Democrats' War on Poverty Has Failed

The following is the first in a series of excerpts from “Rebuilding America” to be featured on

“The Great Society rests on abundance and liberty for all. It demands an end to poverty and racial injustice, to which we are totally committed in our time.”

—President Lyndon Baines Johnson, May 22, 1964

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On January 8, 1964, less than two months after John F. Kennedy was assassinated in the streets of Dallas, President Lyndon B. Johnson delivered his first State of the Union address to a joint session of Congress. With a rousing call to action, he declared an “all-out war on human poverty,” asserting that this session of Congress would do more for civil rights “than the last hundred sessions combined.” Using language generally reserved for America’s resolve to defeat foreign enemies, President Johnson dedicated the nation to combating the internal enemy of poverty: “This administration today, here and now, declares unconditional war on poverty in America. I urge this Congress and all Americans to join me in that effort.” Franklin D. Roosevelt, a mentor of Johnson, had created the New Deal. For a man of Johnson’s imagination and ambition, that goal, lofty as it was, was still not aimed high enough. Johnson proposed more than a new deal, he proposed a “great society,” one that would bring the opportunity for peace, health, and economic security to all Americans, regardless of age, sex, or race.

Nearly a quarter century later, in January 1988, President Ronald Reagan delivered a State of the Union address in which he declared that the War on Poverty had failed: “My friends, some years ago, the Federal Government declared war on poverty, and poverty won.” The remark brought laughter from the joint session of Congress that Reagan addressed. Yet President Reagan meant what he said that night:

Today the Federal Government has 59 major welfare programs and spends more than $100 billion a year on them. What has all this money done? Well, too often it has only made poverty harder to escape. Federal welfare programs have created a massive social problem. With the best of intentions, government created a poverty trap that wreaks havoc on the very support system the poor need most to lift themselves out of poverty: the family. Dependency has become the one enduring heirloom, passed from one generation to the next, of too many fragmented families.

That night President Reagan issued a direct conservative challenge to the heart of the liberal political agenda that had dominated the American Left since the 1930s. The government had failed to devise a program that could eradicate poverty in America. After spending trillions of dollars and creating a massive federal bureaucracy, Reagan returned to a simple but critically important theme: without strong families, the poor would never emerge from poverty. Even more damaging, Reagan directly stated that federal antipoverty programs actually functioned to destroy poor families, thereby perpetuating the culture of poverty they were trying to eliminate. Federal antipoverty programs, in Reagan’s analysis, had become part of the problem, not the solution.

Poverty in America Persists

What evidence is there to support President Reagan’s contention that we lost the War on Poverty? If we take a careful look at the statistical data compiled by the U.S. Census Bureau, we find ample evidence that the incidence of poverty remains disturbingly large, both as a percentage of the population and in absolute numbers. To document the point, we will have to struggle through a few paragraphs of statistical data, but the numbers are important if we are to state the case correctly.

The Census Bureau reported in August 2005 that the poverty rate in 2004 had actually increased since 2003, up to 12.7 percent in 2004 from 12.5 percent in 2003. This translated into an additional 1.1 million people in poverty, with some 37 million Americans living in poverty in 2004. The progress eliminating poverty in the forty years since Lyndon Johnson declared war on poverty is negligible. In 1964 the Census Bureau estimated that 19 percent of the U.S. population lived in poverty, approximately 36 million people. In that forty-year interval, poverty never measured less than 11 percent of the population. In 1983, under President Reagan, poverty registered 15.2 percent; in 1993, at the beginning of Bill Clinton’s presidency, poverty was measured at 13.7 percent of the population. In 2004, under George W. Bush, a president often accused by the political Left as not caring about the poor, the poverty rate declined to 12.7 percent. Still, some 37 million Americans remain poor.

Putting the best possible face on the War on Poverty, we should note that in 1959 and 1960, before the War on Poverty began, poverty was measured at approximately 22 percent of the population, some 39 million Americans. We can argue that a reduction from 22 percent in 1959 to 12.7 percent in 2004 means that the incidence of poverty has been reduced by roughly half over the last forty-five years. Yet some 39 million Americans were counted as poor in 1959, nearly the same number as the nearly 37 million Americans counted as poor in 2004. Despite all the money and effort expended by government, a core group of poor persists, resistant to any and all efforts to remove them from the poverty rolls. It is this core group of “underclass” Americans that the War on Poverty and the political Left has failed. If the War on Poverty was meant to eliminate poverty, rather than merely reduce poverty, then a new strategy is needed.

In addition, attributing causal effects is very difficult in social science. How can one prove that the reduction in the incidence of poverty since 1959–60 is a direct result of the Great Society’s War on Poverty programs? A reasonable alternative explanation is that the U.S. economy has experienced a world-historic expansion since 1958–60, a time when the country was emerging from an economic recession. In 2004 the World Bank measured the U.S. gross domestic product (GDP) at $11.7 trillion, up from $9.8 trillion in 2000.4 A historical database maintained by the U.S. Department of Commerce shows the dramatic straight-line rise of the GDP from $526 billion in 1960 to $10.9 trillion in 2003 and $11.7 trillion in 2004.5 The U.S. economy remains the largest in the world. U.S. job growth has also more than doubled since 1960. The U.S. Bureau of Labor Statistics reports total nonfarm employment at 54 million jobs in 1960, a number that has expanded to an estimated 131 million jobs in 2005.6 This dramatic economic expansion, plus an aggressive federal War on Poverty, should have eliminated poverty, that is, if eliminating poverty through government programs alone were possible. Still, in 2004 we have 37 million poor Americans among us.

The War on Poverty has spanned the terms of eight different Democratic and Republican presidents: Lyndon B. Johnson (D, 1964–69), Richard M. Nixon (R, 1969–74), Gerald R. Ford (R, 1974–77), Jimmy Carter (D, 1977–81), Ronald Reagan (R, 1981–89), George H. W. Bush (R, 1989–93), Bill Clinton (D, 1993–2001), and George W. Bush (R, 2001–present). These presidents seriously took on the hard question of poverty; their administrations did their utmost to apply techniques they honestly believed to be politically sound methodologies designed to eliminate poverty. We have tried both conservative and liberal solutions to the problem, all without realizing success. If anyone could have eliminated poverty, these gentlemen should have accomplished the task, especially since they commanded the full resources and authority of the U.S. government and were backed by multiple Congresses willing to pass countless antipoverty laws.

On August 22, 1996, President Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act, announcing that he had fulfilled his promise to “end welfare as we know it.” Looking critically at the legislation, we could see that a liberal Democrat was trying to take ground that had traditionally been the preserve of conservative Republicans. Clinton was trying to change welfare into work-fare, devising a plan to get welfare recipients off the public dole and onto the private sector’s payroll. Perhaps by 1996 the political Left had come to the conclusion that the American public was so tired of funding antipoverty programs that the only way to save the governmental welfare programs was to redefine them as work programs. Welfare bureaucrats were being redirected to get welfare recipients into the private workforce or lose their welfare jobs. Clinton legitimately considered this a major redirection of the poverty program. Still, poverty persisted. Thus, even a Democrat president willing to embrace proposals that were typically advanced by conservative Republicans could not solve the problem.

Nor is the problem that we have failed to spend money generously. The public expenditure on the variety of governmental schemes devised in the last forty years to eliminate poverty has been extraordinary. Since 1964 we have spent $8–10 trillion on antipoverty programs. In 1996, at the midpoint in the Clinton administration, the federal government expended $191 billion on poverty programs, fully 12.2 percent of the federal budget. President George W. Bush actually increased the effort. The 2006 budget, at the midpoint of Bush’s administration, calls for a massive increase in poverty programs, increasing the expenditure $368 billion to 14.6 percent of the federal budget.7 The Bush administration oversees a host of continuing poverty programs that includes Medicaid, food stamps, supplementary security income, temporary assistance to needy families, child day-care payments, child nutrition payments, foster care, adoption assistance, and health insurance for children.

The conclusion is virtually inescapable: if the availability of nearly an unlimited amount of money and the determination of countless government bureaucracies were the necessary and sufficient conditions to eliminate poverty, then in 2004 we should not still have more than 12 percent of the U.S. population—nearly 37 million people—in poverty.

Even though the political Left wants to make all biblical references suspect, we are led to affirm the admonition of Jesus in the New Testament: “For ye have the poor always with you” (Matthew 26:11). Some two thousand years ago, one of the wisest teachers suggested that the problem of poverty was truly intractable. Is there any governmental poverty program left that we have not implemented one way or another in the literally hundreds of antipoverty laws Congress has passed since 1964? Maybe we should just take another $10 trillion and hand it out as a lump-sum payment to the 37 million Americans who are poor. The expenditure might be cheap if a one-time massive payment would make poverty disappear. Apparently, there are dimensions of poverty that money alone cannot solve. That is our first important conclusion.

Yet there is a more subtle point that we will want to consider. As we noted, President Johnson followed the liberal tradition of Democratic Party politics founded by his mentor, Franklin D. Roosevelt. Central to Roosevelt’s New Deal thinking was the assumption that massive governmental intervention in what before had been considered a largely private economy was needed to solve the problems of the Great Depression. When Johnson initiated the Great Society, he almost intuitively reasoned that governmental action would be required if we were to end poverty. Alternatives to government intervention and spending were never seriously considered by his administration. Conservative opponents, who at the time opposed the creation of a massive new government bureaucracy, were a minority whose views seemed out of step if not downright dangerous. Even today, the political Left is hard pressed to consider that we have no choice but to persist and fine-tune government antipoverty programs. How many more years of failure will it take before the political Left is finally willing to admit that the approach to eliminate poverty through massive government programs has fundamentally failed to meet the originally stated goal of the Great Society?

Do we have to wait another ten years before we declare the War on Poverty a failure? Should we keep trying until the year 2064, when we will have wasted one hundred years on an effort that was doomed to fail from the start? President Reagan believed a quarter of a century was enough. In 1988 he declared that poverty had won. We doubt that the political Left will ever admit that the War on Poverty has failed. It’s much more likely that the political Left will simply argue that the Great Society’s original stated purpose of eliminating poverty was never meant to be taken literally, but was rather a lofty goal, a metaphoric statement of intent. Moreover, the Left will claim any reduction of poverty has resulted from governmental action, not from the historic expansion of the U.S. economy that we have experienced since the 1960s.

Our charge is different. We maintain that massive government spending will never eliminate poverty. After another forty years of governmental effort and the expenditure of another $10 trillion in public funds, what confidence can the political Left give us that we will be able to reduce the incidence of poverty by half once again, to only 6 percent of the population? Even then, if the U.S. population continues to grow at the same rate we are experiencing today, we could still be left with more than 30 million Americans in poverty.

From the moment the Great Society conceived of the War on Poverty, it was a bad idea to believe that we could eliminate poverty by allowing a government bureaucracy to distribute massive amounts of public money to the poor. In the antipoverty efforts of the last four decades, we have witnessed one of the largest income redistributions from the taxpayers to the poor that the world has ever seen. Still, we have not eliminated poverty. Why should we believe that continued or expanded, new, and “improved” government programs, spending more trillions of dollars, will ever achieve more?

Maybe money could have solved the problem of poverty, but only if the money had not been distributed through a government bureaucracy. Perhaps we would have achieved greater results if a different solution had been considered, a solution that relied predominately upon the private economy to produce the desired results of eliminating poverty. Whatever made us think that a huge government bureaucracy with nearly unlimited funding could eliminate poverty? Perhaps President Reagan was right—if we do not reinforce family structures, we will never eliminate poverty. Maybe he was also right in arguing that government welfare programs actually destroy the family structures of those Americans remaining in poverty since the start of the Great Society. Reagan’s vision was that no amount of dependence upon government bureaucracy could ever substitute for the fundamental values only a family can instill in a person. This is a vision religious leaders would understand. Considering the degree to which the political Left has become radicalized in a secular direction, we expect this message will fall on deaf ears in that corner of the political spectrum. Nonetheless, we intend to advance the theme in the pages that follow.

Poverty Continues to Have an African American Face

When Lyndon Johnson talked about eliminating poverty, he always seemed to mention eliminating racial injustice. Why? The answer is simple. When poverty in America is mentioned, the thought of racial discrimination is never far behind. Yes, there always have been pockets of white poverty, the rural “backwater” poverty typical of the remote areas of the Appalachian Mountains or isolated rural communities typical of West Virginia. African American poverty is different in nature, a phenomenon considered inherent to the fundamental situation of second-class citizenship that blacks have had in the United States since the days when slavery was tolerated in this country. The assumption that poverty is largely a “black problem” has been a generally unspoken understanding when Americans ponder why we have a persistent poverty problem. Our understanding of racial discrimination against African Americans translates almost unconsciously into an understanding that racial inequality stretches across all dimensions of life, including economic, and always to the disadvantage of African Americans. Again, we will have to examine a few paragraphs of dense numbers to make the case that poverty in America has been disproportionately an African American problem.

In 2004 the U.S. Census Bureau further reported that the poverty rate for African Americans (24.7 percent) was nearly three times the poverty rate for non-Hispanic whites (8.6 percent). The poverty rate for Hispanics (21.9 percent) was not far behind that of African Americans. In a population numbering more than 290 million people, African Americans make up only approximately 13 percent of the total; non-Hispanic whites are by far the largest group, approximately 67 percent. Yet when we look at poverty, African Americans and Hispanics make up a larger percentage of the poor than their numbers in the population would suggest. Put more bluntly: the poor are disproportionately African American or Hispanic. Some 25 percent of the poor are African American, another 25 percent are Hispanic, and only about 46 percent are non-Hispanic whites, even though non-Hispanic whites constitute about 67 percent of the total population. Put even more bluntly: in 2004, after a forty-year effort to remove the legal barriers of racial discrimination, poverty in the United States still impacts America’s racial minorities more deeply than it affects America’s white majority.

Over the four decades of the War on Poverty, progress has been made on the percentage of African American families that are poor. In 1959, before the War on Poverty, more than 55 percent of all African Americans were poor. The percentage of African Americans who were classified as poor held at approximately 30 to 35 percent from 1968 through 1994, when a reduction is evident, down to the present level of about 25 percent. In this same time, the percentage of whites classified as poor remained reasonably constant at around 10 percent. The dramatic growth of the U.S. economy, as we argued earlier, is the most likely reason poverty among African Americans has improved since 1959. Also, numerous Supreme Court decisions have attacked a legal structure that permitted racial discrimination, a subject we will cover more extensively later. Still, African Americans continue to suffer twice the incidence of poverty as whites. On this the data are clear. Finding the cause and answering the question “Why?” are much more difficult problems. To address these questions, we need to examine some of the key arguments of the past decades that have undergirded the intellectual basis for understanding the complex question of racial discrimination and poverty.

First, we want to make a few comments on the question of Hispanic poverty. In 1964 the percentage of Hispanics in the United States was so small that the U.S. Census Bureau made no effort to track this group separately. Today, after decades of “multicultural” thinking impressed upon America by the political Left, the Census Bureau contends with many categories of racial distinction. Today the Census Bureau distinguishes American non-Hispanic whites from Hispanics, from African Americans, from American Indians, from Alaskan Natives, from Asians, from Native Hawaiians, and from Other Pacific Islanders. Other tables distinguish white alone and black or African American alone from those of “two or more races.” “Melting pot” characteristics that have distinguished America since the first European immigrants hit these shores. Forty years from now we may have difficulty making racial distinctions at all. Today, the Census Bureau makes no attempt to identify people based on whether their grandparents or great-grandparents came from Italy, Ireland, or dozens of other countries. Sorting out ethnic distinctions among the U.S. population has already become nearly impossible as subsequent generations intermarry and mix together.

The wave of immigration from the Spanish-speaking countries within the Western Hemisphere has grown to such a level that Hispanics threaten to overtake African Americans as the country’s largest minority group. Current poverty reports issued by the U.S. Census Bureau document that the incidence of poverty among Hispanics is about the same proportion as the incidence of poverty among African Americans. While the Census Bureau aims to be good at counting, very little effort is put forth into the more politically difficult area of explanation. The Census Bureau data do not explore whether the nature of Hispanic poverty is the same as African American poverty, or whether the causes and direction of the observed poverty among the two groups are different. But we will return to this subject later in this chapter.

The point here is that while the Census Bureau is documenting an incidence of poverty among Hispanics roughly equivalent to that of African Americans, the phenomenon of a statistically large and growing Hispanic population in America is yet relatively new. Historically, the discussion that there is a racial dimension to American poverty has focused on African Americans and the racial injustice blacks have experienced in America. Before taking up the question of Hispanic poverty, however, we want to examine African American poverty more closely. What are the intellectual arguments that have been forwarded to understand black poverty in America? What direction has public policy taken as a result of that intellectual debate? These are our next key questions.