January 09, 2014
Shawn Fremstad
PBS News Hour, January 9, 2014
See article on original website
2014 marks the 50th anniversary of the War on Poverty and a mid-term election year. “Poverty,” as Jeremy Peterswrites in The New York Times, “is suddenly the subject of bipartisan embrace.”
President Barack Obama will speak Thursday about efforts to close the income gap and designate “promise zones” in communities across the country that will be targeted with federal funding and private sector programming. He’ll highlight the issue again in his upcoming State of the Union address, underscoring the populist message Democrats are carrying into this year’s congressional elections.
Republicans are speaking about poverty, too. In a speech from President Lyndon Johnson’s old office in the Capitol Wednesday, Sen. Marco Rubio, R-Fla., set out his own anti-poverty agenda. “Raising the minimum wage may poll well, ” he said, “but having a job that pays $10 an hour is not the American dream.” He proposed uniting the federal government’s existing anti-poverty programs into one agency that would administer funding to states and replacing the earned income tax credit. Rep. Paul Ryan, R-Wis., has also made poverty an issue in his public appearances, criticizing a “failed” social safety net.
But poverty, and the federal programs approved to tackle it, was a bipartisan issue 50 years ago. Conservatives played an instrumental role in implementing the War on Poverty’s key programs, writes Center for Economic and Policy Research senior research associate Shawn Fremstad. He’s the co-author of Half in Ten’s recent report on poverty in the United States: “Resetting the Poverty Debate: Renewing Our Commitment to Shared Prosperity”. He adapts for the Business Desk a CEPR essay in which he argues that the bipartisan investment in the War on Poverty has made America stronger.
Shawn Fremstad: Fifty years ago this week, President Lyndon Johnson declared war on poverty and put forward a legislative agenda encompassing a host of measures to boost employment, increase educational attainment and reduce economic hardship. Discussions of the War on Poverty in the media typically jump immediately to the question of whether the War was a success or failure. But before getting to that question, we need to have a solid understanding of what it actually was and wasn’t.
Two things are particularly notable. First, the War on Poverty went far beyond means-tested assistance to low-income people. In fact, it focused mostly on health, education and employment, but also included seemingly unrelated measures like tax cuts. Second, while Johnson proposed and implemented the War on Poverty, it wasn’t just a liberal, Democratic initiative. President Richard Nixon largely built on and institutionalized the War on Poverty, and most of the major initiatives of the War passed with solid bipartisan support.
On that first point, in a new book from the Russell Sage Foundation, Martha Bailey and Sheldon Danziger remind us that the full legislative agenda associated with the War on Poverty included the creation of Medicare and Medicaid, the expansion of minimum wage coverage, an unprecedented effort to increase access to post-secondary education, increased federal support for elementary and secondary education, and many other initiatives to boost skills and employment.
And, although few liberals or conservatives mention it today, Johnson also viewed tax cuts as part of the War on Poverty. As he put it, tax cuts were needed “above all … to create new jobs and new markets in every area of this land.” Just over a month after Johnson declared war on poverty, Congress passed the Revenue Act of 1964, which cut individual tax rates across the board. The top marginal rate, for example, was reduced from 91 percent to 70 percent, a major cut at the time, but still a far cry from today’s top marginal rate of 39.6 percent.
On the second point — bipartisan support, before Ronald Reagan rhetorically established himself in opposition to the War on Poverty, Richard Nixon and other congressional conservatives largely embraced it as a practical matter. For example, in 1969, Nixon called for adding an automatic cost-of-living adjustment (COLA) to Social Security as well as an across-the-board benefit increase. He signed both into law in 1972.
Similarly, Nixon and other conservatives played a leading role in the establishment of the Supplemental Nutritional Assistance Program (SNAP), then known as food stamps, and other nutrition assistance initiatives. SNAP was expanded from a pilot program to a permanent one in 1964. But only about 1.5 percent of Americans were receiving benefits the month after Johnson left office in 1969, and the decision to operate a food stamp program as well as the eligibility standards were still left to local areas.
In May 1969, Nixon told Congress that “the moment is at hand to put an end to hunger in America itself” and called for expanding SNAP. It was the legislation adopted pursuant to this call that made food stamps a truly national program with uniform eligibility standards and availability nationwide and established the Women, Infants and Children (WIC) food program. By October 1974, about 7 percent of Americans were receiving food assistance. Today, 15 percent of us receive food stamps, or nearly 47 million people.
Additional programs include Supplemental Security Income (SSI), which provides basic income support to the elderly and people with disabilities, and the earned income tax credit (EITC), designed to allow low to moderate earners to keep more of what they earn. Established in 1972, Supplemental Security replaced state programs for the elderly and disabled with a federal program that applied uniform eligibility criteria throughout the nation. And the EITC was first established in the Tax Reduction Act of 1975, signed by President Gerald Ford. Both SSI and the EITC had their beginnings in Congressional debates in the early 1970s over Nixon’s otherwise ill-fated Family Assistance Plan proposal, an extension of the original War.
So, getting back to the question of whether the War on Poverty was a success or failure, it was a failure if one thinks that Medicare is a failure, or the student financial aid system largely created in 1965 is a failure, or the strengthening of Social Security is a failure, or the extension of the minimum wage to millions of previously uncovered workers was a failure, or … well, you get the point.
The bottom line is that the bipartisan investments and initiatives begun during the Johnson and Nixon years made America a stronger, better-educated, healthier and harder-working nation. Without the initiatives enacted during this decade, like Medicare and Medicaid, a stronger Social Security system, Pell Grants, Head Start and nutrition assistance, America would be a poorer and less just place.
That said, there was a weak spot in the War on Poverty. As American Prospect co-editor Paul Starr has noted, “the idea of a war on poverty without strengthening the hand of labor was a great mistake.” Partly as a result, other policies put in place during this period, particularly in the 1980s and in the 2000s leading up to the Great Recession, have worked at cross-purposes. For example, the mostly sensible tax cuts of the 1960s gave way to the more recent excessive tax cuts for the wealthy; the minimum wage was allowed to decline in real terms; workers’ ability to join unions without retaliation was weakened.
Looking forward, to eliminate poverty within the next 50 years, we will need a multi-faceted effort to rein in inequality and increase the economic security of middle and working class families.
