WASHINGTON (Reuters) - The U.S. poverty rate rose to 14.3 percent in 2009 from 13.2 percent the year before, bringing the percentage of the population living in poverty to the highest level since 1994, as the economic downturn took its toll on jobs, the government said on Thursday.

The Census Bureau said 43.6 million people, or one in seven Americans, lived in poverty last year, up from 39.8 million in 2008. The data paints a picture of rising hardship and declining incomes for many living in the United States and hands more bad economic news to Democrats ahead of November 2 congressional elections.

“Our economy plunged into recession almost three years ago on the heels of a financial meltdown and a rapid decline in housing prices,” President Barack Obama said in a statement.

“Last year we saw the depths of the recession, including historic losses in employment not witnessed since the Great Depression,” Obama said. His economic recovery package enacted last year, he said, had helped keep millions from falling into poverty in 2009.

The poverty threshold for a family of four in 2009 was $21,954, the report said. The Census report relies on cash income and government payments, including unemployment insurance, to measure poverty.

But the data omits other government assistance, such as food stamps and low-income tax credits, that were increased in last year’s economic package.

Republicans pounced on the report, saying it showed that the government aid enacted by Obama and his congressional Democrats was not working.

“What poor Americans, like all other Americans, need are jobs, not more government benefits,” said Republican Representative John Linder.

The worst recession in decades began in December 2007 while Republican George W. Bush was president and the recovery has been slow to take hold.

A homeless man holds his plate of food at the Urban Ministry soup kitchen in Charlotte, North Carolina November 15, 2009. REUTERS/Carlos Barria

DECLINING HEALTH COVERAGE

While poverty levels rose, the number of people without health insurance jumped to 50.7 million in 2009 from 46.3 million a year earlier, leaving 16.7 percent of the population without health coverage, the Census Bureau said in its annual report on income, poverty and health coverage.

The data show that the impact of the economic downturn hit people at lower income levels the hardest, and many more would have fallen into poverty but for the additional unemployment payments approved by Congress, Census spokesman Stanley Rolark told reporters.

The annual measure of how well Americans are living is important because lawmakers and analysts use it to assess the overall health of the U.S. economy as well as the effectiveness of government programs.

The poverty rate in 2009 was the highest since 1994, but was 8.1 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available, the Census Bureau said.

Median income declined between 2008 and 2009 for non-Hispanic white and black households in the United States, while Asian households had the highest median income in 2009. Median income for Hispanic-origin households was about the same in 2009 as in 2008, the report said.

The number of working men fell since 2007 by 2.5 million, while the number of working women fell by 1.3 million, the report said.

“No other set of income years surrounding the recessions dating from 1969 to the present has experienced such a large decline in the number of workers,” the report said.

At the same time, earnings of working men fell by 4.1 percent, and earnings of working women fell by 2.8 percent. The data reflect a decline in the number of people working full-time, year-round jobs.

The number of people with health insurance fell for the first time in 2009 since the Census Bureau began collecting the data in 1987.

“The economic downturn exacerbated the steady erosion over the past decade in the number of people with employer-provided health coverage -- erosion caused by the unaffordable costs of health care for America’s businesses,” said Ron Pollack, of Families USA, a healthcare advocacy group.

The number of people covered by private health insurance fell from 2008 to 2009, while the number with government health insurance rose, the report said.

Some 194.5 million people in 2009 have private health coverage, compared to 201 million in 2008. The number of people covered by government plans rose to 93.2 million in 2009, from 87.4 million in 2008.

The newly enacted healthcare overhaul will require most people to obtain health insurance by 2014, and the government will offer subsidies to help them afford it.