Building the Great Society Page 8

  “Community action appealed to me immediately,” Heller later reflected. “The moment I heard about it, it became part of my thinking.” Before leaving Washington, Robert Lampman cautioned his boss to “avoid completely any use of the term ‘inequality’ or the term ‘redistribution of income or wealth.’” His advice was both politically astute and in keeping with the spirit of growth liberalism, which assumed that no radical changes to the fundamental structure of the American economy were necessary to eradicate poverty. Not everyone agreed. When Heller approached some of his cabinet colleagues in late 1963 with the general concept of community action, William Wirtz, the secretary of labor and a longtime friend, was skeptical. “An attack on ignorance, on slums—fine,” he told Heller. “But on poverty? That’s too diffuse.” Wirtz took a simpler view of the problem. The poor, he believed, were poor because they needed money. To make money, they needed jobs, and for a multitude of reasons there were pockets of the country where jobs were not to be had. “Without question,” he implored his colleagues, “the biggest single immediate change which the poverty program could bring about in the lives of most of the poor would be to provide the family head with a regular, decently paid job.” Wilbur Cohen, the assistant secretary of health, education, and welfare and a longtime Washington hand who had helped build the Social Security program in the 1930s, agreed in part. Community action would “not do enough for children, broken families where the women have to support the family, minority groups, and special problem areas like alcoholics, delinquents, and the mentally ill.” What poor people needed was money, not opportunity. Cohen seemed skeptical that even a New Deal–style program of mass public employment would reduce poverty, given how ill-equipped many poor people were to avail themselves of the country’s astounding economic growth.

  Others agreed, including an ad hoc committee of left-wing intellectuals that drew such prominent names as Gunnar Myrdal, a Swedish economist and author of a famous exposé of American race relations; Michael Harrington; Todd Gitlin and Tom Hayden, founders of Students for a Democratic Society; Irving Howe, the founder of Dissent magazine; and Stewart Meacham of the American Friends Service Committee. Committee members endorsed an “incomes policy” that would furnish “every family with an adequate income as a matter of right.” It was the only way, they believed, by which “the quarter of the nation now dispossessed and soon-to-be dispossessed by lack of employment can be brought within the abundant society.”

  But income redistribution was neither politically expedient nor inside the boundaries of contemporary liberal thought. It would be costly—as much as $11 billion annually—and would “leave the roots of poverty untouched and deal only with its symptoms,” Heller believed. As the veteran columnist Walter Lippmann concurred, “A generation ago it would have been taken for granted that a war on poverty meant taking money away from the haves and turning it over to the have nots. . . . But in this generation a revolutionary idea has taken hold. The size of the pie can be increased by intention, by organized fiscal policy and then a whole society, not just one part of it, will grow richer.”

  It was this thinking that informed a memorandum that Heller and Gordon sent the president on December 20. They argued strongly in favor of an antipoverty initiative heavy on “community action” programming and light by comparison on jobs creation. Assuming that the president was able to ram the Kennedy tax cut through Congress, and further assuming that the tax cut would accelerate economic growth—a hypothesis of which Heller, the tax cut’s architect and most committed proponent, was certain—then community action was the key to helping poor people benefit from national wealth. At the start, Johnson was skeptical. His formative experience predisposed him to think of antipoverty measures through the lens of the New Deal: bulldozers and youth camps, large-scale public works programs, jobs initiatives that would secure the instant endorsement of congressmen, governors, and local elected officials. In effect, the president was closer to Wirtz’s point of view than to that of the interagency task force. Days after Christmas, he strolled over to the modest green guesthouse at the LBJ Ranch, where Heller, Gordon, Moyers, and Valenti were huddled around a small kitchen table “littered with papers, coffee cups, and one ashtray brimming over with cigarettes and torn strips of paper.” Mere yards away from the house and visible through the window, several Hereford cows grazed “placidly and a little noisily.” Johnson was amused to see his budget director clad in an oversized khaki shirt and ill-fitting “city trousers.” It was “an incongruous setting for Gordon and Heller, those two urbane scholars. I sat down at the table to talk about the poverty program they were preparing.” LBJ told his advisers that he wanted to see “hard, bedrock content” behind their plan. Also on hand at the ranch was Horace Busby, who had not yet formally joined Johnson’s staff. Instantly skeptical of community action, if not the blanket promise to eradicate so thorny and ever present a problem as poverty, Buzz spent the evening of December 30 clapping out a memo to the president. “There is no workable program yet conceived,” he warned. He counseled broader initiatives that would benefit “the American in the middle” and that, non-coincidentally, would also help many poor citizens. “People know instinctively these are your kind of folks,” he argued. “He pays most of the taxes, carries most of the credit, makes or breaks the consumer goods market, is the home-buyer, car-buyer,” and “his consent is vital—his dissent fatal—to our social progress vis Negro rights.”

  “The politics of the extremes is what the typical American expects you to break away from,” Busby advised. “If you can do so, you can broaden the Democratic party base as it has not been broadened in two decades.” Busby worried that a program specifically tailored to the poor, rather than initiatives designed to lift the floor for all citizens—education, health care for the elderly—would create a political backlash. “America’s real majority is suffering a minority complex of neglect,” he presciently observed. “They have become the real foe of Negro rights, foreign aid, etc., because as much as anything, they feel forgotten, at the second table behind the tightly organized, smaller groups at either end of the U.S. spectrum.”

  Busby’s warning—that liberalism grounded in identity group politics would be the undoing of the Democratic majority—was several years ahead of its time. But his was not the only voice to urge caution. Elizabeth Wickenden, a social worker and reformer whom LBJ had known since his days as Texas state administrator for the NYA, was also unconvinced. She privately told Sorensen that the “problems of poverty are only in limited instances localized in character. They are for the most part widely distributed, related to economic and social factors that operate nationwide, and would require more than local action for solution.”

  Ultimately, the economists prevailed—in no small part, thought Horace Busby, because community action began life as a Kennedy program. LBJ feared that if he rejected it out of hand, the “forces of learning and light” would have declared that LBJ was “just a Southern racist.”

  • • • • •

  Ted Sorensen, who helped draft Johnson’s first State of the Union address, later denied ownership of the term “War on Poverty.” It did not “sound like something President Kennedy would have been comfortable saying, or that I would have been comfortable writing,” he told an interviewer many years after the fact, and in any event so many staff members took a hand in writing the speech—Sorensen, Valenti, and Moyers, among others—that its provenance was lost to history. In fact, JFK first introduced the phrase in 1960 during a campaign speech at Hyde Park, New York, and, in his inaugural address, declared that if “the free society cannot help the many who are poor, it cannot save the few who are rich.” Now, in January 1964, LBJ affirmed that “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.” It was an extraordinary moment in American political history. Until 1964, the term “poverty” had been entirely absent from both the Congressional Record’s index and the Public Papers of the Presidents. Now it was like polio—a scourge that the federal government would marshal great resources to eradicate.

  Two weeks after the president’s State of the Union address, the administration submitted its first economic report to Congress. It found that between thirty-three million and thirty-five million Americans—almost one-fifth of the country—lived at or below the poverty line, which the government pegged at $3,000 in annual income for a family of four. That figure broke down to $800 each year for housing; $5 per week, per individual, for food; and less than $25 per week, per family, for everything else: medical care, school supplies, clothing, transportation, insurance, and household goods. “Obviously,” the report declared, “it does not exaggerate the problem of poverty to regard $3000 as the boundary.”

  Notably, the Council of Economic Advisers cited hard facts and figures that established a positive correlation between both lack of education and discrimination—by which it meant racial discrimination—and income. Though the vast majority of poor families were white, the poverty rate among nonwhites was much higher. Roughly 40 percent of all farm families—and 80 percent of nonwhite farm families—were poor. But more poor people lived in cities. Though only one-quarter of poor families were headed by single mothers, among female-headed households the poverty rate was 50 percent. Buried in these statistics were several land mines that the Johnson administration did not perceive and later tripped. Most of the beneficiaries of the Great Society were white, but because its programs disproportionately aided nonwhites—and because conservative critics associated antipoverty initiatives with civil rights—backlash politicians were easily able to harness racial fears and resentments to scale back LBJ’s legacy. Equally, though patterns of family dissolution had long been in evidence among rural white communities, the administration’s focus on black poverty led many white Americans to assume that the rise of single-parent households and welfare dependency was unique to the black urban ghetto. These political complications lay in the distant future when Johnson launched his assault on poverty. “The poor inhabit a world scarcely recognizable, and rarely recognized, by the majority of fellow Americans,” the CEA reported. “It is a world where Americans are literally concerned with day-to-day survival—a roof over their heads, where the next meal is coming from. It is a world where a minor illness is a major tragedy, where pride and privacy must be sacrificed to get help, where honesty can become a luxury and ambition a myth. Worst of all—the poverty of fathers is visited upon the children.” No presidential administration, with the exception of Franklin Roosevelt’s, had shone so bright a spotlight on economic want, and none had done so in an era of widely shared prosperity.

  Though critics then and later would come to associate the War on Poverty with a narrow scope of initiatives, and particularly with community action, which would soon prove a magnet for controversy, in 1964 LBJ used the term as a wrapper for many of the qualitative measures that in later months he designated the “Great Society.” Some of these measures—like federal aid to primary and secondary education and hospital insurance for the aged—had been part of liberalism’s unfinished agenda since Harry Truman’s tenure as president. (Kennedy tried, but failed, to earn congressional approval of both items.) Others, like food stamps and school nutrition programs, began as small-scale pilot initiatives under JFK’s administration. Still others were altogether new and innovative: community action, early childhood education for disadvantaged youth, a job corps for young men in rural and urban areas, and free legal aid for the poor. What joined these disparate programs into a coherent approach was the underlying assumption that the poor principally needed basic protection against severe hardship and coordinated help in unlocking their fair share of national wealth—not government-guaranteed income. For that reason, Hubert Humphrey, who served as LBJ’s vice president from 1965 through 1969, preferred “a better phrase than the ‘War on Poverty’”—perhaps something along the lines of “an adventure in opportunity” or “an opportunity crusade.”

  As Heller originally pitched the idea to Johnson, the goal was “widening participation in prosperity.” From the vantage point of the early 1960s, it hardly seemed worth the time to wonder what might happen in an age of economic retrenchment and austerity. The first task was maximizing economic output to support the antipoverty initiative: if the logic underpinning the War on Poverty was that all Americans should be equipped with the tools they needed to harvest a share of the growing economy, achieving full capacity and growth was key. Though the United States was a prosperous country, since the “Eisenhower Recession” of 1958 the pace of growth had slowed; GNP was rising at a clip of 2.5 percent annually, rather than a target rate of 3.5 percent, and unemployment stubbornly hovered between 5 percent and 6 percent. Heller convinced JFK, and later LBJ, that the economy was underperforming by $30 billion annually. A tax cut—even one that increased the deficit temporarily—would stimulate growth, close the gap between economic potential and performance, and achieve full employment.

  Ironically, though the measure was born of liberal faith in the ability of experts to grow and manage the economy through the careful application of Keynesian measures, some of its sharpest critics were liberal economists. Leon Keyserling, who served as chairman of the Council of Economic Advisers under Harry Truman, thought that the tax bill constituted a misdirection of Keynesian theory. While he agreed that it would stimulate the economy, he calculated that the wealthiest 12 percent of Americans would reap almost half of its savings, an outcome that was both unjust and unsound, because so small a portion of the population could not consume enough goods and services to stimulate meaningful economic growth. John Kenneth Galbraith argued that tax cuts were the wrong Keynesian lever. If the government threw the budget out of balance through spending, it would stimulate the economy while also making core investments in public-sector infrastructure that would, in turn, generate more opportunity and growth. Tax cuts would merely feed the cycle of conspicuous middle-class consumption. “Needless to say,” he told Kennedy shortly before his death, “the addition of more and better depilatories has nothing to do with national health and vigor.” Michael Harrington, whose work on the hidden scourge of poverty had done so much to inspire the liberal imagination, was more scathing in his assessment. He scored the tax cut as “reactionary Keynesianism.” Rather than cut taxes, the government could simply provide poor people with cash, thus eliminating poverty and priming the economic pump all at once. But such thinking was more in line with prevailing liberal wisdom of the 1930s, not the new consensus of the 1960s.

  Indeed, for a time the tax cut appeared to accomplish what its framers intended. Within weeks of taking office, Johnson used both carrot and stick to bring his first budget in at $97.9 billion—under the $100 billion threshold needed to satisfy Harry Byrd—and in so doing eased the way for Heller’s tax cut. In late February, the president signed into law the Revenue Act of 1964, which sharply reduced individual income tax rates. The results were almost instantaneous. In 1965, GNP exceeded even the CEA’s optimistic forecast by a whopping $9 billion, and the official unemployment rate dropped to 4.1 percent—almost the textbook definition of full employment. “Though I cannot and do not suggest that we now have test-tube evidence of the success of the tax cut,” Heller informed the president, “it is hard to explain the continued strong advance to date—and the budget prospects ahead—except in terms of fresh confidence, the expanded purchasing power, and the new incentives created by the Revenue Act of 1964.” Outside observers were less tentative in their appraisal. “Tax relief, in massive doses, appears to have achieved something like magic,” marveled U.S. News & World Report.

  A critical building block of the Great Society—between 1961 and 1967, federal r
evenue increased from $94 billion to $150 billion, creating the wherewithal to adopt new government programs—the tax cut created more than growth. It fueled a sense of liberal ebullience and invincibility and established the intellectual foundation for the Johnson administration’s domestic program. If government truly could create full employment and power the economy at full capacity, surely it could empower all of its citizens to enjoy access to their share of the pie. Even as LBJ and his aides set about securing the other components of his agenda for 1964—namely, passage of civil rights and antipoverty legislation—they began to debate the core role of government in an age of seemingly boundless, endless, and widely shared prosperity.

  CHAPTER 3

  Second Day

  Serving in Lyndon Johnson’s White House meant working seven days each week—or, fourteen days per week, given the president’s unusual habit of keeping a “two-shift” day. LBJ would awaken each morning around 6:00 or 6:30 and read through a large stack of newspapers. By routine, Jack Valenti would be on hand—joined later in the morning by Walter Jenkins and Bill Moyers—to receive a thick stack of memos from Johnson’s “night reading.” Valenti would thumb through the stack “rapidly, reading some all the way through and only glancing at others.” Sitting upright in bed, still clad in his pajamas, Johnson would begin placing phone calls, barking orders, and considering the day’s calendar. So famous—and often lampooned—was Valenti’s steadfastness that on his forty-third birthday reporters immediately got the joke when LBJ quipped that “he is one day older today and shows it. He was late this morning for the first time. He got in when the sun had been up and had to go pull the curtain with the sun shining in my eyes. He is usually there early.” Busby later observed that his boss “never fully appreciated why people were oftentimes so sour when he woke them up at six with a phone call.” (He was one of the lucky ones. Johnson “rarely called me . . . early in the morning,” he clarified. “He called me at midnight.”)