Guest MINDSETTER™ Sasse: Unlocking Opportunity By Reinventing The War On Poverty

Guest MINDSETTER™ Sasse: Unlocking Opportunity By Reinventing The War On Poverty

While our economy has undergone significant changes in the last five decades, policies to enhance opportunity and upward mobility have not. Today the anti- poverty dogmas of the 1960s are inadequate to meet the needs of the 21st Century.

Arthur C. Brooks, President of the American Enterprise Institute, has called on conservatives to be the guardians of a safety net, but also cautioned that “the safety net’s ultimate purpose cannot be to make some Americans’ perpetual subsistence in poverty a slightly less miserable experience.”  

Just over fifty years ago, President Lyndon Johnson declared an unconditional War on Poverty. Since then the United States has made progress in reducing material destitution. However, the Heritage Foundation reports that over $22 trillion (adjusted for inflation) spent on anti-poverty programs have had only a marginal impact on poverty.

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In 1950 over one-quarter of Americans lived in poverty. When President Johnson declared war on poverty in 1964 the poverty rate had decreased to 19.5 percent, and in 1966 when the poverty programs were lifting-off the poverty rate was 14.7%. The 40% decline in the poverty rate between 1950 and 1966 was largely attributable to growth in the private sector, not massive government spending on anti-poverty programs. 

Poverty in the United States Today

The poverty rate in the United States today approximates 14.5%, essentially what it was when President Johnson announced the War on Poverty. There has not been net progress in reducing America’s poverty rate since the late 1960s. The poverty rate usually declined two or three percentage points during periods of prosperity, and increased by a similar amount during periods of economic slowdowns.

Upward economic and social mobility in the United States has been tepid for the United States. As Speaker Paul Ryan opined, “a key tenet of the American Dream is that where you start off shouldn’t determine where you end up.” With one in five American children living in poverty, increasing the opportunity for upward mobility is one of the biggest challenges that we as a nation face.

Conservatives have been advancing reforms to help needy American families achieve self-sufficiency and upward mobility. The foundation to implement these reforms must include policies encouraging two- parent households valuing personal responsibility, good schools and fiscally sound government.

Economic opportunity is a mirage if children are held captive in failing schools. An education agenda based on accountability, student performance and choice is a precondition for economic and social mobility.

Safety net programs are placed in harm’s way when government is not fiscally responsible. Wasteful spending and crony capitalism may give public officials no option but to shred the safety net. Efficient government provides a firewall to protect the social safety net.

Reducing Poverty

The first step to effectively reduce poverty levels would be to replace the fragmented anti-poverty programs with a coordinated approach to assist needy individuals and families. Speaker Ryan has proposed that eleven federal programs be consolidated into a state block grant program to coordinate aid to needy families. Participating states would be required to demonstrate how federal funds would make people self -sufficient, require able bodied recipients to work, encourage innovation and be held accountable for results. 

The second immediate step would be to redesign federal poverty programs in order to reward and encourage work. Liberals and conservatives agree that the Earned Income Tax Credit (EITC) is one of the most effective pro-work anti-poverty programs. The EITC subsidizes wages using the federal tax code. Conservatives have proposed transforming the EITC into a wage subsidy available to all adults. Currently, the EITC benefits low income workers with children. Senator Marco Rubio (R-FL) has also recommended that the EITC be included in each workers paycheck rather than received at tax filing time.

By reinventing the 1960 anti-poverty programs to emphasizing local decision-making, educational excellence, work incentives and strong families the next President and Congress will have the opportunity to help move millions of Americans into the middle-class, something Great Society failed to do.

Gary Sasse is Founding Director of the Hassenfeld Institute for Public Leadership at Bryant University. He is the former Executive Director Rhode Island Public Expenditure and Director of the Departments of Administration and Revenue.