“We have declared unconditional war on poverty. Our objective is total victory. . . . I believe that thirty years from now Americans will look back upon these 1960s as the time of the great American Breakthrough . . . toward the victory of prosperity over poverty.”
Lyndon B. Johnson,
My Hope for America
Fifty years ago, President Lyndon Johnson declared war on poverty. Today, in the aftermath of the Great Recession, we are once again debating the best way to help the least among us. On this important anniversary, we should take stock of the federal government’s anti-poverty programs—and figure out why we have yet to achieve the “total victory” Johnson predicted.
The War on Poverty at a Glance
Despite trillions of dollars in spending, poverty is widespread:
In 1965, the poverty rate was 17.3 percent. In 2012, it was 15 percent.
Over the past three years, “deep poverty” has reached its highest level on record.
About 21.8 percent of children live below the poverty line. Today, the federal government’s anti-poverty programs are duplicative and complex. There are at least 92 federal programs designed to help lower-income Americans. For instance, there are dozens of education and job-training programs, 17 different food-aid programs, and over 20 housing programs. The federal government spent $799 billion on these programs in fiscal year 2012. And a significant challenge today is the decline in labor-force participation.
The labor-force participation rate has fallen to a 36-year low of 62.8 percent.
CBO projects the rate will fall to 60.8 percent over the next decade.
A number of factors are causing this decline—changing demographics, slow economic growth. But federal policies are also discouraging work. For example, a rapid increase in disability caseloads has reduced the labor force. But a large problem is the “poverty trap.” There are so many anti-poverty programs—and there is so little coordination between them—that they often work at cross purposes and penalize families for getting ahead.
CBO finds that some low-income households face implicit marginal tax rates of nearly 100 percent.
Lyndon B. Johnson, “My Hope for America,” Random House LLC, 1964.
The Official Poverty Rate does not include government transfers to low-income households. For a fuller discussion of poverty measures, see Appendix I.
A household living in “deep poverty” makes less than 50 percent of the poverty line.
“The Budget and Economic Outlook: 2014–2024,” Congressional Budget Office, Feb. 2014: p. 38.
“Effective Marginal Tax Rates for Low- and Moderate-Income Workers,” Congressional Budget Office, Nov. 2012.
The War on Poverty: 50 Years Later