants during a White House press briefing, and even on news shows like that of Dylan Ratigan, who qualified those eligible as “American citizens,” when in fact, “legal immigrants” who are not yet citizens are also eligible.

But these are all semantics.  The bottom line about what has happened this week is that regardless of whether we want to be defined by race or by the issue of immigration on policy issues, we will be.  Those who seek to divide the country and foster hate against a certain sociological other will not go away, so they must be preempted and defeated.  As Sen. Menendez also stated at CHCI this week, “make no mistake about it, when they talk about ‘those people’, they are talking about you, about us.” And until we recognize this, we will have no progress.  For example, in the case of health care, from strictly a policy standpoint (not humanitarian or liberal, etc.) what if we DID cover the “illegals”?  What if we suddently acknowledged that “those people” are actually part of all of us? That their kids go to school with our kids and get sick the same as our children?  That they live next door? That they work in our offices?  Please read this analysis in Newsweek of what could actually be achieved if we made a conscious decision on the basis of a strategic, policy-oriented argument and covered “those people.”

The tone taken by the debate this week is – to say the least – disappointing considering that the election of President Obama was supposed to be a sign of progress in America’s attitudes towards race. But, we saw this coming. We saw it in the old woman who expressed how “afraid” she was because Obama looked likely to become president.  And in the man who said he feared for his unborn children if Obama became president. We had a preview of this with the people who linked Obama to terrorism and terrorists, and in the suggestion that he was a foreigner and that he wasn’t one of “us.” All this did not suddenly disappear on November 4th last year, nor will it in a near future.  No doubt, there are some who genuinely disagree with some government policies, the problem is that in light of the tone taken by the debate right now, it is hard to know who is who. Those who genuinely do disagree with the president should discuss their opinions based on policy, not on codes that appear to carry racist implications. But there is certainly something ugly going on. And that needs to be discussed – and most importantly, confronted.  And the first major stand we can take on this front is to pass comprehensive immigration reform and take much of the air our of this balloon of hate.

I close by highlighting that these negative attitudes do not discriminate on the basis of party – hate and fear mongerers are both Democrat and Republican.  On that note, I congratulate Sen. Judd Gregg who called this debate of immigration in the context of health care what it is – a “sideshow.”  And acknowledged that doctors will treat whoever walks into an emergency room, regardless of legal status (which, by the way, taxpayers are paying for – and thanks to not including “illegals” in reform, will continue to pay for).

Visit msnbc.com for Breaking News, World News, and News about the Economy

“That the debate over SCHIP has immediately become a debate about immigration should be a clear warning to the Administration and Congress that progress on many important domestic priorities this year may get caught up in the debate on how to best fix our broken immigration system. It is our belief that rather than having a series of tough and contentious proxy fights on immigration, our leaders should recognize that passing comprehensive immigration reform this year will not only help fix our badly broken immigration system – a priority of many Americans – but may also be the key to unlocking bipartisan progress on a whole range of other domestic and security related issues.” 

There are many good reasons to fix our broken immigration system by passing comprehensive immigration reform this year: it is a well-crafted fix to a serious national problem; it has the overwhelming support of the American people and a deep and broad bi-partisan coalition behind it; it will demonstrate that Congress and the President have the ability to tackle the hard ones; it will help weaken the vast and increasingly dangerous culture of illegality in the border region, which will help our law enforcement officials address more pressing problems; it was able to muster 62 votes and pass a Republican Senate, demonstrating that this is not a toxic or “third rail” issue; it will help us better manage the all too porous border in a time of possible terrorist attacks; it will ensure that five percent of our workforce has the protection of American law, is paid minimum wage and has the right to unionize, something these workers do not have today; it will help quiet the very public demonstration of hatred and racism that has spilled out during this debate; and for the Democrats it will deliver on a promise made to the fastest growing part of the electorate, one that was critical to their victory. 

But as our country’s leaders are also finding out with SCHIP, passing comprehensive immigration reform will also be a key that unlocks progress on other critical domestic priorities.  I hear talk in Washington that perhaps this issue will fall to 2011, or 2012.  To me this makes no sense.  Immigration Reform should be tackled this year.  Our broken immigration system is a vexing national problem that the American people want solved.  It is contributing to an increasingly dangerous border region, clogging our courts, tossing a federal problem back down to the states, and causing terrible harm to millions of families across the country.  Not solving it – when manifestations of it dominate the local news every day – makes our leaders look weak, fearful, political.  It will also slow down progress on lots of other issues, from housing and foreclosure reform, universal health care to putting laptops in the backpack of every child. These and other areas that will be subject to questions about whether the benefits confered may somehow be used by an undocumented immigrant or their children. 

Thus, the new Congress and the new Administration should be smart, pass comprehensive immigration reform this year.   The legislative process should start with a version of the original Kennedy-McCain bill from 2006, and its formula that called for cracking down on the border and on exploitive employers, better management of the future flow of both high and low skilled immigrants, and legalizing the status and offering a path to citizenship for those already here.  By doing so our leaders will not only be doing the right thing, they will free up the nation from the debilitating proxy fights over immigration that will continue to plague so many legislative battles in the years ahead.