“A Mission Without Precedent”: The Rise and Fall of the Office of Economic Opportunity, 1964–1981

Abstract

This article traces the history of the Office of Economic Opportunity/Community Services Administration, focusing on Richard Nixon’s failed attempt to dismantle it in 1973 and Ronald Reagan’s successful effort in 1981. I explore main two main questions: Why was Reagan able to succeed when Nixon had failed? and What does the dismantling of the agency reveal about the development of American conservatism in the 1970s and 1980s? Drawing on original archival materials, I argue that the Reagan administration learned from Nixon’s failures and adopted a more professional, managerial stance when it dismantled the agency in 1981. In addition, recent work in history and political science has explored how the multiracial democratic vision articulated by LBJ’s Great Society helped fuel the modern conservative movement. By focusing on the long-term opposition against OEO/CSA, this article provides new insights into how conservatives articulated an alternative ideology to postwar liberalism.

On September 30, 1981, the Reagan administration formally dismantled and shut down the Community Services Administration (CSA), an independent federal agency responsible for administering a range of antipoverty programs through local community action agencies (CAAs). The agency had existed since 1964, when the Economic Opportunity Act established the Office of Economic Opportunity (OEO) within the Executive Office of the President. The OEO’s implementation apparatus bypassed state and local governments and delivered antipoverty funds directly to communities, which allowed Lyndon Johnson’s War on Poverty to tackle both economic and racial inequality. The OEO came under fire almost immediately, spurring criticism from both conservatives and liberals, but the agency had weathered numerous storms throughout the 1960s and 1970s. The OEO was eventually transformed into the CSA in 1974, following Richard Nixon’s failed attempt to abolish it. But Ronald Reagan’s election in 1980 signified the dawn of a new era of conservative governance and opposition to the federal safety net. Reagan sought to slash funding for social welfare programs and reduce the size and scope of the American welfare state. Although many of his boldest retrenchment efforts proved limited or unsuccessful, Reagan accomplished what conservatives before him had failed to do—uprooting one of the key administrative edifices of LBJ’s Great Society.

This article traces the history of the Office of Economic Opportunity/Community Services Administration, focusing particularly on two critical episodes in the agency’s lifespan: Richard Nixon’s failed attempt to dismantle it in 1973 and Ronald Reagan’s successful effort in 1981. I explore two questions in this article: Why was Reagan able to succeed where Nixon had failed? and What does the dismantling of OEO/CSA reveal about the development of American conservatism in the 1970s and 80s? Drawing on original archival materials related to OEO/CSA’s history, I argue that the Reagan administration learned from Nixon’s failures and adopted a more professional, managerial stance when it sought to dismantle the CSA in 1981. Nixon’s attempt to abolish the agency was haphazard and overtly political, whereas Reagan delegated the task to a skilled administrator, Dwight Ink, who understood the importance of good leadership and management.

Tracing OEO/CSA’s history provides insights for the study of policy development and the history of American conservatism. There has been considerable research in political science and public policy on positive policy feedback and the processes that produce institutional resilience over time. ¹ However, there has been less attention paid to how policies unravel or, in OEO/CSA’s case, federal agencies are wholly dismantled. ² This article demonstrates that dismantlement requires skillful administration, not merely ideological zeal. In addition, recent work in history and political science has explored how the multiracial democratic vision articulated by LBJ’s Great Society helped fuel the modern conservative movement. ³ Although Nixon opposed many aspects of LBJ’s Great Society, conservatives in the 1970s had not yet developed an ideological foil to postwar liberal hegemony. By the 1980s, however, conservatives and the Reagan administration had articulated a forceful alternative and were able to take aim at the liberal state erected by the Great Society. The same legislation that terminated CSA converted dozens of social welfare programs into block grants and returned power to state and local governments. ⁴ By focusing on the long-term opposition against OEO, which served as one of the most visible institutional aspects of the Great Society, this article provides new insights into how conservatives articulated an alternative ideology to postwar liberalism. ⁵

This paper proceeds as follows. Section I covers OEO’s establishment and early years under President Johnson, laying out how OEO allowed the administration to directly confront racial and economic injustice. Section II analyzes OEO during the Nixon and Ford administrations, focusing specifically on Nixon’s efforts to terminate the agency in 1973 and its transformation into the CSA in 1974. Section III covers CSA’s dismantlement under President Reagan, identifying the lessons the administration learned from Nixon’s failure to abolish the agency in the 1970s. The conclusion discusses what OEO/CSA’s history and its eventual dismantlement reveals about modern conservatism.

I: THE OFFICE OF ECONOMIC OPPORTUNITY UNDER THE JOHNSON ADMINISTRATION

Although the foundations of a federal poverty program were established during John F. Kennedy’s administration, it was Lyndon Johnson who decided to launch a full-fledged war. ⁶ Walter Heller of the Council of Economic Advisers (CEA) had his first meeting with Johnson just one day after Kennedy was assassinated in Dallas. It is worth quoting Robert Caro’s retelling of this meeting at length, as it illuminates Johnson’s fervor about launching the War on Poverty:

When Heller had first mentioned it [the poverty program] to the new President, the response had a different tone from the one he had received from President Kennedy. The mention, and the response, had occurred during the evening of November 23, as the economist was briefing the new President about economic issues that had been under discussion in the Kennedy Administration. When he told Johnson about the poverty issue, “his reaction immediately was, ‘That’s my kind of program. I’ll find money for it for one way or another. If I have to, I’ll take money away from things to get money for people.” That was the meeting at which, as Heller was leaving, Johnson stopped him, shut the door, and assured him that he was not a “conservative” but “a Roosevelt New Dealer,” and “I should be sure to tell my friends that.” The conversation at the door, Heller was to say, was a little “calculated…a play for support…there he was: Lyndon Johnson, the politician.” There was, Heller felt, no calculation in Lyndon Johnson’s response on poverty. That was “so spontaneous and so immediate…an instinctive and intuitive and uncalculated response.” Heller then asked him “point-blank” how fast he wanted to move ahead on antipoverty. Johnson responded, in Heller’s words, that “we should push ahead full tilt.” ⁷

Johnson’s personal history shaped his attitude toward poverty. It was an issue about which he cared deeply, and he wanted its eradication to define his presidency.

Johnson formed the Task Force on the War Against Poverty in February of 1964, although he had been working with the CEA and the Bureau of the Budget (BOB) throughout the previous two months. LBJ tapped Sargent Shriver to chair the task force, which consisted of academic economists from the CEA and BOB along with individuals from federal agencies including the Departments of Justice, Agriculture, Labor, and Health, Education, and Welfare (HEW). ⁸ The task force believed that the poverty program should use the federal government to bring some consistency and order to the disparate and often disconnected local efforts around the country. The CEA saw the need for new programs, but the group also stressed the importance of reorganizing and coordinating existing institutions designed to combat poverty. A December 20, 1963, memo from the CEA to Ted Sorenson outlined the main features of a new Coordinated Community Action Program. The CEA stated, “We believe that the key element in any realistic attack on poverty would be a proposal which is aimed at specific local areas of poverty; relies on well-organized local initiative, action, and self-help under Federally-approved plans and with Federal support; establishes action programs to evaluate and coordinate existing Federal, State, local and private programs and to test and demonstrate new ones.” ⁹ The groundwork had been laid to launch a coordinated assault on poverty.

In his 1964 State of the Union Address, Lyndon Johnson stated, “This administration today, here and now, declares unconditional war on poverty in America.” ¹⁰ On August 20, Johnson signed the Economic Opportunity Act (EOA), which served as the legislative keystone of the poverty crusade. The act established a bevy of new federal antipoverty programs including Head Start, the Community Action Program (CAP), the Job Corps, and Volunteers in Service to America (VISTA). The Johnson administration grappled with how to properly administer these new programs. Old line federal agencies—namely HEW and the Department of Labor—sought control over the poverty program. Officials within the CEA and the BOB were adamant, however, about the need to create a new agency to direct the War on Poverty. ¹¹ William Capron from BOB argued that if one of the usual suspects within the bureaucracy directed the poverty program, then it was likely to “get gobbled up in the usual bureaucratic crap.” ¹² The BOB and the CEA argued that those agencies often worked in isolation and failed to coordinate programs within the government or across the federal system. The War on Poverty required flexibility to meet the needs of the thousands of communities across the United States. To placate HEW and Labor, the Johnson administration allocated funds to those agencies to run job training and education and programs, whereas the remainder of the War on Poverty would run through a new agency within the Executive Office of the President, the OEO. ¹³

During the debates over the EOA, several members of Congress raised concerns about the concentrated power the OEO director held over antipoverty funds. The EOA gave OEO significant discretion over how to disburse funding. The agency could deliver funds directly to low-income communities, bypassing state and local governments. Republican Robert Taft remarked that the EOA allowed OEO’s “director to do as he pleased…. There’s actually no requirement that the director consult with anyone, other than to find some local agency of some sort, public or private, which would be willing to go along. If he did not have one available, he could create one.” ¹⁴ Shriver recalled conversations with two powerful southern Democrats in the Senate, Richard Russell (GA) and Herman Talmadge (GA), both of whom pressed Shriver to provide governors with veto power over certain programs. The administration ultimately gave in to these demands to secure the bill’s passage. ¹⁵ But the governor’s veto was not frequently used. Robert Perrin, who worked as OEO’s assistant director of government relations recalled, “I think there probably have been less than fifty vetoes out of 30,000 applications of one kind or another. And of those vetoes, probably less than half were overturned, overridden by the director of OEO. So in practice, it has not been a serious break in our ability to proceed.” ¹⁶ From the get-go, it was clear that the new antipoverty agency had the potential to transform the welfare state.

Johnson tapped Sargent Shriver to be OEO’s first director, and he proved to be a powerful force for racial and economic justice. ¹⁷ The new agency provided the Johnson administration with an important administrative tool to address both economic and racial inequality. The Council of Economic Advisers knew that “Future headway against poverty will likewise require attacks on many fronts,” including “a continuing assault on discrimination.” ¹⁸ To ensure that the War on Poverty attacked discrimination directly, Shriver and OEO threatened to withhold federal funds if states and localities failed to comply with the Civil Rights Act. Shriver used his discretionary power over OEO funding to direct money to some of the most economically distressed and segregated regions of the country. ¹⁹ This naturally led to conflicts between the administration and recalcitrant governors, especially in the South. In Louisiana, for example, Shriver withheld poverty funds from the state until Governor John McKeithen withdrew his plans to stack a new state-level OEO office with “political cronies and white supremacists.” ²⁰

The OEO was a stark departure from earlier expansions of the welfare state. As historians and political scientists have demonstrated, although the New Deal dramatically reoriented American social policy, it did not directly challenge the white supremacist political order. ²¹ In contrast, Johnson’s War on Poverty—and the broader Great Society—directly confronted racial injustice. Martha Bailey and Nicolas Duquette’s analysis of OEO funding shows how the Johnson administration circumvented and challenged entrenched local interests. “OEO funds flowed to poor and nonwhite areas,” which empowered and mobilized these marginalized groups. Bailey and Duquette conclude, “OEO’s focus on fighting poverty and racial discrimination—over politics as usual—is consistent with this humanitarian vision.” ²² The OEO thus served as an important weapon in the administration’s efforts to push the US closer to a full, multiracial democracy. This, unsurprisingly, made it the subject of criticism and backlash.

During the 1966 congressional session, Republicans launched a concerted attack to obstruct OEO’s budget appropriations and reauthorization. GOP members of the War on Poverty subcommittee of the House Education and Labor Committee issued weekly “poverty memoranda” highlighting the lack of cooperation between OEO and state governments. These reports charged that the poverty program was poorly managed, fiscally irresponsible, and programmatically ineffective. Republicans criticized the agency for failing to precisely define how community action agencies should implement the Economic Opportunity Act’s “maximum feasible participation” requirement. ²³ During the 89th Congress (1965–1967), Republicans sought to drastically curtail the War on Poverty. They introduced over twenty-five amendments in both chambers that sought to reduce funding, abolish OEO, alter the CAP’s funding arrangement, and spin off programs to other, more well-established departments within the bureaucracy. Although not all these initiatives stuck, they nonetheless demonstrated growing opposition to OEO and the broader poverty program.

Adam Clayton Powell (D-NY), chairman of the House Education and Labor Committee and at one time a firm supporter of the War on Poverty, turned on Sargent Shriver and OEO in 1966. Powell had defended the poverty program in the face of criticism, noting that “Out of the thousands of antipoverty projects in America, there has been a remarkable absence of outright dishonesty and corruption.” ²⁴ By the end of 1966, however, he was engaged in a highly public spat with Shriver. The conflict seemingly stemmed from Shriver’s refusal to act on recommendations Powell made for programmatic changes within CAP and OEO. In a series of communications in August 1966, the two debated the merits of several local antipoverty initiatives. Backtracking on his earlier defense of OEO, Powell argued that Shriver exhibited bias in his decisions to fund programs by delivering resources to CAAs that provide patronage to old-line political elites rather than those that involve the poor in meaningful ways. Powell had previously charged that OEO funds simply filled the pockets of state and local elites. “In far too many communities,” Powell argued, “giant fiestas of political patronage have been encouraged on both the local and State levels of the war on poverty administrative mechanisms, having been seduced by politicians who have used the reservoir of poverty funds to feed their political hacks at the trough of mediocrity.” ²⁵ Shriver rejected such claims in a pointed response to Powell, which highlighted several programmatic successes and identified ways in which the program could be improved in the future. ²⁶

Within a week of these correspondences, Powell called for Shriver’s resignation. In a televised interview on August 29, Powell called Shriver an inadequate administrator; his talents as “the greatest salesman in Washington,” he said, would be better used elsewhere. “The War on Poverty demands a top administrator and Sarge should give up the War on Poverty and the Peace Corps. I think he would make a marvelous Under Secretary of State or something like that.” ²⁷ Shriver defended his tenure as head of OEO and indicated that he had no intention of resigning. He argued that the War on Poverty’s “record speaks for itself. More new programs have been initiated and carried out successfully in less time and with greater efficiency, reaching more people than any other government agency in peacetime history.” ²⁸

Powell sought to further obstruct the antipoverty program by exercising his authority as chair of the House Education and Labor Committee. Congress introduced legislation to continue funding OEO through the next fiscal year in June of 1966. Powell told Shriver that he would not act on any antipoverty legislation until after the November elections, in part because OEO wanted to include a provision that would grant mayors veto power over CAA projects to ameliorate some of the program’s critics. ²⁹ He refused to send OEO amendments to the floor for debate. Powell’s motives throughout the 1966 debates over the War on Poverty’s future are difficult to explain. On one hand, Powell criticized Shriver and OEO for using the CAP to deliver patronage to loyal partisans at the state and local levels. ³⁰ In this view, he decided to hold up the 1966 reauthorization to protect the CAP’s call for maximum feasible participation. Noel Cazenave argues that Powell aligned himself with the more activist wing of OEO and battled with Shriver to showcase issues such as the lack of participation of the poor and tap into civil rights groups’ calls for more robust economic and racial equality. ³¹ But, as one columnist wrote, Powell’s “appraisal cannot be taken at face value because he is a man with many motives.” ³² The 1966 debates occurred at the same time that the House Education and Labor Committee was moving to strip Powell of his chairmanship. He thus may have been using his authority as chairman to exercise his political clout in the face of such a challenge. ³³ Regardless of his motivations, Powell’s actions stalled the EOA’s reauthorization.

The amendments under review included technical changes that sought to adjust and modify administrative aspects of the program and, more importantly, appropriations and funding allocation measures. By refusing to send them to the floor, Powell put OEO and CAP in the awkward position of spending money it did not yet have. The House did not pass the law until the end of September, and the Senate issued amendments on October 4. The two chambers then adopted the new amendments on October 18 (Senate) and 20 (House). The bill was finally signed into law on November 8. ³⁴

Although the 1966 amendments extended the antipoverty program through fiscal year 1970, funding fell far short of OEO’s requests. Shriver had initially requested $3.5 billion, although the Johnson administration asked for a more modest appropriation of $1.75 billion. Congress appropriated only $1.6 billion for poverty initiatives. The new legislation also earmarked poverty funds for specific programs, which broke with previous precedent. Shriver contended that the new legislation would restrict OEO’s “ability to extend the War on Poverty to the poor of urban and rural America.” Congress’ actions signaled growing dissatisfaction with the CAP and local CAAs. Shriver noted, “In fact, because of the combined effects of earmarking and cuts in appropriation, this agency will have $166 million less in earmarked Community Action funds than the minimum expressed in our budget request. And $66 million less than communities actually spent in 1966.” ³⁵ By the end of 1966, Congress had begun scaling back the Community Action Program, limiting program funding, and bringing the program’s objectives more in line with bureaucratic structures and strategies by formalizing resident participation on CAA boards. ³⁶ These changes all had the effect of limiting OEO’s ability to bypass state and local governments.

Things only worsened in 1967. ³⁷ Following a summer of urban strife, opposition to the War on Poverty and the Great Society mounted. Critics argued that the surge in unrest across the nation was linked with liberal reform efforts. Government programs, according to many, did more harm than good by generating unrealistic expectations among marginalized segments of the population. White America grew to believe that the unrest in cities such as Newark and Detroit was a direct result of government’s efforts to mobilize downtrodden citizens. Public opinion polls conducted in the aftermath of the summer’s events showed that 71% of whites believed the uprisings were organized, and 45% believed that outside agitators did the organizing. ³⁸ LBJ’s approval rating dropped to an all-time low of 39% in response to the summer’s disorder. ³⁹

Shriver vehemently defended OEO and community action in response to what he referred to as “cynical attempts to create doubt and fear about the role of the War on Poverty in the aftermath of violence and disorder.” ⁴⁰ He blasted public officials and private citizens who sought to use the summer’s events to foster opposition to the poverty program. Citing official investigations of CAAs’ involvement in the unrest, he argued that allegations of CAA workers causing conflict were

Simply not true…. In almost every one of the 1,050 communities where community action exists, there is ample evidence that the CAA is calming fears and frustrations, bridging the communications gap between the poor and the rest of the community; providing the opportunities to put people to work, giving them training and education; and showing them that health and justice exist for them right where they live. ⁴¹

The conflict, he argued, demonstrated how important the War on Poverty was and signaled the need for sustained efforts to eliminate the underlying causes of discontent. He urged legislators to look past opponents’ baseless criticism and smear tactics. Such warrantless claims, he argued, “Cannot be permitted to stay the hand or weaken the resolve of Congress in passing that legislation most needed to eliminate discontent and eradicate the causes of violence and disorder.” ⁴²

Shriver’s defense fell largely on deaf ears, however. The poverty program’s primary issue, opponents charged, was that local CAAs were independent of the political establishment and thus could serve as a vehicle by which poor residents could challenge the status quo. Critics viewed the 1967 uprisings as a natural outgrowth of the federal government’s direct financing of the antipoverty agencies. Representative Edith Green (D-OR) led the charge to give state and local governments greater control over CAAs. She voiced her discontent with community action during legislative hearings over amendments to the Economic Opportunity Act in August of 1967. She expressed her dissatisfaction with CAP’s funding structure, which did not rely on state and local governments, stating,

I would heartily disapprove of the expenditure of Federal funds to finance people who are outside of government and who would be working for the express purpose of changing the political structure and changing the democratic process and upsetting or overturning the decisions which are made by mayors of duly elected officials or council people or anyone else that has been chosen by the majority of the people through the democratic process. ⁴³

She argued that if CAAs were using federal funds to foment unrest and cause disturbances, then this was antithetical to the original legislation’s design and intent.

On August 9, Senator John D. McClellan (D-AR) contended that despite Shriver’s defense and OEO’s own investigations of the unrest, there was enough indication of involvement of antipoverty workers to warrant more detailed investigations of the summer’s activities. In addition, Senator James Eastland (D-MS), chair of the Senate Judiciary Committee, began hearings on an antiriot bill that the House had passed in the aftermath of the events in Newark. Both the McClellan investigation and the Judiciary Committee’s hearings went on throughout the fall of 1967 and coincided with congressional debates over amendments to the Economic Opportunity Act. This confluence of events—the summer’s unrest, the McClellan investigation, and Judiciary Committee’s antiriot debates—opened a political window that allowed Congress to restrain OEO and bring the War on Poverty more firmly under the authority of state and local governments.

In the fall of 1967, Congress enacted a series of amendments that curtailed OEO’s ability to circumvent local control. Representative Charles Goodell (R-NY) opened October’s mark-up session by declaring that OEO and the CAP had violated federal regulations by allowing CAA and OEO employees to use poverty funds to conduct lobbying efforts. During the mark-up session, Green introduced what would become known as the Green Amendment, which sought to bring CAAs even more firmly under the authority of local governments.

The Green Amendment expanded Albert Quie’s (R-MN) 1966 revision of CAA boards, which codified how CAAs should implement the maximum feasible participation requirement. Quie’s amendment required that poor representatives make up one-third of CAA boards. Under the Green Amendment, the additional two-thirds of the CAA board would be filled by public officials and representatives of business, labor, civic, or charitable groups. The amendment also allowed states to designate a state or local government body as the CAA or, alternatively, to designate a public or nonprofit agency.

Green argued that the amendment would bring CAAs more closely in line with principles of democratic responsiveness. The Green Amendment was a significant victory for those who opposed OEO’s dramatic break from the New Deal model of social policy implementation. That system had allowed Southern segregationists and urban machine politicians to maintain firm grips over the administration of public policy. The 1967 changes to the CAP’s structure, which observers dubbed the “bosses and boll weevil” provision, redeployed earlier administrative structures into the War on Poverty. ⁴⁴

The Green Amendment was the result of a protracted struggle between OEO, the Johnson administration, and moderate and conservative members of Congress. Publicly, the administration criticized the Green Amendment, arguing that it undermined the democratic participatory spirit of the poverty program. Privately, however, the administration understood its importance. Congressional liaison staff from both OEO and the administration gave their support to the amendment, recognizing that the entire program would probably be dismantled without it. ⁴⁵ Although recent research has shown that many poverty warriors’ worst fears—that the amendment would dramatically curtail community action—did not materialize, the amendment nonetheless stripped OEO of some of its administrative power. ⁴⁶

The OEO began as a powerful tool in the Johnson administration’s arsenal to “break the power of the states,” as historian Gary Gerstle put it. ⁴⁷ Shriver was an enthusiastic director who used his discretionary power to ensure that the War on Poverty tackled both economic and racial inequality. He believed in the agency’s mission and thought the War on Poverty could bring about significant change in America. As Donald Baker, OEO’s general counsel noted, Shriver “saw himself as being part of a monumental effort at innovation, of helping to find new ways of charting new routes.” ⁴⁸ But the agency’s innovative powers ran up against increasing frustration with the liberal order. Conservatives were slowly gaining power and creating an alternative to the type of big government programs and central state expansion that characterized Johnson’s domestic agenda. The next section explores how Nixon’s election in 1968 set the stage for even more intense battles over OEO’s authority to wage the War on Poverty.

II: LIBERALISM IN RETREAT: THE OFFICE OF ECONOMIC OPPORTUNITY UNDER NIXON AND FORD

Liberalism had largely dominated politics since the Roosevelt era, but by the end of the Johnson administration, conservativism was ascendant and Richard Nixon’s election in 1968 signaled deep fissures in the liberal order. ⁴⁹ Throughout the 1968 campaign, Nixon pledged to dismantle OEO and shut down local CAAs. When he assumed the presidency, however, Nixon initially tamed his rhetoric toward the War on Poverty. In fact, many of Nixon’s domestic policies expanded the size and scope of the welfare state, leading to frustration among many conservatives. ⁵⁰ But despite some liberal reforms and more tempered rhetoric, Nixon demonstrated hostility toward OEO throughout his presidency.

Nixon appointed a Republican to manage the agency after his election. He chose Donald Rumsfeld, a 36-year-old congressman from Chicago’s north side. Rather than immediately abolishing OEO’s programs, Nixon and Rumsfeld slowly delegated them to other federal agencies. ⁵¹ They sought to transfer Head Start to HEW along with the Comprehensive Health Centers program and Foster Grandparents. The Job Corps was to be shifted to the Department of Labor. Legal Services was transferred to the new Legal Services Corporation and VISTA became part of ACTION, a new federal agency that oversaw volunteer efforts. Community Action would remain within OEO for the time being, but OEO would no longer serve as an administrative agency, Nixon contended, but rather as “an ‘incubator’ for … programs during their initial, experimental phase.” ⁵² To improve the management and administration of CAA programs, Nixon gave the OEO’s Office of Operations supervisory authority over CAP. The objective was to improve CAAs’ relationship with OEO regional offices and foster greater cooperation between the agencies, state OEOs, and state and local governments. Nixon hoped to clarify the agency’s role and free it from administrative duties and, in the process, reduce its role as a federal administrator and restore power to the states.

Beginning in 1971, Nixon ramped up his efforts to dismantle OEO and CAP. Congress sought to include a provision in the Economic Opportunity Act amendments of 1971 that would prevent the president from delegating OEO programs to other agencies and prohibit him from earmarking funding levels for specific programming. Nixon vetoed the amendments, citing Congress’ attempt to prohibit him from delegating programs as a main reason. The following year, Congress introduced new legislation that prevented Nixon from delegating only two OEO programs, Community Action and Community Economic Development. ⁵³ Nixon, seeking to further decentralize OEO, introduced a new $5 billion General Revenue Sharing program as one of the keystones of his New Federalism initiative.

Nixon hoped to use revenue sharing to give states greater discretion over federal funding. The problem with the existing federal approach to social welfare provision, according to the Nixon administration, was that “almost every dollar … has had a thousand strings attached to it.” ⁵⁴ Federal agencies, the administration contended, were only able to justify their rules and regulations by arguing that the agencies themselves were responsible for ensuring that federal dollars are spent appropriately under congressional direction. Nixon and proponents of New Federalism disagreed with this premise and argued that local officials were well equipped to interpret congressional intent without the need for federal agency involvement. Nixon thus sought to give state and local governments greater freedom to spend funds in accordance with local priorities. Federal guidelines failed to take local circumstances into account, and bureaucratic red tape restricted state and local discretion. ⁵⁵

The broad goal of Nixon’s New Federalism was to transfer powers from the federal government back to the states. In a 1969 address to the nation, Nixon argued that the United States, in the aftermath of decades of liberal reform efforts, had “produced a bureaucratic monstrosity, cumbersome, unresponsive, and ineffective…. Nowhere has the failure of government been more tragically apparent than in its efforts to help the poor.” ⁵⁶ The 1971 General Revenue Sharing plan created a new Community Development Block Grant program, which would include money from OEO to be used for the Community Action Program.

In January of 1973, just days after LBJ died of a heart attack while he slept, President Nixon delivered his annual budget message to Congress and announced his plans to terminate OEO and begin the gradual closure of CAAs across the country. State and local governments could choose to maintain CAAs if they used general or special revenue-sharing funds or other sources of funding. ⁵⁷ OEO was on shaky grounds and public support for the agency was “virtually nonexistent.” ⁵⁸ The Nixon administration argued that OEO had run its course. One columnist cited that numerous White House sources believed that

[t]he end appears near for the so-called antipoverty agency … after eight years of stormy and controversial existence, the expenditure of more than $16 billion of taxpayers’ money, and the piling up of one of the most malodorous records in federal history of scandals, corruption, waste, mismanagement and various other abuses. ⁵⁹

The administration believed that OEO’s programs should be turned over to the states. Local CAAs had had enough time to establish themselves and should thus be allowed to continue, not on the federal government’s dime, but only if local governments deemed them necessary. Nixon declared that “The only major OEO program for which termination of federal funding is recommended in my budget is Community Action. New funding for Community Action activities in fiscal year 1974 will be at the discretion of local communities.” ⁶⁰

That same month, Philip Sanchez, who had taken over as OEO’s director in 1972, announced his resignation. Nixon announced that Howard Phillips would serve as acting director of OEO in place of Sanchez. Phillips was an outspoken critic of OEO and community action, arguing that the approach was “conceptually flawed” and “based on the wrong notion that the poor should treated as a class apart,” which he decried as “a Marxist notion.” In his college years, he was a member of the conservative youth activist group Young Americans for Freedom. He argued that the War on Poverty had failed to lift people out of poverty and made them dependent on federal aid. He viewed the OEO’s dismantling as part of Nixon’s “plan to return social decision-making to private citizens and to public officials who are electorally accountable.” ⁶¹ Phillips immediately issued instructions to CAAs to begin phasing out and planning for reductions in force. ⁶²

Nixon and Phillips failed to secure constitutional authority to dismantle the poverty program, however. They also faced staunch opposition from the federal employees’ union and the dense network of CAAs that had developed since the mid-1960s. While OEO and CAP were never very popular in Washington, individual CAAs had carved out unique niches in their communities and had become well entrenched in the social welfare infrastructure by the mid-1970s. They had developed several innovative local initiative programs and many agencies worked closely with state and local governments and other social service agencies and institutions within their communities from the beginning. Community action agencies across the country formed coalitions with local labor unions and branches of the American Federation of Government Employees to challenge Phillips’ actions. ⁶³

The OEO headquarters and each of the agency’s regional offices had a local union, which together formed the National Council of OEO Locals, affiliated with the American Federation of Government Employees. The president of OEO’s Midwest Region V union formed an alliance with several CAAs called the Coalition for the War on Poverty, which was one of the initial groups to seek an injunction against Phillips. In DC, several other parties filed additional suits against Phillips individually and in his capacity as acting director of OEO. Four CAAs from across the country joined forces to bring an additional suit against the administration. ⁶⁴

Judge William Jones, a Kennedy appointee on the DC Circuit, consolidated the cases put forth by CAAs in conjunction with employees’ unions in April of 1973. ⁶⁵ Jones ruled that Nixon and Phillips’ attempts to dismantle OEO were “unauthorized by law, illegal and in excess of statutory authority.” ⁶⁶ Nixon had only proposed his budget, which included the elimination of OEO funds and the phase out of CAP, to Congress. Congress had never acted on his proposal, and thus it could not be used as legal authority to dismantle OEO or abolish the CAP. Judge Jones also found that Phillips had violated the Reorganization Act by failing to submit the required plan to abolish a federal agency. Phillips was also found to be in violation of the Economic Opportunity Act, which required 30 days’ notice for terminating employees. In addition to the suit by CAAs and the employees’ unions, four Senators filed suit in federal court, arguing that Nixon had never properly nominated Phillips for his position and that he had never been confirmed by the Senate. Judge Jones ruled that Phillips was illegally serving as Director of OEO, and thus his actions were null and void. ⁶⁷ Howard Phillips resigned his post shortly after. The New York Times editorialized that the entire affair demonstrated the Nixon’s administration’s “open contempt for Congress and the law. Mr. Phillips is simply doing the bidding of the president…. There has seemed to be complete failure on the part of the President and his associates to understand the true meaning of the rule of law.” ⁶⁸

Nixon’s failure to dismantle OEO stemmed from a series of both legal and political blunders. The president failed to follow the necessary legal actions to appoint Phillips or secure congressional approval for his plans. Nixon also failed to anticipate how his appointment of Phillips, a staunch conservative and critic of OEO and the broader War on Poverty, would generate backlash. Closing an agency with more than 1,000 unionized federal workers who administer grants to nonprofits across the country requires significant legal and administrative skill. Although OEO was not hugely popular among the public, its employees and grantees had a staunch interest in maintaining the agency’s existence. ⁶⁹ Nixon and Phillips’s statements and general hostility toward OEO politicized the agency’s closure, a point that the Reagan administration would address with keen interest. ⁷⁰

Although Judge Jones’ decision halted the immediate dismantling of OEO, he could not stop the president from delegating programs to other agencies. By the end of 1973, only a small handful of programs, including CAP, remained under OEO’s authority. In December of 1974, both the House and the Senate passed the Community Services Act, which replaced OEO with the new CSA. The law authorized the agency and its programs through fiscal year 1978. The effect of the Community Services Act was to reduce the federal government’s role in antipoverty policy and administration. After Nixon resigned in 1974, President Gerald Ford sought to slowly reduce federal funds available to CAAs to encourage those agencies to either diversify their funding or slowly wither away. The decision to replace OEO with the CSA signaled a shift in emphasis of the poverty program. The CSA was designed to be a small operating agency focused primarily on service delivery. OEO’s research and demonstration capacities, which Nixon once cited as the agency’s most important function, had been gradually delegated and dispersed among old-line agencies. Ford continued to delegate programs out of CSA and eliminate others.

The Community Services Act granted President Ford the authority to fold CSA into an existing federal department. But he did not exercise this authority, and CSA remained an independent agency throughout both Ford’s and Carter’s presidencies. ⁷¹ Congress extended the Community Services Act for three years in 1978, and funding for the agency increased during Carter’s term in the White House. In fact, the agency’s budget reached its apex in fiscal year 1980, with an appropriation of over $2 billion, though nearly three-quarters of this stemmed from emergency energy assistance funding to aid low-income Americans during the winter of 1979–1980 in the midst of the OPEC oil embargo. ⁷² Although the agency was weakened, it was not yet dead, and nearly 1,000 federal workers were still employed by CSA when Carter left office. ⁷³

The most significant change at the agency was the slow and gradual process of delegation and decentralization, as conservatives transferred power out of OEO/CSA and away from the federal government to the states. Interestingly, Richard Nixon and Lyndon Johnson used nearly identical language to justify entirely different administrative strategies. Both emphasized the fact that local communities, not the federal government, were in the best position to understand and attack entrenched poverty. Liberals within the Johnson administration argued that the federal government needed to bypass state and local governments and deliver funds directly to CAAs because the existing political and economic structures were too rigid at best and overtly racist at worst. Community action, according to the Johnson administration, provided local communities with the opportunities necessary to develop solutions that they deemed would work best to fit local circumstances. Nixon used the same logic to argue that the federal government should, at best, play a background role in the administration of antipoverty funds. State and local governments understood best how to address poverty, and thus federal funds should be packaged together and delivered to states who then can distribute them at their discretion. Conservatives were coalescing around the idea that control over social welfare policies, which had become increasingly centralized during the Great Society, needed to be pushed back to the states. This was a gradual ideological shift, and it would find a powerful articulator in the next Republican to occupy the White House: Ronald Reagan.

III: “A MISSION WITHOUT PRECEDENT”: THE DISMANTLEMENT OF THE COMMUNITY SERVICES ADMINISTRATION UNDER THE REAGAN ADMINISTRATION

Ronald Reagan’s election in 1980 ushered in a new era of conservative governance in America. ⁷⁴ Unlike the politics of preemption that handcuffed Richard Nixon during his efforts to fully dismantle the War on Poverty, Ronald Reagan was able to fully repudiate the liberal orthodoxy and remake politics wholesale. He was, in Stephen Skowronek’s terms, a reconstructive president; one who sets out “to retrieve from a far distant, even mythic past fundamental values that they claimed had been lost in the indulgences of the received order.” ⁷⁵ Opposition toward government had increased steadily since the late-1950s. ⁷⁶ Declaring that “In the present crisis, government is not the solution to our problems; government is the problem,” ⁷⁷ Reagan sought to cast off the liberal order, shrink government, and retrench the policies enacted under FDR, Truman, JFK, and LBJ.

The CSA’s antipoverty program was the antithesis of Reagan’s agenda in 1980. He viewed the federal government’s expanding role in social welfare policy as a violation of the American ethos. Social programs generated dependency, stifled creativity, and crippled personal responsibility. He believed that such programs were highly inefficient, riddled with waste and corruption, and funneled resources “not to the needy but to the greedy.” ⁷⁸ Although Reagan came to accept the fact that he would not be able to fully dismantle the entire American welfare state, he remained hostile toward programs such as community action that used federal funds to support vague concepts such as community-building and empowerment. ⁷⁹

Congress passed Reagan’s budget plan, the Omnibus Budget Reconciliation Act (OBRA) of 1981 with support from both Republicans and Democrats who balked in response to Reagan’s popularity. The OBRA repealed the Economic Opportunity Act and abolished the CSA and replaced it with the Community Services Block Grant (CSBG) program, which would be housed in the Office of Community Services within the Department of Health and Human Services. ⁸⁰ Although the federal administrative scaffolding that supported community action was dismantled, the legislation provided that 90% of CSBG funds would go to entities that retained the tripartite board structure and other primary elements of the Community Action Program as it had delineated in the EOA and subsequent amendments. ⁸¹

The Reagan administration suggested that the new arrangement would first and foremost return decision-making authority to the states, who were in the best position to manage antipoverty funds. The federal government hindered efficient administration, David Stockman, whom Reagan tapped to head the Office of Management and Budget noted in a statement before the Manpower and Housing Subcommittee. He believed that the block-grant approach would “eliminat[e] the overbearing, paternalistic approach Federal agencies have taken toward State and local governments in the past. We believe that Federal assistance to the States for broad social purposes can meet major needs, but Federal micro-management frustrates State operation and undermines attainment of our public goals.” ⁸² Decentralization would also reduce complexity and paperwork for local agencies, who would now report directly to state governments. Reagan and Stockman presented the program as the culmination of the gradual maturation of antipoverty policy over the past two decades. ⁸³ Dwight Ink, whom Reagan installed as CSA’s director responsible for closing down the agency, noted that

[t]oday, state government is far different than it was 17 years ago. Through reapportionment, through modernization of State administrative and accountability procedures, through revisions in State constitutions, and through as vast increase in State experience with administration of social programs, I believe the States today are prepared to carry forward the national war on poverty and do so efficiently and effectively through the new Community Services Block Grant system. ⁸⁴

The Reagan administration contended that the federal government no longer needed to interfere with the states to provide antipoverty programs and America’s low-income citizens no longer needed a spokesperson in the Washington bureaucracy.

Dwight A. Ink was sworn in as CSA’s tenth director in June of 1981. Although Ink was not an ideologue, he did believe that decentralization would improve coordination and lead to more effective cooperation between federal agencies and state and local governments. His ultimate objective was to place decision-making institutions “as close as possible to those responsible for delivery of services.” ⁸⁵ The CSA, according to Ink, had been marred by inefficient management throughout its existence. Agency staff had long been “handicapped by political leadership that has often been indifferent to, and sometimes intolerant of, good management.” ⁸⁶

Ink had a reputation in Washington as a truly capable public administrator. William Eggers and John O’Leary refer to him as “the model bureaucrat.” ⁸⁷ In an article in the Washington Post, Kathy Sawyer described him as being “as flashy as a filing cabinet, and as shakable.” ⁸⁸ He had a lengthy resume by the time Reagan tapped him to dismantle CSA. He had worked for the Atomic Energy Administration, the Department of Housing and Urban Development, and was most well known for his skillful administration of a massive clean-up and restoration effort in Alaska following a severe earthquake. ⁸⁹ Reagan chose him specifically because of his professional managerial qualifications rather than seeking out a dyed-in-the-wool ideological conservative. ⁹⁰

Although the task to dismantle CSA represented the fulfillment of Reagan’s political ideology, Ink approached the job with the seriousness and managerial acumen of a skillful administrator. He had learned a great deal from Nixon’s failed effort to abolish the poverty agency. Howard Phillips, whom Nixon had tapped to lead his effort to dismantle OEO, tried to bypass Congress and run roughshod over federal employees. ⁹¹ Ink, in contrast, worked closely with important stakeholders in Congress, the bureaucracy, the government employees’ union, and agency employees to implement CSA’s shutdown. He reached out to key members of the Democratic caucus, including Senator Ted Kennedy (D-MA) to “help him conduct the closure in a manner that would cause the least possible pain to those involved in the CSA programs.” ⁹²

Ink undertook several initiatives to ensure that career staff and CSA employees were treated fairly throughout the agency’s closure. He provided an initial briefing to all employees on June 30 when he took his oath of office and personally met with each employee at agency headquarters and announced an open-door policy in his office to solicit employee input. He also published a weekly Director’s News Letter responding to employee questions and concerns. ⁹³ An interdepartmental memo summarized these efforts, highlighting Ink’s and his staff’s outreach to workers, noting that “[a]s a result of these efforts, most CSA employees believed the CSA leadership was doing all it could to soften the impact of the shutdown.” ⁹⁴ One employee commented on Ink’s professionalism throughout the process, stating, “I believe he is a good administrator, a decent individual. But his hands are tied by the administration.” ⁹⁵ Ink’s professionalism smoothed the way for the agency closeout, which meant hundreds of federal employees would be losing their jobs. He established an outplacement service program to provide job placement support and guidance to CSA employees who were seeking new employment in both the public and private sectors. ⁹⁶ These efforts went a long way in easing Ink’s efforts to close out the agency. He recalled that CSA employees “were a hardworking group. There was hardly a person in the agency who agreed with closing it down, and yet we had an excellent relationship.” ⁹⁷

Policy development is not static; it is a dynamic process that unfolds over time. ⁹⁸ Following CSA’s closure, Ink and others at the agency drafted a 65-page report titled “A Mission Without Precedent” that described the CSA’s dismantling. ⁹⁹ The report outlined precisely how the agency effectively closed following the OBRA’s passage on August 13, 1981. CSA terminated its operations just over a month later, on September 30. The report proudly stated, “This mission, one without precedent in the long history of the Federal Government, was accomplished, on schedule and in full.” ¹⁰⁰ “A Mission Without Precedent” demonstrates how policy makers can learn from previous stages of a policy’s development and adapt accordingly.

The report specifically mentioned the importance of not politicizing the process of policy dismantlement. As noted above, many staff at OEO and the national network of CAAs viewed Howard Phillips as a conservative idealogue because of his previous statements about radicalism within the poverty program. The report notes, “Individuals of a combative or personally aggressive nature are ill-suited to direct an agency closure. Many agency career personnel can be expected to oppose the agency’s closure, and if the atmosphere becomes confrontational or highly politicized, internal trench warfare will retard the accomplishment of the task at hand.” ¹⁰¹ This language seems to be pointed directly at Phillips, whom many agency and CAA staff viewed as a hostile opponent of the War on Poverty.

The report also demonstrated that the administration learned from Nixon’s failed attempt to dismantle OEO in 1973 and took steps to ensure that CSA’s closure would occur swiftly and smoothly. Ink immediately began planning for the agency’s termination and transition to the new block-grant program when he became director, but he waited for Congress to finally pass the OBRA to begin implementing close-out procedures. Recalling the 1973 injunction against Nixon and Howard Phillips when their efforts to dismantle OEO failed because the administration lacked legislative authority to terminate the agency, Ink understood that statutory authorization was necessary to ensure dismantlement. He launched a comprehensive coordination effort between CSA, OMB, and Congress to ensure the OBRA’s passage. CSA staff worked with OMB to develop congressional presentations and forged relationships with pertinent House and Senate members and committee leaders:

Given the fact that the dismantlement of CSA was unprecedented and the agency had served a well organized and politically active constituency for 17 years, it was vital that CSA work closely with those House and Senate members and committee staff most interested in or concerned by the agency’s closure. Personal contact was made with such Members and staff by CSA senior officials in early July, and CSA staff was involved throughout the House, Senate and Conference action on the Omnibus Budget Reconciliation Act. ¹⁰²

CSA also worked with the Department of Health and Human Services (HHS), the agency that would eventually be responsible for administering the new block-grant program. CSA staff provided advice and assistance to HHS, and the two agencies jointly reviewed legislation for drafting or technical errors that could have hindered dismantlement. ¹⁰³ Although the unions representing agency staff sued to challenge the legality of Reagan’s reductions in force, Judge Garrett Penn of the DC Circuit (a Carter appointee) ruled that the staff reductions had been in accordance with the Veterans Preference Act, which governed federal reductions in force. ¹⁰⁴

Shifts in the broader political economy also made Reagan’s efforts to shut down CSA easier than Nixon’s. When Nixon tried to dismantle OEO, organized labor mobilized to protect agency employees and the low-income individuals who relied on local CAAs for social support. But by 1980, organized labor, particularly public-sector unions, had undergone significant shifts. Public support for public-sector strikes declined from 1974 to 1978. Economic and fiscal crises throughout the 1970s led many Americans to question the size of government and the necessity of federal bureaucrats. ¹⁰⁵ While Dwight Ink was in the midst of shutting down CSA, Ronald Reagan was in a high-profile standoff with the Professional Air Traffic Controllers Organization (PATCO). Reagan eventually fired more than 11,000 striking air traffic controllers, which reverberated throughout the labor movement. As Joseph A. McCartin points out, “the PATCO strike did not legitimize private sector union busting in the 1980s, it also further weakened the once-aggressively expanding public sector movement.” ¹⁰⁶

The Reagan administration hoped that the closure of the CSA would serve as a blueprint to perpetuate the dismantlement of other federal agencies. The primary lesson that Ink and others in the Reagan administration learned through the CSA’s closure was that retrenchment was possible. The report stated,

[t]he orderly and responsible termination of a Federal agency as complex as CSA was virtually without precedent. It was quite a different matter from dismantling the large, temporary war-time agencies. Many lessons were learned here that can be applied in the future. By far the most important implication of this challenging assignment is that we now know that it is doable. We have long known how to create federal agencies when they were needed. We now know that their existence need not be eternal. ¹⁰⁷

Between the end of World War II and the beginning of the 1980s, the federal bureaucracy had grown exponentially. But fissures in this administrative edifice emerged throughout the 1960s and 70s until they came to a head following Reagan’s election. Through mutually reinforcing processes of decentralization and delegation, policy makers gradually transferred power away from the federal bureaucracy to the states. ¹⁰⁸ Reagan hoped that the CSA’s dismantlement could provide a template to terminate other federal agencies. Although further retrenchment efforts were less successful, the Reagan administration had finally achieved what many opponents of the liberal welfare state had been trying to do since the late-1960s, and that was to turn complete authority of the War on Poverty over to state and local governments. ¹⁰⁹

IV. CONCLUSION: CONSERVATIVE ASCENDANCE AND OPPOSITION TO THE GREAT SOCIETY

When it was established, the OEO represented a marked expansion of the federal government’s authority over social welfare provision. Sargent Shriver, the agency’s inaugural director, could use OEO funds to coerce states to comply with the Civil Rights Act, thus linking the Johnson administration’s antipoverty and racial justice efforts. This was a dramatic break from the New Deal welfare state, which, despite its generosity, posed virtually no challenge to the white supremacist racial order that runs through American government. ¹¹⁰ But, racial inequality has proven painfully durable over the course of American political development, and the Johnson administration’s efforts to push the US toward multiracial democracy did not go unchallenged.

Over the course of the 1960s, 70s, and 80s, the Great Society would come to be the perfect foil for an emergent and increasingly powerful conservative movement. ¹¹¹ As Mary Brennan convincingly argues, the 1960s served as the pivotal decade when conservatives were able to build their constituency at the state and local levels, develop a viable alternative to liberal hegemony, wrest control from the moderate wing of the GOP, and eventually reorient American politics. ¹¹² Although the New Deal has lived on as a symbol of what government can do at its best, the Great Society has languished as a symbol of mismanagement, bureaucratic incompetence, and government overreach. Ronald Reagan quipped that it was not the New Deal he was trying to roll back in his efforts to scale back the welfare state in the 1980s: “I’m trying to undo the Great Society … it was LBJ’s war on poverty that led us to our present mess.” ¹¹³ As “A Mission Without Precedent” notes, “It will be appreciated that, in the minds of many, CSA represented a last vestige of the ‘Great Society,’ and its dismantlement therefore symbolized the end of an era.” ¹¹⁴ The Great Society gave conservatives a clear target to attack as a symbol of the excesses of big government. In a 1999 article in the Washington Monthly, Joseph Califano, Jr., Lyndon Johnson’s top domestic aide, quipped, “If there is a prize for the political scam of the 20th century, it should go to the conservatives for propagating as conventional wisdom that the Great Society programs of the 1960s were a misguided and failed social experiment that wasted taxpayers’ money.” ¹¹⁵

OEO’s history tracks these political developments. Enacted during the high tide of liberalism in 1964, the agency weathered the turbulent 1970s but did not survive Reagan’s election and the dawn of a new era of conservative governance. Reagan’s termination of the agency fit into his broader intergovernmental reform efforts, which returned power and authority back to the states in the forms of block grants and decentralization. ¹¹⁶ LBJ’s Great Society used central state authority to tackle economic, political, and racial inequality, but the post-1980s push to delegate and decentralize has had disastrous consequences for low-income Americans. States now have more leeway to develop punitive social welfare policies that exclude people of color, restrict benefits, and impose significant burdens on recipients. ¹¹⁷ As we continue to wrestle with the unequal distribution of both economic opportunities and benefits and the painful durability of racism in American social policy, perhaps we can look back to the OEO’s early days for a vision of how we might address these challenges.