Mitt Romney revealed a lot about himself when he told CNN’s Soledad O’Brien, “I’m not concerned about the very poor. We have a safety-net there.” Weeks before he had asserted that those safety-net programs have “massive overhead” and that because of the cost of such bureaucracy “very little of the money that’s actually needed by those that really need help, those that can’t care for themselves, actually reaches them.” His claim is false. The fact is that more than 90% of the money allocated to safety-net programs reaches its beneficiaries. Romney’s statements demonstrate that he is oblivious to such socio-economic realities, but at least he brought up poverty and made it an issue. That is something that has not happened up since 1964.
Romney touts his business background and pontificates that he knows how to create jobs. That may sounds good to the Republican base, but Presidents of the United States have nothing to do with job creation. It is not in their Constitutional authority. Presidents do not legislate. They sign legislation into law or veto it. Furthermore, the United States is not a corporation. The last U.S. President who came to office from business was Herbert Hoover, whose administration ushered in the Great Depression, incredible job loss, and excruciating poverty.
Presidents do propose legislation to the Congress, as LBJ did with the Economic Opportunity Act of 1964. That Act established the Office of Economic Opportunity to administer the local application of federal funds targeted against poverty. Modified over the years, the Act’s remaining programs include Head Start and the Job Corps. Johnson proposed that legislation in January of 1964, coerced and cajoled members of Congress to pass it, and signed it into law on August 20, 1964. It created jobs.
In declaring the War on Poverty, President Johnson sought “to help that one-fifth of all American families with incomes too small to even meet their basic needs.” LBJ called for “better schools, and better health, and better homes, and better training, and better job opportunities to help more Americans, especially young Americans, escape from squalor and misery and unemployment rolls where other citizens help to carry them.”
The poverty rate is the percentage of Americans whose income is lower than the federally determined poverty line. It was 17.3% in 1965.
As LBJ put it to Congress, “Very often a lack of jobs and money is not the cause of poverty, but the symptom. The cause may lie deeper in our failure to give our fellow citizens a fair chance to develop their own capacities, in a lack of education and training, in a lack of medical care and housing, in a lack of decent communities in which to live and bring up their children.” The safety-net programs that Mr. Romney does not comprehend came from President Johnson’s Great Society initiative.
Romney, the other GOP candidates, and the Republican Congress gripe about and seek to change one of President Johnson’s greatest legislative achievements, Medicare. It helped to lower poverty rates for the elderly. So did President Franklin D. Roosevelt’s Social Security program, which LBJ enhanced by advocating, pushing for, and signing legislation in 1965 and 1967. But the GOP seeks to repeal LBJ’s Great Society by claiming that its programs are bankrupting the country.
Romney ineloquently brought up poverty with his “very poor” statement, for which he drew massive criticism. He said he misspoke. That may be true, but it reveals an ignorance of the fact that more than 20 million Americans live in a household with income of less than half the federal poverty rate. According to census data for 2010, those “very poor” had an annual income below $11,057 for a family of four. That portion of the US population in the very poor category has almost doubled since 1975 and is the highest it has been in 35 years. Business people rely on data. At the least Romney could have read Business Week and appeared less clueless.
In addition to those one in five Americans that Romney does not care about, the ones who had trouble putting food on the table last year, the unpleasant reality is that nearly
half of all U.S. households are struggling to cover basic expenses like electricity and medical care. Children are the least fortunate victims. As in LBJ’s time in the late ‘20s when he was a Texas school teacher, childhood poverty can have a lifelong effect on a person’s earning potential. The Brookings Institute and First Focus found that by the time children who fell into poverty during a recession grow up to be financially independent adults, their median income is about 30 percent less than that of adults who never experienced poverty as children. That is certainly bad for business.
The poverty issue is not who gets blamed. The issue is what choices do policy makers make to help expand economic activity. Romney and his cohorts are all about austerity, like defunding the safety-net programs for the very poor, the disabled, and seniors. The problem is that austerity in a recession makes things worse, not better. In Europe, which the GOP does not understand, harsh austerity policies have made unemployment soar. Cuts in government spending have failed to reduce budget deficits because tax receipts fell. Economic activity and employment levels collapsed. Poverty increased as spending decreased.
President John F. Kennedy said, “If a free society cannot help the many who are poor, it cannot save the few who are rich.” As one of those few, Romney demonstrates a profound paucity of the economic and social understanding that is requisite of Presidents. Despite the Republican pabulum to the contrary, this is still a country of great abundance that is slowly emerging from the Great Recession. However, the nation suffers from a rise of poverty that it can ill afford. All of the talk about the middle class ignores the plight of the “many who are poor.”
Poverty is bad for business and Romney should know it. His comments deserve derision because they are false, not because they are gaffes. He raised the poverty issue but has articulated no plan for addressing it, without which the country becomes the Not-So Great Society.