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The Cold War
The assasination of John F. Kennedy on November 22, 1963, in Dallas, Texas, swept the nation into a paroxysm of grief. It also swept Lyndon Johnson into the White House, where he seized upon the nation's grief to enact legislation begun by the late president. These included a Higher Education Facilities Act, a tax reduction measure to fire up the economy, and, perhaps most important of all, the Civil Rights Act of 1964 .
A year before his death, President Kennedy had asked his aides to look into the problem of poverty in America. A book by sociologist Michael Harrington, The Other America (1962), had shown that millions of Americans, despite overall national affluence, were still living in poverty. Many of these lived in the inner cities or in isolated areas of the South, such as the Mississippi delta of in the hills of Kentucky and West Virginia. After Kennedy's death, LBJ picked up on the idea and expanded it. In a special address to Congress delivered in March 1964, he called upon Congress to declarre "an unconditional war on poverty." He gave this war on poverty a name when, in a commencement speech delivered on May 22, 1964, at the University of Michigan, he challenged Americans to build a "great society" where material abundance would provide the basis for "a richer life in mind and spirit." Such a society demanded "an end to poverty and racial injsutice." It also demanded not just more but better. Thus, Johnson's war on poverty acquired the name "The Great Society."
In addition to the Civil Rights Act of 1964, which addressed racial inequality, Congress approved the establishment of the Office of Economic Opportunity (OEO) in August 1964. With an initial budget of $800 million, OEO initially planned and administered a wide range of programs: Head Start, to give ghetto children an educational leg up; job training for the poor; a domestic peace corps (VISTA); a neighborhood youth corps to occupy inner city youths in useful activities; and a series of "community action programs" (CAPs) to nurture initiative and competence among the poor.
In addition to these programs administered through OEO, Johnson proposed a number of other initiatives. Under his guidance, Congress also enacted the Wilderness Preservation Act to sequester nine million acres of public land for unexploitable reserve, and the Urban Mass Transportation Act to help build and improve inner city public transportation systems.
Following the election of 1964 , Johnson continued to push the Great Society full steam ahead. The next two years were among the most legislativly productive in American history. With his sweeping victory over Goldwater, Johnson claimed a "mandate," a "consensus" for change that he quickly converted into a tidal wave of reform.
The first administrative successes came with the passage of the federal aid to eductaion bill (The Elementary and Secondary School Act) and the Medicare Act established a system of free medical care for persons over age 65 under the Social Security system. Medicare did not provide the full health coverage for all Americans that liberals had urged since the New Deal, but it was an important installment. In August 1965, Congress passed an Omnibus Housing Act that provided rent subsbidies for low-income families, and in September it established a new cabinet-level Department of Housing and Urban Development, and a National Foundation of Arts and the Humanities to encourage music, art, theater and humanistic disciplines. In October, Congress passed a Water Quality Act and an Air Quality Act mandating higher standards for the nation's waters and imposing automobile exhaust controls. That same month came the Higher Education Act providing the first federal scholarships for college students. Other measures of that remarkable eight-ninth Congress included the creation of a teacher corps, subsidies for mental health facilities, aid to urban mass transit, and new consumer protection legislation.
Johnson was even able to get another installment of civil rights legislation, The Voting Rights Act of 1965 , which forbade literacy tests as a requirement for voter regsitration, and allowed the federal government to supervise voter registration where there was clear evidence that the local authorities were preventing minorities from registering.
Johnson owed a lot of his success to his legislative skill, as well as to lopsided majorities in both houses of Congress. But there was another crucial factor: the nation was prosperous as never before. The tax cut passed in his first months in office, which had benefitted the middle class disproportionately, was largely responsible. By 1964 the Gross National Product (GNP) had risen by 6.3%; in the next year, the growth rate rose even faster. In short, growth rates per capita for the 1960s would exceed those for any period during the 20th century. At the same time, in the peak years of the Great Society, inflation was low--under 2% in 1965 for all consumer prices. Americans felt prosperous and generous. The country could surely afford to allocate some slices of an ever-expanding pie to people who were less fortunate.
Results
Did the anti-poverty programs of the Great Society work?Overall government funding devoted to the poor increased greatly. Between 1965 and 1968 expenditures targeted at the poor doubled, from $6 billion to $12 billion—and then doubled again to $24.5 billion by 1974. The billions of dollars spent to aid the poor did have effective results, especially in job training and job placement programs. Partly as a result of these initiatives (and also due to a booming economy), the rate of poverty in America declined significantly during the Johnson years. Millions of Americans raised themselves above the "poverty line," and the percentage under it declined from 20 to 12 percent between 1964 and 1974. Nevertheless, the controversy surrounding the War on Poverty hurt the Democrats, contributing to their defeat in 1968.
Why was the Great Society conroversial? Undeniably, some of the programs were also pork barrels, but with a twist: instead of the money going to traditional Democratic politcians and machines, much of the money went to ghetto activists with militant goals and advisers with left-liberal social agendas. City mayors, many of them good Democrats, often objected to local people, especially militants, having direct access to federal money and thereby bypassing them. These mayors carried their objections to the president and vice president. The media, meanwhile, gave generous attention to every excess of the Community Action Programs, thus raising public doubts about their efficacy.
Other factors contributing to negative views of the Great Society included the breakdown of the civil rights movement and the rise of inflation, which eroded the prosperity of middle-class Americans. With the rise of black power, riots in the cities, and a shrinking economy, Americans in the latter years of the Great Society no longer felt as generous as they had in 1964. Finally, the congressional balances in Congress shifted, hurting the Democrats' ability to pass new legislation.
Inflation and a Tax Rise
By 1966, the Republicans had recovered from their loss in 1964 and regained many seats in Congress, cutting into LBJ's lopsided liberal majority. Further reform might have been possible, nevertheless, if the economy had not begun to falter. By 1967 the remarkable price stability of the previous decade came to an end. The following year the consumer price index (the amount consumers paid for goods) rose by almost 5%. Foreigners also began cashing in dollars for gold (this meant they weren't investing it into productive growth sectors), leading LBJ to announce restrictions on American investments abroad. By March, there was near panic in the world's gold exchanges. [Note: When inflation rises, it means less return on investments in stocks. At these times, many cash in their stocks and buy gold, this leading to a rise in gold prices.]
The basic problems were the federal deficit and Johnson's reluctance to tax the American people to pay for the Vietnam War because he feared it would make the war even more unpopular. Finally in late 1967 he was forced to acknowledge the gap between federal income and outgo, and asked for a 10% surcharge on federal income taxes.
This was a major defeat for the Great Society. Wilbur Mills, head of the powerful House Ways and Means Committee, refused to sanction the tax increase without a cut back on social programs. To stop inflation Johnson would have to abandon his reform agenda. In mid-1968, Johnson finally got his tax increase, but he paid a price. He promised Mills he would trim the federal budget. LBJ would continue to urge new social legislation to help the country's poor, but he recognized he could no longer get enough money to end poverty.
Instructor's Note
Sources:
Irwin and Debi Unger, Postwar America: The United States Since 1945 (New York, 1990).
Medicare: History and the Current Debate
Medicaid
The Great Society Holds Promise for America
The War on Poverty President
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Vietnam (III)