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low-income Americans and their children. The architects of the War on
Poverty believed that the combined effect of government policies attacking
poverty on many fronts—providing income when earnings are low,
providing access to health insurance, insuring that people have shelter and a
minimal food budget, and providing access to education at all ages—would
dramatically raise employment and earnings and reduce material hardship.
In the years since 1964, this optimism and belief in the capacity of government
to improve the lives of less fortunate Americans has at times given way
to the cynical belief that the safety net is ineffective, or even exacerbates the
problems of the poor by reducing the incentives for those able to work to
do so.
The most important lesson from the War on Poverty is that government
programs and policies can lift people from poverty; indeed they have
for the past 50 years. Poverty rates fell from 25.8 percent in 1967 to 16 percent
in 2012—a decline of nearly 40 percent. In 2012 alone, the combined effect
of all federal tax, cash and in-kind aid programs was to lift approximately
14.5 percent of the population—over 45 million people—out of poverty.
But another lesson is that we cannot afford to simply embrace any
program that purports to achieve this goal or attempt to freeze them in time.
Instead, our antipoverty efforts have benefited from enormous changes in
public policy since the 1960s, informed by a wealth of research on both successful
and failed programs that provide important insights into what does
and does not work in fighting poverty. Our safety net has evolved to put
more emphasis on rewarding and supporting work, such as by providing
greater support to working families through the EITC and refundable CTC,
while also making it easier for them to get help from programs like SNAP
and Medicaid. In 1967, we spent $19 billion in today’s dollars on what was
then called AFDC and nothing on the EITC. Today the EITC and partially
refundable CTC are 3.8 times the size of the TANF program.28 Meanwhile,
the Affordable Care Act advances the goal of providing quality affordable
health care to all Americans, with financial incentives to states to expand
their Medicaid programs to adults who are in or near poverty and generous
tax credits for moderate-income households. Our safety net remains imperfect,
but these reforms and improvements represent important progress—
and they also help many families work and raise the rewards to that work.
Nearly 50 million Americans still live in poverty, however, including
13.4 million children, and so there remains a need to do more to help the
poor. The 1964 Economic Report of the President estimated that the total
shortfall in income necessary to bring all poor families up to the poverty
28 Based on CEA calculations using data from http://www.whitehouse.gov/sites/default/files/
omb/budget/fy2014/assets/hist.pdf.
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