The welfare state grows

Posted: August 4, 2014 at 3:23 a.m.

For the past 50 years, the government’s annual poverty rate has hardly changed at all. According to the U.S. Census Bureau, 15 percent of Americans still live in poverty, roughly the same rate as in the mid-1960s when the War on Poverty was just starting.

After adjusting for inflation, federal and state welfare spending today is 16 times greater than it was when President Lyndon B. Johnson launched the War on Poverty. If converted into cash, current means-tested spending is five times the amount needed to eliminate all official poverty in the U.S.

How can the government spend so much while poverty remains unchanged? The answer is simple: The Census Bureau’s “poverty” figures are woefully incomplete.

The Census defines a family as poor if its annual “income” falls below specific poverty income thresholds. In counting “income,” the Census includes wages and salaries but excludes nearly all welfare benefits.

The federal government runs over 80 means-tested welfare programs that provide cash, food, housing, medical care and targeted social services for millions of Americans. The government spent $916 billion on these programs in 2012; roughly 100 million Americans received aid from at least one of them, at an average cost of $9,000 per recipient.

Of the $916 billion in means-tested welfare spending in 2012, the Census counted only about 3 percent as “income” for purposes of measuring poverty. In other words, the government’s official poverty measure is not helpful for measuring actual living conditions.

Ironically, self-sufficiency was Johnson’s original goal in launching his War on Poverty. Johnson promised his war would remove the “causes not just the consequences of poverty.” As he put it, “Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.”

Johnson did not intend to put more Americans on the dole. Instead, he explicitly sought to reduce the need for welfare by making lower-income Americans productive and self-sufficient.

By this standard, the War on Poverty has been a catastrophic failure. After spending more than $20 trillion on Johnson’s war, many Americans are less capable of self-support than when the war began.

This lack of progress is, in major part, due to the welfare system itself. Welfare breaks down the habits and norms that lead to self-reliance, especially those of marriage and work. It thereby generates a pattern of increasing intergenerational dependence.

The welfare state is self-perpetuating: By undermining productive social norms, welfare creates a need for even greater assistance in the future.


Robert Rector is a senior research fellow at the Heritage Foundation.