Revisiting The War on Poverty: Poverty Didn’t Win
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The Fiscal Times
July 11, 2012

Fifty years ago, Michael Harrington wrote The Other America, documenting – among the many ravages of poverty – that millions of children in the richest country on earth went to bed hungry every night. His book inspired two Democratic presidents, John F. Kennedy and Lyndon B. Johnson, to launch a war on poverty, then estimated at more than 20 percent of the population.

Fast forward a half century. Presidential candidate Newt Gingrich, running in the Republican primaries, accused President Obama of being the “food stamp president” because more people were receiving benefits from that anti-poverty program than at any time since its inception – 46 million at a cost of $75 billion a year. The recession-driven expansion triggered scorn from conservatives on Capitol Hill and a government crackdown on fraud that allegedly wasted about one percent or $750 million a year.

Lost in that political maelstrom was the dog that didn’t bark. Despite unemployment rates not seen since the Great Depression, there were no reports about the return of widespread child hunger in the U.S. “In this recession, poverty has gone up but hunger has not,” said John Carr, who directs anti-poverty policy development and advocacy for the U.S. Catholic Bishops’ Conference. “When somebody stood up and said this is the food stamp president, neither the president nor anyone else stood up and said, ‘we’re a better country because kids don’t go hungry in this country.’”

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Carr was one of about 200 anti-poverty advocates who gathered in Washington Tuesday to commemorate the 50th anniversary of Harrington’s pioneering work. But the mood was hardly celebratory. With a “fiscal cliff”  looming at the end of the year, liberals are girding for battle to defend food, housing and income support policies that over the last half century have largely ameliorated the worst effects of being poor in America.

But those programs are either scorned or ignored by most middle-class Americans and have few supporters in the mainstream of U.S. politics. As political factions position themselves for the inevitable tax-and-spending debate that will begin after the election, the president is aiming his political message at the beleaguered middle class. Congressional Democrats are putting front and center their opposition to any cuts to senior citizen entitlement programs, which have reduced senior citizen poverty in America to fewer than one in 10.

Republican standard bearer Mitt Romney and Republicans legislators remain steadfastly opposed to any tax increases and fight any expansion of anti-poverty programs – like extending Medicaid for the working poor or expanding the earned income tax credit, which subsidizes people earning at or near the minimum wage. And both parties say the slowdown in defense spending has gone far enough.

That leaves only the domestic discretionary budget, where most low-income programs reside, without a champion. “Nobody says let’s make sure that low-income people are not made worse off” in dealing with the fiscal crisis, said Carr.

It’s easy to say, like President Ronald Reagan did in his last state of the union address, that the war was a failure. “Poverty won,” he famously quipped. But that overlooks the fact that run-ups in the poverty rate since it hit its all-time low of 11.1 percent in 1973 have largely been recession-related. The slow decline in the rate after the recessions of the early 1980s, 1990s and 2000s was due to the growth of near low-wage jobs and the decline of good-paying middle-class jobs for lower skilled workers – not the persistence of grinding poverty associated with long-term joblessness.

But the aftermath of the Great Recession threatens to change that pattern. The job market has gotten a lot tougher for every income group, but it is especially difficult for poorly educated, low-wage workers who increasingly can only find minimum wage or near-minimum wage work. Today, a family of four needs 1 ½ full-time minimum wage jobs simply to escape poverty. The result? Though unemployment fell in 2010 from its 10.2 percent peak, official poverty increased to 15.1 percent and shows few signs of abating.

“We’re in a world of low-wage work for a long time to come,” said Peter Edelman, a law professor at Georgetown University who resigned from the Clinton administration because of its embrace of welfare reform. He now supports the switch from cash assistance to stay-at-home mothers to income support for low-wage workers.

“We have to educate our young people for the middle skill jobs of the 21st century. But what will those jobs be? We still don’t know if the American economy is going to generate those jobs” given the competition from India and China, he said.

Deficit hawks at the conference lamented the inability of the political system to honestly deal with who gets the most income support from the U.S. tax code, which could be substantially redrawn next year as part of tax reform. The largest share of the more than $1 trillion in tax expenditures (income tax deductions for home mortgage interest, health insurance and retirement savings, for instance) go to the upper middle class. Limiting or means testing those benefits could provide sufficient revenue to bolster income support programs for impoverished workers while providing new revenue to reduce the long-term budget deficit.

“One of the criteria (for tax reform) has to be how it affects poverty,” said Robert Bixby, executive director of the Concord Coalition, which is dedicated to fiscal responsibility and was co-founded by Peter G. Peterson, whose management company funds this website. “You want a fiscal sustainability plan that is socially acceptable as well. . . By streamlining middle-class entitlements that run through the tax code, by scaling those back, you can have a tax code that’s more progressive and raises more revenue.”

spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.