The War on Poverty 2.0
President Lyndon B. Johnson’s “unconditional war” on poverty in America would not be short or easy, he warned, and no single weapon or strategy would suffice. The intervening five decades have not only proved him right, they also have shown which approaches are most successful.
Were it not for Medicaid, unemployment insurance, Head Start, food stamps and the many other programs LBJ set in motion 50 years ago today, the poverty level would be almost twice as high as it is -- 16 percent of the population -- with children and the elderly making up most of the difference. In the recent downturn alone, the level would have surged by at least five percentage points.
Still, the U.S. has almost 50 million people living in poverty, defined as about $12,000 in earnings for an individual and about $23,500 for a family of four.
While poverty in the U.S. is no longer so dire that children are dying of malnutrition, as they were in the 1960s, raising the living standards of the poor remains an economic imperative -- not only to relieve the 50 million poor of want but also to help them become more productive workers and net contributors to society. So the push must continue -- using strategies that have done the most to raise up the poorest households over the past five decades.
One of the most effective tools has been the earned income tax credit, a $55 billion program that rewards the working poor by refunding some of their income and payroll taxes. The credit -- which has averaged about $3,000 for families with children -- has helped reduce welfare rolls even more than the 1996 welfare-reform law did. This program, now geared toward single-parent families, could be expanded to help two-parent families and parents without child custody.
Congress could also lessen the disincentives to work or wed by not reducing anti-poverty benefits when a couple marries or one spouse’s income rises above a cutoff.
Nutrition programs are another effective poverty fighter. In 2012, the Supplemental Nutrition Assistance Program (aka food stamps) kept 5 million people out of poverty. School lunches did the same for 1.2 million children.
In November, when Congress allowed $11 billion in stimulus funds that beefed up the food-stamp program to expire, it meant an average 7 percent decrease in benefits for about 45 million people. And in the farm bill now under consideration, the House is proposing almost $40 billion more in food-stamp reductions over 10 years. That would kick 3.8 million people off the program entirely -- the opposite of what a revived war on poverty requires.
Tax credits and nutrition programs can mitigate existing poverty, but preventing poverty is just as important. Like LBJ, who hoped to break the poverty cycle with the Head Start preschool program, President Barack Obama is calling for universal preschool.
Experts debate the benefits, but when all the evidence is considered, it’s clear that universal pre-K enables children, especially poor and disadvantaged kids, to enter kindergarten with improved cognitive skills. The $10 billion annual cost of Obama’s proposal would pay for itself -- one study says every $1 invested returns $11 later on -- if the U.S. is ever to close the gap in educational achievement between rich and poor.
Most Americans support expanding, rather than contracting, such social-welfare efforts. Obama paved the way with the Patient Protection and Affordable Care Act, which should keep Americans from having to choose between health care and other daily necessities. Obama is also rightly pushing Republicans to extend unemployment benefits for the long-term jobless and to raise the minimum wage.
Conservative Republicans, notably Representative Paul Ryan of Wisconsin and Senator Marco Rubio of Florida, are responding with anti-poverty initiatives of their own. Rubio is even suggesting wage-enhancement credits for low-income workers, a close cousin of the earned income tax credit.
Fifty years ago, LBJ was motivated in part by politics. He was hoping to attract the black vote. If politics is driving both parties to reach for solutions, that doesn’t make the goal less worthy. It may even result in a smarter war on poverty.
To contact the Bloomberg View editorial board: firstname.lastname@example.org.