Losing the War
Forty-six years ago today, President Johnson vowed to wipe out poverty.


Robert Rector

Today marks the 46th anniversary of the War on Poverty. On March 16, 1964, Pres. Lyndon Johnson announced a new government mobilization that he claimed would yield “total victory” against poverty in the United States. Johnson promised his “war” would be an “investment” that would “return its cost manifold to the entire economy.”

The War on Poverty sparked an astonishing growth in what is called “means-tested” welfare — that is, programs targeted exclusively toward poor and low-income Americans. (By contrast, programs such as Social Security and Medicare are not means-tested and provide assistance to the elderly across the entire population.) The means-tested welfare system today comprises more than 70 federal programs, including food stamps, public housing, the Earned Income Tax Credit, and Medicaid.

These welfare programs are funded not only by the federal government but also by state governments’ payments into federal programs. Prior to the current recession, $1 out of every $7 in total federal, state, and local government spending went to means-tested welfare.

Means-tested welfare spending has grown enormously since President Johnson’s day. After adjusting for inflation, welfare spending today is 13 times greater than it was then. Means-tested welfare spending was 1.2 percent of the gross domestic product (GDP) in 1964; by 2008, it had reached 5 percent of GDP.

President Obama plans to sharply accelerate the growth in welfare spending. In FY2007, total government spending on means-tested welfare was a record-high $657 billion. By FY2011, total government spending on means-tested aid will rise to $953 billion, nearly a 50 percent increase in four years.

Means-tested aid is targeted largely at the lowest-income third of the population. If $953 billion in annual spending were divided equally within this group, benefits would average more than $8,000 per person, or $32,000 per year for a family of four.

Obama’s spending increases are not merely temporary responses to the current recession. Most are permanent expansions of the welfare state. According to the long-term spending plans set forth in Obama’s FY2010 budget, combined federal and state spending will not drop significantly after the recession ends.

Since the beginning of the War on Poverty, government has spent $16.7 trillion (in inflation-adjusted 2008 dollars) on means-tested welfare. In comparison, all the military wars in U.S. history have cost a total of $6.4 trillion (also in inflation-adjusted 2008 dollars). 

What has the U.S. gained from this investment? When Lyndon Johnson launched his war, he declared that it would strike “at the causes, not just the consequences of poverty.” He added, “Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.”

In other words, President Johnson was not proposing a massive system of welfare benefits, doled out to an ever larger population of beneficiaries over time. In fact, Johnson declared that the War on Poverty would enable the nation to make “important reductions” in future welfare spending. Johnson’s goal was an increase in self-sufficiency: to create a new generation of individuals capable of supporting themselves.