What the 50-Year War on Poverty Tells Us About Government

“A few years ago, there was a shining moment in that struggle. It seemed as if there was a real promise of hope for the poor—both black and white—through the poverty program,” King said in an April 4, 1967, speech at Riverside Church in New York City. “There were experiments, hopes, new beginnings. Then came the buildup in Vietnam, and I watched the program broken and eviscerated as if it were some idle political plaything of a society gone mad on war.”

The War on Poverty was barely an infant then. It’s 50 now. This epic societal struggle has consumed one-fifth of our republic’s history. It started, as a matter of policy, with the 1962 publication of the book The Other America, by Michael Harrington. A 1963 review in The New Yorker drove the topic into the upper reaches of John F. Kennedy’s White House until the book landed in JFK’s hand. Poverty, along with civil rights, became new priorities for Kennedy. Following his assassination, Johnson carried both torches.

Since then, America has spent $20.7 trillion on the War on Poverty—defined as means-tested government assistance to the poor. This includes housing, food, Medicaid, cash assistance, Head Start, and tax breaks like the Earned Income Tax Credit (EITC). Roughly one in three Americans receives some form of means-tested poverty assistance. And, yes, that’s trillion. With a “T.”

The statistic comes from Robert Rector, a conservative scholar at the Heritage Foundation, who argues the War on Poverty has not changed the statistical level of poverty but has changed the circumstances of being poor. By that, Rector means that the impoverished in America have creature comforts—air conditioning, TV, cable or satellite hookups, and computers—the poor in other countries can only dream of.

But Rector argues the only way to judge the War on Poverty is by the standard Johnson set forth—to improve self-sufficiency.

“We are not content to accept the endless growth of relief rolls or welfare rolls,” Johnson said upon signing the Economic Opportunity Act. “We want to offer the forgotten fifth of our people opportunity and not doles. Our American answer to poverty is not to make the poor more secure in their poverty but to reach down and to help them lift themselves out of the ruts of poverty and move with the large majority along the high road of hope and prosperity.”

Rector doesn’t see it.

“The question at the heart of this is can someone maintain an income above poverty thresholds without government aid,” Rector said. “By that standard, actually there’s no progress here. The capacity for self-support has not improved at all.”

I ran all of this by Jared Bernstein, Vice President Joe Biden’s former top economist, who oversaw implementation of President Obama’s stimulus law.

“That $20.7 trillion number represents around 6.6 percent of gross domestic product since 1964,” Bernstein said. “It’s a typical silly D.C. trick to give big numbers out of context to scare people. One could do this with any other part of the budget. How many trillions have we spent on defense since 1964? And yet there are still wars. And bad guys. Why doesn’t Rector complain about that?”

Bernstein cites figures that indicate the biggest driver of means-tested poverty spending has been Medicaid.

“Outside of Medicaid, spending on low-income programs was relatively constant as share of GDP, ranging between 1.5-2 percent,” Bernstein said. “The largest increase is from the Earned Income Tax Credit, a pro-work wage subsidy that Ronald Reagan loved.”

While it’s true Reagan and many conservatives since have praised the Earned Income Tax Credit, Reagan also advocated welfare reform but was rebuffed. After winning control of Congress in 1994, Republicans prevailed upon President Clinton to sign it in 1996. Liberals at the time predicted devastating consequences and were wrong. Welfare rolls declined, states and the federal government saved money, and privation decreased. Statistically, nothing has done more to reduce the prevalence of poverty among children and single mothers. Even during the Great Recession, poverty for children and single mothers did not climb above pre-welfare-reform levels.

The lessons?

“Welfare reform had very good timing, as it coincided with the tightest labor market in decades,” said Bernstein, adding that an expanded Earned Income Tax Credit and higher minimum wage aided those entering the workforce. “Welfare reform pushed a lot of people into the labor market, and many of them did relatively well. If you tried it today, I seriously doubt it would turn out that way.”

Obama never launched his own war on poverty, but his stimulus law pumped $831 billion into the economy—all of it deficit-financed and designed to soften the blow of the Great Recession.

I asked former Clinton Labor Secretary Robert Reich about the War on Poverty, welfare reform, and the Recovery Act. He described the War on Poverty’s biggest success as lifting seniors out of a life of income insecurity and fear. Like Bernstein, he lauded the EITC. His most interesting comments concerned the Obama stimulus.

“The Recovery Act was helpful in avoiding what would have otherwise been another Great Depression,” Reich told me. “Ironically, though, had we plunged into another Great Depression, we probably would have summoned the political will to transform our economy in ways that spread the benefits of subsequent growth far more widely (as we did in the New Deal). As it is, 95 percent of the economic gains since the Great Recession ended in 2009 have gone to the richest 1 percent of Americans.”

I asked Reich what he meant about transforming our economy and spreading the benefits of future growth.

“The hardship wrought by the Great Recession was far more limited, falling on a smaller subset of society,” Reich said. “As such, Obama didn’t have the broad-based political support required to create, for example, wage insurance, a reemployment system, an expanded Earned Income Tax Credit, a minimum guaranteed income, or any other program comparable in scope and effect to the New Deal.”

All of which got me to thinking about what Dr. King called for in a 1967 book called Where Do We Go From Here: Chaos or Community? In it, King, like Reich, called for a guaranteed income, calling it the most efficient method of confronting poverty.

Fifty years of spending. Twenty trillion and counting. Not much statistical change. The same ideas, marginalized as ever—even with Obama, Democratic supermajorities, and a Great Recession.

Perhaps Reich’s deeper point is worth pondering. The War on Poverty may have rendered privation a subset issue for the nation, sheltered and pushed out to the margins—never dominant because the safety net prevents a cataclysm. In other words, what stands in the way of King’s and Reich’s ideas is the very set of policies considered then and now to be insufficient.

That means new ideas and new politics are required. Because the old stuff is radioactive. The spending continues. The statistics don’t change much. And 50 years is time for a serious reassessment. Every American knows it. Time for us to stand next to the War on Poverty and look in the mirror.

The author is National Journal Correspondent-at-Large and Chief White House Correspondent for CBS News. He is also a distinguished fellow at the George Washington University School of Media and Public Affairs.