The Forever War on Poverty

After more than fifty years of federal anti-poverty programs, the real question is not simply how much government redistributes, but whether Americans have greater opportunity to become economically independent.

For more than half a century, Washington has spent enormous amounts of money fighting poverty. The promise was never modest. Lyndon Johnson did not announce a “War on Inconvenience.” In 1964, his administration explicitly talked about eliminating poverty and creating opportunities for Americans to escape it.[1]

That history deserves a fair accounting.

The first thing conservatives should acknowledge is that it would be inaccurate to say government programs accomplished nothing. The official poverty rate is lower today than it was in the 1960s, and some programs clearly reduce hardship. Social Security, for example, has dramatically reduced poverty among older Americans.

But that is not the same thing as declaring victory.

In 2024, the Census Bureau still counted 35.9 million Americans living below the official poverty line. The official poverty rate was 10.6 percent.[2] After decades of programs, agencies, tax credits, subsidies, and transfers, poverty remains a stubborn feature of American life.

That should force a different question. Are we measuring success by how much government spends, or by how many people become economically independent?

Government assistance can relieve poverty without necessarily creating all the conditions necessary for someone to escape it permanently. A benefit can help pay this month’s grocery bill. It cannot by itself create a stable career, a growing business, a strong local economy, or the skills necessary for long-term advancement.

There is also a problem built into some means-tested programs. As recipients earn more money, benefits can phase out. The Congressional Budget Office has found that these phaseouts can increase effective marginal tax rates for lower-income workers, meaning an additional dollar earned does not always translate into an additional dollar available to the household.[3] That can reduce the financial reward for additional work.

That does not mean Americans refuse to work because benefits exist.  The evidence is more complicated than what the CBO has found: work requirements in TANF increased employment among targeted recipients, particularly initially. In contrast, SNAP work requirements produced smaller employment effects, and Medicaid requirements showed little evidence of increasing employment.[4] Program design matters.

Then came a noticeable change in Washington’s vocabulary.

In December 2013, President Barack Obama described growing inequality and declining upward mobility as “the defining challenge of our time.”[5] The emphasis increasingly included not merely whether poor Americans had more resources, but also how income and opportunity were distributed across society.

Those are related questions, but they are not identical.

A society can become more unequal while incomes at multiple levels rise. Inequality can also decline during economic disruptions if incomes at the top fall disproportionately. A measure of inequality alone therefore does not tell us whether everyone’s standard of living is improving.

Government can unquestionably reduce measured inequality through taxes and transfers. CBO reports that means-tested transfers and the federal tax system make household income less unequal than income would be if measured before those policies are applied.[6]

But reducing the statistical distance between households is different from creating productivity, wealth, and upward mobility.

That is where America’s political argument too often gets lost. Critics of redistribution can sometimes treat every tax as hostility toward success. Supporters can sometimes focus so heavily on disparities that the actual improvement in people’s living standards receives less attention.

The better test is mobility.

Can a poor child grow into a middle-class adult? Can a worker take an extra shift and meaningfully improve their financial position? Can a small business become a large business? Can families accumulate savings, buy homes and leave something to their children?

If the answer is no, then redistributing income after the fact is not enough.

After more than fifty years, the lesson is not that every anti-poverty program failed. The evidence does not support that conclusion. The lesson is that poverty policy should be judged by more than dollars distributed or inequality statistics improved.

A safety net can help Americans survive difficult circumstances. A successful economic policy should also make it easier for them to climb beyond those circumstances.

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Endnotes

1. Lyndon B. Johnson, “Annual Message to the Congress on the State of the Union,” January 8, 1964; and “Remarks Upon Signing the Economic Opportunity Act,” August 20, 1964.
American Presidency Project: 1964 State of the Union
American Presidency Project: Economic Opportunity Act remarks

2. U.S. Census Bureau, “Poverty in the United States: 2024.”
U.S. Census Bureau report

3. Congressional Budget Office, “How Taxes and Transfers Affect the Work Incentives of People With Low and Moderate Income.”
Congressional Budget Office analysis

4. Congressional Budget Office, “Work Requirements and Work Supports for Recipients of Means-Tested Benefits.”
Congressional Budget Office report

5. Barack Obama, “Remarks by the President on Economic Mobility,” December 4, 2013.
Obama White House Archives

6. Congressional Budget Office, “The Distribution of Household Income, 2022.”
Congressional Budget Office report

7. Social Security Administration, “Social Security: A Program and Policy History.”
Social Security Administration historical analysis

Spencer Patel is a contributor at Direct Line News, covering Maryland government and election policy.

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