Poverty: Major Themes in Past Debates and Current Proposals

Poverty: Major Themes in Past Debates and Current Proposals

Gene Falk Specialist in Social Policy Karen Spar Specialist in Domestic Social Policy and Division Research Coordinator September 18, 2014

Congressional Research Service 7-5700

R43731

Poverty: Major Themes in Past Debates and Current Proposals

Summary

This year marks the 50th anniversary of the War on Poverty, but poverty remains a difficult policy challenge. The Obama Administration and some in Congress have offered proposals that seek to address poverty, with the proposals differing considerably in their focus and content. However, the themes reflected in these proposals echo prior efforts to address the issue of poverty.

The terms "poverty" and "welfare" (commonly thought of as cash assistance for the poor) are often intertwined, but federal policies affecting poverty are broader than a single program or set of programs. In fact, the social insurance program of Social Security may be the nation's most important antipoverty program. The incidence and character of poverty is affected by many facets of public life.

Over the last century, several watershed events have affected federal policies for the poor. These include the enactment of the Social Security Act in 1935, creating the first federal social insurance and federal-state public assistance programs; President Johnson's War on Poverty launched in 1964 that sought to address the "causes, not just the consequences of poverty" and began a period of expansion of services and noncash benefits for the poor; the "welfare reform" debates that began in 1969 and lasted until the mid-1990s, as societal expectations for single mothers shifted from staying home with children to work; and the culmination of these debates in the mid-1990s with the twin policies of requiring parents receiving assistance to work and "making work pay" for low wage-earning parents. Most recently, the Affordable Care Act expanded health care coverage, particularly for lower-income persons.

As federal antipoverty policy evolved--and some approaches were adopted, while others were not--certain overarching themes have recurred, including the following:

? Universal policies versus need-tested benefits: should policies be designed to benefit everyone, or be targeted on those with financial need?

? Income, services, or employment strategies: which of these strategies is most effective in reducing poverty?

? Work and other behavioral requirements: should conditions be placed on the receipt of assistance, and what behaviors should those conditions reinforce?

? Concepts of federalism: what is the appropriate balance between the federal, state and local governments in designing and implementing programs?

? Coordination and related policies: how can multiple programs work together to avoid overlap and duplication?

? Experimentation: how can we determine effectiveness? ? Budget considerations: what do programs cost, and how are these costs balanced

against other federal priorities?

The current congressional proposals and those of the Obama Administration, as well as future proposals, can be analyzed through the framework of these recurring major themes.

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Poverty: Major Themes in Past Debates and Current Proposals

Contents

Introduction...................................................................................................................................... 1 About This Report ..................................................................................................................... 1

Trends in Poverty............................................................................................................................. 2 Historical Overview of Federal Policies to Address Poverty........................................................... 5

The Great Depression and New Deal of the 1930s.................................................................... 5 The War on Poverty of the 1960s .............................................................................................. 6 Welfare Reform and Noncash Benefits in the 1970s ................................................................. 7 Promotion of Work in the 1980s................................................................................................ 8 Experimentation and Welfare Reform in the 1990s................................................................... 9 Need-Tested Policies in the 21st Century................................................................................... 9 Major Themes in Poverty Policy Debates ..................................................................................... 10 Universal Policies Versus Need-Tested Benefits ..................................................................... 11 Income, Services, or Employment........................................................................................... 13

The Income Strategy ......................................................................................................... 13 The Services Strategy........................................................................................................ 15 The Employment Strategy................................................................................................. 16 Work and Other Requirements for Recipients of Aid.............................................................. 18 Concepts of Federalism ........................................................................................................... 20 Program Coordination, Service Integration, and Waivers ....................................................... 23 Experimentation ...................................................................................................................... 24 Budget Considerations............................................................................................................. 26 Conclusion ..................................................................................................................................... 27

Figures

Figure 1. Official Poverty Rates Overall and for Children and the Aged, 1959-2013..................... 3

Tables

Table 1. Major Recurring Themes in Antipoverty Policy Debates ................................................ 10 Table 2. Selected Policies of the Obama Administration............................................................... 13 Table 3. Representative Ryan's "Opportunity Grant" and Other Antipoverty Strategies .............. 17 Table 4. Pathways Out of Poverty Act (H.R. 5352)....................................................................... 19 Table 5. Senator Rubio's War on Poverty Speech.......................................................................... 23

Appendixes

Appendix. Selected Readings ........................................................................................................ 30

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Poverty: Major Themes in Past Debates and Current Proposals

Contacts

Author Contact Information........................................................................................................... 32 Acknowledgments ......................................................................................................................... 32

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Poverty: Major Themes in Past Debates and Current Proposals

Introduction

Poverty in the United States--and initiatives to address poverty--is a current topic of discussion among policy makers and researchers. This year marks the 50th anniversary of the War on Poverty, launched in 1964 by President Lyndon Johnson. The rate of poverty has declined since then, yet poverty persists. The number of people officially counted as poor in 2013 was 45.3 million and the official poverty rate was 14.5%. Numerous research articles, editorials, statements by Members of Congress, and congressional hearings have marked the 50th anniversary, revealing different viewpoints on the effectiveness of past and current policies, and offering new initiatives for consideration.

The topic of poverty is much broader than a single program or set of programs. In public policy discussions, the terms "poverty" and "welfare" are often intertwined, with "welfare" generally thought of as cash assistance for the poor. However, more universal social insurance programs-- such as Social Security, Medicare, and Unemployment Insurance--may be the nation's most important antipoverty programs. Looking more broadly, poverty is affected by many aspects of public policy, ranging from macroeconomic policies to antidiscrimination laws to a national commitment for universal public education.

Reducing or ameliorating poverty has not been widely articulated as the explicit goal of major policy debates in many years, although the impact of policy decisions might directly affect the incidence or characteristics of poverty. For example, the decades-long discussion that resulted in the 1996 welfare reform law focused on moving recipients of cash assistance off the rolls and into jobs, along with related policies designed to "make work pay" better than welfare receipt. The debate preceding enactment of health reform in 2010 focused on expanding access to health insurance for uncovered populations and making coverage more secure for those who had it, among other things. Both of these initiatives were implicitly related to poverty, but neither was promoted explicitly for antipoverty purposes.

Most recently, some Members of Congress have introduced legislation, or announced elements of potential proposals, framed in the broad context of addressing poverty. These proposals would touch upon numerous existing federal programs. While the specifics differ--and in some cases are still being developed, these proposals reflect certain common themes that have characterized discussions of antipoverty policy for many years. Likewise, policies advocated by the Obama Administration also can be examined in the context of these overarching historic themes.

About This Report

This report begins with an overview of trends affecting both the incidence of poverty and characteristics of the population, and highlights changing perceptions of the poor and causes of poverty. The report then provides a short history of key federal policies enacted over the past century to address poverty. To provide a framework for analyzing current and future proposals, the report then presents several overarching themes that have recurred in poverty policy debates over the course of this history. These themes are listed in Table 1 and discussed later in the report.

The report includes a series of text boxes, labeled as tables, which very briefly highlight aspects of selected congressional proposals and Administration initiatives, in the context of these overarching historic themes. The report does not discuss the proposals in detail, but attempts to provide context and a foundation for analyzing them. Specifically, Table 2 looks at selected

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