Child Poverty and Richard Nixon’s Family Security Act

by John Roy Price, author of The Last Liberal Republican: An Insider’s Perspective on Nixon’s Surprising Social Policy

It has taken a brutal pandemic for the country to confront the reality of child poverty in “this land of plenty.” Fifty years ago, a Republican president made this a centerpiece of his social policy. In his first months in office, Nixon set out to eliminate federal tax liability for those earning below the poverty line. Out of concern for the wholly dependent as well as those in low-earning working families, he then proposed reform of what was a “catch-as catch-can” program of Food Stamps.

The centerpiece of his strategy was what we first called the “Family Security System” as we were developing it with Nixon. This became his Family Assistance Plan, announced in August of 1969. “FAP” was a complete retooling of the Aid to Families with Dependent Children. Nixon’s FAP was not only a reform of “welfare”, where its national floor raised help for millions in states whose welfare benefits fell below the states’ own definition of subsistence. But it went beyond “welfare reform.”  It sought a floor under the income of all families with children.

The plan was a “negative income tax.” This meant an income-tested floor of federal payments that would taper off as family income increased. Nixon’s proposal would reach and help the “working poor.” Millions of families struggled to approach the poverty line, even with a parent working full time, where the family was too large, or the wages too little. Nixon would supplement their incomes. The late George Shultz, secretary of Labor under Nixon, was a constant advocate for Nixon including the “working poor.” He did.

An early decision was not to pursue a grant to all parents and children but to focus help on those who most needed it. So, the “capitation grant” or a set amount of money to everyone, without regard to their family’s wealth and other income, was dismissed (to be resurrected in George McGovern’s “demo-grant” proposal of his hapless 1972 campaign against Nixon—an idea McGovern later said he wished he had never heard of). It would have been staggeringly costly, and not concentrated on lifting children and parents out of poverty.

The “negative income tax” had bi-partisan roots. It was advanced by some Kennedy and Johnson economic advisors and by the senior economic advisor to conservative Barry Goldwater’s 1964 campaign, Milton Friedman. Richard Nixon was the first president to set out a universal basic income, out of concern for child poverty, hunger, and the consequent setback for children, whether white or non-white but poor, in a start to their lives to enable them to achieve their potential.

In the course of the debate, Nixon heard arguments about whether people could be trusted with disposable income in cash, or needed to be restricted; whether a floor under and supplement to income would incent them to work or to “lie about.” He wrestled with work requirements, and with the way his plan would fit into existing assistance programs so as not to agitate middle-class concerns about incomes of those receiving federal help exceeding those who were not.

After Nixon’s poverty proposals, some of their progeny were created. The Earned Income Tax Credit was a legacy of his negative income tax and concern about the working poor. So were the Food Stamp programs, now known as SNAP or the Supplemental Nutritional Assistance Program

With the “reforms” of welfare in the 1990s, the Republicans and President Clinton abandoned the specific federal program, the AFDC, that focused on child poverty. They pivoted to priority on work requirements and reducing rolls of public assistance, with the termination of any assistance after a period. Republicans then began a retreat on EITC and on Food Stamps, pushing budget reductions in these anti-poverty programs for the next twenty years. The pandemic has focused a light on just how crucial these programs are to combat poverty among American children. It is gratifying to see renewed recognition of the reality and the drastic human costs—along with later huge public costs—of widespread childhood poverty. It is good to see efforts by such as Senator Romney, hopefully working with other Republicans and with President Biden in collaboration on these issues. To this writer, it comes as a ray of hope that America’s decency, and its policy, once more should seek to lift up these innocents.

John Roy Price is the retired President and CEO of the Federal Home Loan Bank of Pittsburgh. He served as Special Assistant to the President for Urban Affairs from 1969 through 1971.