Bloomberg View

A Smarter War on Poverty


A Smarter War on Poverty

Illustration by Bloomberg View

President Lyndon Johnson’s “unconditional war” on poverty in America would not be short or easy, he warned, and no single weapon or strategy would suffice. Half a century later, his all-out approach has proved him right. Were it not for Medicaid, unemployment insurance, Head Start, food stamps, and the many other programs LBJ set in motion 50 years ago, the poverty level would be almost twice as high as it is—16 percent of the population—with children and the elderly making up most of the difference. Still, the U.S. has almost 50 million people living in poverty, defined as about $12,000 in earnings for an individual and about $23,500 for a family of four. So the push must continue.

One of the most effective tools has been the earned income tax credit, a $55 billion program that rewards the working poor by refunding some of their income and payroll taxes. The credit, which has averaged about $3,000 for families with children, has helped reduce welfare rolls even more than the 1996 welfare-reform law did. This program, now geared toward single-parent families, could be expanded to help two-parent families and parents without child custody.

Congress could also lessen the disincentives to work or wed by not reducing antipoverty benefits when a couple marries or one spouse’s income rises above a cutoff. Nutrition programs are another effective poverty fighter. In 2012 the Supplemental Nutrition Assistance Program (aka food stamps) kept 5 million people out of poverty. School lunches did the same for 1.2 million children.

In November, when Congress allowed $11 billion in stimulus funds that beefed up the food-stamp program to expire, it meant an average 7 percent decrease in benefits for about 45 million people. And in the farm bill now under consideration, the House is proposing almost $40 billion more in food-stamp reductions over 10 years. That would kick 3.8 million people out of the program entirely. Tax credits and nutrition programs can mitigate existing poverty, but preventing poverty is just as important.

Experts debate the benefits, but when all the evidence is considered, it’s clear that universal pre-K enables children, especially poor and disadvantaged kids, to enter kindergarten with improved cognitive skills. One study says every $1 invested returns $11 later, so the $10 billion annual cost of President Obama’s proposal for universal preschool would pay for itself. Obama is also rightly pushing Republicans to extend unemployment benefits for the long-term jobless and to raise the minimum wage. Conservative Republicans, notably Representative Paul Ryan of Wisconsin and Senator Marco Rubio of Florida, are responding with antipoverty initiatives of their own. If both parties reach for solutions, the result may be a smarter war on poverty.

To read Cass R. Sunstein on a movie for our era and Ezra Klein on single-payer health care, go to: Bloomberg.com/view.


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