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Re-Learning the Lessons of the War on Poverty

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For many, today's 50th anniversary of President Lyndon Johnson's declaration of War on Poverty is little to celebrate. The $15 trillion dollars spent have lowered the official poverty rate little, from 19 percent in 1964 to 15 percent today. These facts have led critics to decry the War on Poverty as a failure and aggressively work to scale back safety net programs like welfare, food stamps, and unemployment insurance.

Critics are right that the War on Poverty has been expensive, but wrong to call it a failure. Yes, poverty is still with us, but many of its often forgotten programs were landmark successes.

One success is the era's pioneering early childhood programs. With the aim to provide a "hand up, not a hand out," Head Start and food stamps programs begun in the 1960s improved infant health, increased educational attainment, and helped poor children lead healthier and more productive lives. The War on Poverty's investments in public schools increased college readiness, and aid for needy college students enabled more to pursue higher education. Some of these programs are costly, but many (especially early childhood programs) more than pay for themselves.

The War on Poverty's battle against racial discrimination is another major victory. Johnson not only secured the passage of the 1964 Civil Rights Acts, but his administration leveraged the power of the federal purse to enforce it. By threatening to withhold funding from organizations that did not comply (such as Medicare payments for hospitals and federal education funds for public schools that resisted integration), Johnson made Civil Rights a pocketbook issue and encouraged desegregation.

As hospitals desegregated, research shows that infant mortality among African Americans fell dramatically. Improvements in child health translated into better test scores for black teenagers well into the 1980s. Combined with anti-discrimination efforts in labor markets, these policies have reduced the gap in poverty rates between blacks and whites by half compared to 1962. The War on Poverty's programs encouraged greater workforce and college campus diversity today.

Another victory lies in the reduction in elderly poverty. With the arrival of Medicare and expansion of Social Security benefits, the poverty rate of the elderly fell by more than half, from 35 percent in 1959 to 16 percent by 1973. In 1964, poverty rates among the elderly were more than twice that of non-elderly adults. Today the situation is reversed, with the elderly rate only two-thirds as high as for non-elderly adults. Peace of mind and financial security also improved among the elderly's adult children, as Medicare ensured high quality care for their parents, paid the medical bills, and protected families against financial ruin.

Many of these successes (like desegregation and improvements in child health) are not captured in poverty rates. But even considering only poverty rates research implies the War on Poverty's impact is larger than often credited. America's anti-poverty programs have been swimming upstream against powerful, poverty-increasing currents. Earnings growth since the 1970s has been sluggish for less-educated workers, as economic growth has mainly benefited more skilled workers. The rise in male incarceration has reduced male breadwinners in low income families, and increases in non-marital childbearing and the rise of single-parent households mean more children are supported on one income.

Poverty rates would have been higher today than in 1964, had the War on Poverty never existed. Consumption-based measures of poverty, which include the value of non-cash and after-tax benefits, show a 26 percentage point decline from 1960 to 2010, with just over two-thirds of this decline occurring before 1980. The supplemental poverty shows that including Social Security benefits reduces elderly poverty from over 50 percent to 15 percent. Food stamps reduce child poverty by 3 points to 18 percent.

Of course, not every War on Poverty program worked as planned. Medicare's design has encouraged the increase in health care costs. The 1965 Elementary and Secondary Education Act reduced high school drop outs among white students, but had much less effect on black teens. And the costs of War on Poverty programs -- especially of Medicare and Medicaid -- have exceeded expectations.

On its 50th anniversary, we should embrace the War on Poverty's successes and learn from its failures. Considering only the costs neglects landmark achievements and sizable returns on the dollars invested: more integrated schools, hospitals, and workforces; peace of mind and financial security for families with aging parents; financial aid for college students; and federal support for poor public school districts. The War on Poverty's goals of increasing opportunities and more widely shared economic growth are just as relevant today, and its many successes highlight just how much directed policy can accomplish.