of all CAA boards. Eighty thousand are employed in CAP programs on a year-round basis with another 80,000 during the summer. Seventy percent of all Headstart programs utilize parents as staff members. (We do not understand GAO's criticism in this regard.) And the poor even comprise the membership of one of OEO's national advisory committees. Four million dollars in grants are currently earmarked for training resident for participation in the Model Cities programs. And through the impetus of the OEO's "new careers" approach, more than 100,000 poor people are now employed in public service capacities, in schools, hospitals, recreation, and conservation programs.

OEO's relationships with public officials, not always smooth, nevertheless have achieved a significant degree of understanding and accommodation. In 1968, when local officials had the opportunity by law to take over the operation of community action agencies, fewer than 2 percent exercised their option to restructure the CAA's in their communities as public agencies.

Many recommendations for improvements in the performance of all OEO programs-CAP, Job Corps, VISTA, and the delegated manpower programs are constructive and appear valid. Within the limitations of available staff and resources OEO has itself recognized its shortcomings and conducted ongoing self-improvement programs to make its efforts more effective and more susceptible to audit, analysis, and evaluation.

OEO believes, however, that GAO's question of whether the Job Corps is "sufficiently achieving the purposes for which it was created" might not be asked if there was a greater understanding of the program's mission and accomplishments. The purpose of the Job Corps is to help the hardest core youth receive the education, training and motivation necessary for employment and constructive citizenship. Considering that the young men and women eligible for the Job Corps have been for much of their lives 100 percent dropouts, the score of 70 percent placed in jobs, school or military service would certainly seem a sufficient achievement.

The GAO report considers the problems of coordination. We certainly agree that the hoped-for degree of coordination among the large number of Federal agencies and programs affecting the poor has not been achieved, nor as the report states, can it "under the existing organizational machinery." The validity of this statement, however, should not obscure the significant advances that have been made in coordination and cooperation. By virtue of its role as an innovator and operator of programs, and as a funding and policy source of programs administered by ther Federal departments, OEO has broken new coordination ground through example and persuasion. Agencies and departments at all levels of government have devoted an increased share of their resources to the poor and have altered their administrative procedures to dovetail with that objective. In many specific instances such as hardcore training and employment programs, neighborhood centers, health centers, and Indian and migrant programs, resources have been combined and strong interagency cooperation has been developed.

Additionally, OEO was the first agency at the Federal level to develop, set up and live by a system of interagency delegation agreements. These agreements have involved such programs as Neighbor

hood Youth Corps (Labor), rural loan program (Agriculture), work experience (HEW), adult basic education (HEW), and economic loans (SBA). And through its "checkpoint" procedure of program signoff, OEO has successfully established cooperation between local officials which otherwise would not have taken place.

None of these efforts has worked perfectly. But a significant start has been made. As a result of its experiences, OEO has long advocated a recommendation in the GAO report for the establishment of a separate high level unit in the Executive Office of the President to handle overall coordination and planning of antipoverty efforts. GAO correctly notes that the Economic Opportunity Council, with which OEO was to "share" coordination responsibilities, has not existed for the past 15 months.

Finally, we would comment on the accelerated speed with which the poor are coming out of poverty. While we have agreed that there is a lack of criteria with which to determine "success," we believe the ultimate criterion is the contribution of the programs to the net decrease in the number of those in poverty.

Since 1964, as GAO mentions, more than 11 million Americans have come out of poverty. While GAO recognizes an "important" contribution from the social programs, it nevertheless attributes the reduction in large part to a healthy and expanding economy. We agree that economic expansion has played a big part in this reduction. However, the rate of economic growth has not accelerated sufficiently to account for the fact that since the inception of OEO, Americans have come out of poverty at a rate 211⁄2 times faster than ever before. It cannot account for the fact that nonwhite Americans are emerging in numbers a thousand percent greater than the average for the years prior to 1964. OEO believes that much of this progress is due to the specific programs it has instituted, the climate of concern it has generated, the additional resources it has called forth, the opportunities it has provided, the influence it has had on other agencies and the mobilization of private individuals and businesses that it has spearheaded.

The foregoing discussion has been, necessarily, a brief comment on a summary. Consequently, it makes no attempt to address itself to many specifics which will be contained in the overall GAO report. We anticipate that questions regarding specific conclusions and recommendations contained elsewhere in the report will be directed to OEO by Members of Congress and others. We will, of course, attempt to respond to any such inquiries as fully and completely as possible.

Meanwhile, OEO will continue its own close study of the recommendations in the report, seeking to respond positively to all those which it finds valid and which are within its power to implement.

Until poverty is eliminated in this Nation-a goal which we believe has been proved obtainable-there can be no letup in dedication or in efforts to perform the task more efficiently and effectively. As long as there is an Office of Economic Opportunity, we will continue to improve our contribution toward that objective.

Chapter 3

THE DIMENSIONS OF POVERTY, THE TOTAL

ANTIPOVERTY EFFORT, AND OEO'S ROLE

Passage of the Economic Opportunity Act in 1964 established the policy of the United States to eliminate the paradox of poverty in the midst of plenty in this Nation. The stated purpose of the act is to strengthen, supplement, and coordinate efforts in the furtherance of that policy.

DIMENSIONS OF POVERTY

Despite shortcomings, the available indicators of the economic dimensions of poverty are useful tools in identifying and serving important parts of the poverty population. The most recent reflection of these dimensions published by the Bureau of the Census and the Social Security Administration relate to the distribution of economic poverty in 1967. The Social Security Administration estimated that 25.9 million persons in this country were in economic poverty in that year.2 Of these, 15.2 million (59 percent) were adults and 10.7 million (41 percent) were children.

Another view is provided by the distribution of poor persons according to the status of the head of the households in which they resided. The most recent published estimate by the Social Security Administration of this breakdown estimates that, of the 25.9 million who were poor in 1967:

5.9 million (23 percent) lived in households headed by persons aged 65 or older.

1.6 million (6 percent) lived in households headed by disabled

persons.

3.7 million (14 percent) lived in households headed by persons who did not work during the year. Of these households, 84 percent were headed by women.

6.5 million (25 percent) lived in households headed by persons who worked only part of the year. Of these households, 38 percent were headed by women.

8.2 million (32 percent) lived in households headed by persons who worked the full year. Of these households, 19 percent were headed by

women.

Yet another view of households in economic poverty is provided by the Bureau of the Census in its "Current Population Reports." These data show that, of the 50 million families in the United States in 1967, over 5 million (10.6 percent) were in poverty.

This was both an absolute and a percentage decrease from 1959,

1 Bureau of the Census: "Current Population Reports," series P-60, May and August 1968; "Social Security Bulletin," vol. 31, No. 12. December 1968.

The Budget of the U.S. Government for fiscal year 1970 (p. 46) projects this aggregate number for 1 year later at 22,000,000 persons.

when, of the 45 million families then in the country, over 8 million (18.4 percent) were in poverty. Of the families in poverty in 1967:

33 percent were headed by females, as against 23 percent 8 years earlier in 1959.

29 percent were headed by nonwhites, as against 25 percent in 1959. 21 percent were headed by persons aged 65 or older, as against 17 percent in 1959.

8 percent were headed by farm residents, as against 17 percent in 1959.

These data indicate that, although there was a decrease in the overall incidence of poverty, those families which remained poor in 1967 were more often headed by females, nonwhite persons, and the aged than was the case in 1959.

Although these data are interesting and valuable in many respects, policy conclusions based on them should be guarded. A principal reason for caution is that the very definition of poverty itself is subject to numerous questions and limitations.

DEFINITION OF POVERTY

It is usual to define poverty in some economic sense-as a lack of purchasing power or as an inadequate level of consumption. The focus of such a definition is on individual members of society. A person's or household's level of income is accepted as a measure of purchasing power and consumption and thus of poverty or affluence. This is the nature of the definitions advanced by the President's Council of Economic Advisors in 1964 and more recently by the Social Security Administration.

Studies made by the Social Security Administration since 1964 are the source of what is commonly called the "poverty line." This line is about $2,200 for a farm family of four and about $3,200 for a non farm family of four and is increased by a specified amount for each additional dependent. These criteria are the basis for the operational definition of poverty employed by OEO in establishing eligibility for the services under some of its programs. Similar criteria have been used by other Federal agencies and in legislation as the basis for determining who should receive the benefits of programs to aid the disadvantaged.

The poverty line measure of individual need has been frequently challenged by sociologists and economists both in Federal agencies and in universities. It is challenged as a valid measure of individual need by those who developed the statistics on which it is based. Some important reasons why it is challenged are as follows:

1. It is based on a rather arbitrary multiple of food costs for families of different sizes. It is therefore not sensitive to changes in the prices of various necessities, including clothing and transportation. Nor does it clearly provide an equitable treatment of farm and nonfarm people, whose food costs are estimated to be different.

2. It is not adjusted for either regional price differences or regional mixes of consumption. Perhaps worse, for this purpose, the statistics have not been adequate to study differences in costs of necessities between ghetto slums and other neighborhoods.

3. Adjustments in the poverty line for different numbers of dependents are arbitrary. The statistics do not show how costs, other than for food, actually vary with family size.

4. Annual income is a very rough measure of the economic circumstances of any particular household. Other assets are available to some. On the other hand, some families are plagued by chronic problems, such as poor health, which absorb substantial amounts and leave a residue which for some is at or below any arbitrary income line.

5. A purely economic definition or indicator of individual poverty is likely to oversimplify multidimensional aspects of the problem. Social, psychological, medical, legal, educational, or political difficulties may also be involved. The focus on the economic position of an individual or household fails to embrace these other aspects of poverty. OEO has generally applied income tests for eligibility to receive services under those programs which provide specific services to individuals and families as distinguished from those programs which provide community services or which are of a low-unit cost, nonenrollment type. Examples of programs providing specific services to individuals are education and work experience programs. The neighborhood centers operated by community action agencies represent an example of a community service program.

In chapters 4 through 8 of this report we discuss the results of our tests in various programs as to the extent to which individuals or families who did not meet the income eligibility requirements were provided services in the programs. We also comment in chapter 4 on the need to include income as one of the eligibility requirements for certain programs for which such a requirement has not been prescribed by OEO.

Additional research is greatly needed to define more specifically who the poor are, i.e., who should be helped.

SIZE AND SCOPE OF THE ANTIPOVERTY EFFORT

Total Federal payments or other assistance to the poor has grown from $9.8 billion in fiscal year 1961 to $22.1 billion in 1968 and to an estimated $24.4 billion in 1969. The budget for 1970 recommends a total of $27.2 billion.

A relatively small part of this increase was a consequence of the passage of the Economic Opportunity Act of 1964. Part of the increase was the result of the passage of new legislation during the period: for example, the Area Redevelopment Act of 1961, the Manpower Development and Training Act of 1962, the Vocational Education Act of 1963, and the Elementary and Secondary Education Act of 1965. The bulk of this increase represented the expansion of long-standing antipoverty efforts, such as the public assistance program and the old-age and survivors insurance program.

The OEO relation to the total antipoverty effort, viewed simply in monetary terms, is illustrated in the following tables.

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