Over the next six weeks, Washington, D.C.—and especially the U.S. Congress—is going to be completely obsessed with the federal budget. But over the past week, there have been a handful of important releases of new economic data that show just how off-track that discussion really is. The new data underline the struggles of the middle class and the continuing drag of poverty and inequality. They also reveal that government debt, while once on a legitimately concerning trajectory, is now on a much more manageable path. Taken together, the numbers should make policymakers turn away from yet another damaging and acrimonious debate over deficits and toward a conversation on the pressing problems facing the country right now.

The Census Bureau released its annual report on income, poverty, and health insurance coverage yesterday, and the findings are alarming. Fully 15 percent of Americans, or 46.5 million people, currently live in poverty—an elevated level that has remained essentially unchanged since 2010 even though our economy is supposed to be in recovery. A broader measure of hardship that more accurately captures the difficulty American workers are facing—the share of Americans with incomes below twice the poverty line—now stands at 34.2 percent. This number has not fallen in two years and represents a 12.1 percent increase over pre-recession levels.

But low-income families aren’t the only ones getting left behind in this economy. The middle class has actually seen its income drop since the end of the recession, even as those at the top have more than fully recovered. The Census data indicate that the top 5 percent of Americans have increased their real incomes by 5 percent over the course of the recovery, while the middle 60 percent have lost 1.2 percent of their income.

Consider what has happened to median family income. For a household right in the middle of the income distribution, the events of the past five years have not only stripped away all of the gains made after the 2001–2003 recession, but they have also undone all of the income gains of the 1990s boom. After adjusting for inflation, the typical middle-class American family is now earning less than they were earning in 1989. In other words, the middle class has lost nearly a quarter century of economic progress. Click here to read more.