Dependency, the “Underclass,” and a
New Welfare “Consensus”: Poverty Knowledge
for a Post-Liberal, Postindustrial Era
DESPITE THE DEBACLE of the Program for Better Jobs and Income, in 1980 the future for poverty research looked secure. Poverty rates were rising, but ana- lysts felt they had better tools than ever to identify the “causes, consequences, and cures.” If the research of the past decade had shown anything, it was that government was a necessary force in the fight against poverty—and that the myth of an intractable culture of poverty could be laid to rest. As an industry poverty research was thriving, even after some enforced belt-tightening during the late Carter years. Federal agency funding was in the hands of trusted re- search brokers, heavily concentrated in the Department of Health and Human Services (formerly HEW) Office of the Assistant Secretary for Planning and Evaluation (ASPE), who were schooled in and appreciated the value of ana- lytic research.1 In 1980, ASPE announced that funding for a national poverty research center would now be open to outside bidders—the Institute for Re- search on Poverty would be asked to compete with others for multi-year core funds. The competition caused no small amount of consternation at the fifteen- year-old Institute; thanks in part to IRP efforts, poverty expertise—and the field of potential institutional challengers—had proliferated since 1965. Still, director Eugene Smolensky had reason to feel assured on at least one point: the IRP would win “if we write the best proposal.” The ASPE leadership, after all, showed “a fine appreciation for academic research.”2
And then, with Ronald Reagan’s election in November, came the “revolu- tion” in social policy that promised to undermine the liberal welfare state, and with it the institutional networks, the federal contract market, and the ideologi- cal underpinnings of poverty research.
The new administration struck its first major blow with OBRA, or the Omni- bus Budget Reconciliation Act of 1981, which slashed federal antipoverty bud- gets and severely restricted eligibility rules to eliminate aid for all but the “truly needy.” Then, in a far more radical version of Nixon’s “new federalism,” the administration sought to devolve, privatize, or altogether eliminate the very government programs that had kept up a continuing demand for poverty re- search. Meanwhile, the huge deficits fueled by Reagan’s defense spending and supply-side economics rapidly transformed the policy debate, crippling the