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America Losing Its 'War on Poverty'

The Obama administration is struggling to maintain its grip on America's long-fought “war on poverty” but may be losing the battle.
By Chana Ya'ar
First Publish: 7/25/2012, 12:01 PM

U.S. President Barack Obama
U.S. President Barack Obama
Flash 90

The Obama administration is struggling to maintain its grip on America's long-fought “war on poverty” but may be losing the battle.

The initiative launched by President Lyndon Johnson in 1964, created the Medicaid and Medicare socialized medicine support programs, in addition to other public assistance projects.

But statistics – and numerous Americans who still live in the U.S. and who have made aliyah in the past couple of years – indicate a tailspin in the economy that shows no signs of stopping.

There have been several rounds of global recession since that time, including what was then a near-record poverty level of 11.1 percent in 1973.  The first “poverty rate” figure, 22.4 percent, was recorded in 1959.

Shmuel, a rabbi in New York, spent more than 20 years in the field of education. A gifted teacher, he told Arutz Sheva in an email exchange that he finally was forced to seek another profession because “volunteering was no longer an option. A family also has to eat.” But his new job – which appeared at first to be an improvement – was little better. Within weeks, he found himself facing the same situation. “At least it gets me out of the house,” he said philosophically. “There's something to be said for that, I guess.

Rachel, a single mother of two in New Jersey, has had similar difficulties. Beginning as vice president of a financial institution, she found that her own company was collapsing. Within months, she was pounding the pavement, searching for a part-time job that would allow her to help build the business back up.

"I found a job within days, of course – but it paid almost nothing. I didn't mind, because at least it was a job; but it doesn't cover the bill, and it eats up more time than I initially agreed to,” she told Arutz Sheva in a phone interview on Wednesday.

Undeterred, she found another job. “This was going to be a better option – but here, too, it was the same story. I was promised one salary and within two weeks, they knocked it down by a third, because they lost a client. Two months later, My salary was cut in half, and I was back to square one.” She is now considering aliyah.

In 2010, the official poverty rate was 15.1 percent. But numerous analysts are saying the next time the official figure is released – just before this year's presidential election – it is likely to be higher.

The United States had trouble picking up the pieces after the global economic crisis that followed the September 11, 2001 attack on America by the Al Qaeda terrorist organization. Although President Barack Obama rode into power on the mantra of "Yes, we can" make a “change,” that promise seemed to materialize only in the form of a further downward spiral.

Last year the American unemployment rate was 8.9 percent, a perceived improvement from the 2010 figure of 9.6 percent. But that figure did not reflect the number of people who simply stopped looking for work, analysts said, since skilled jobs were just not out there. The number of applications for food stamps – another indicator of poverty, instead grew exponentially.

Suburban poverty in 2010 had already reached a record level of 11.8 percent. It is expected to rise when the 2011 figures are released.

"I am a heating and refrigeration engineer," explained Ed H., a technician living in Texas who also spoke by Skype with Arutz Sheva. "I spent literally months searching for work, sending out thousands of resumes, not only here but also in Florida, where I thought the chances might be a little better. There is just nothing out there. And I didn't restrict my search to my occupation -- I am not proud. I looked for work as a teacher, as a janitor, as a bouncer -- you name it. Now I am looking for work on an oil rig. Anything. It will be so hard to leave my kids, but I just don't have any choice. We have to eat."

At present, minimum-wage jobs are what's most available in America, when any job is available at all, and even on that kind of income it is nearly impossible to support a single individual, most people agree. In order to relieve at least some of the stress, the Obama administration temporarily expanded social supports such as food stamps and tax credits.

Paying the Piper - Punish Americans Living Abroad
One other way the administration has attempted to offset the cost has been to attempt to dun taxpayers living outside the country.

This has happened particularly in Israel, where a massive number of American families with children who filed tax returns in the past three years were audited this year, on returns filed for the year 2009 and 2010 -- the first two years of the Obama administration.

The initiative, known as the “Erroneous Refund Credit Project,” is allegedly aimed at catching American taxpayers who fake their IRS tax returns in order to receive refunds on child tax credits that all U.S. citizens are entitled to.

But according to one U.S. official who requested anonymity, there is currently a movement in Congress to rewrite the tax law so as to disallow such credits to Americans who are living abroad. Until that law is passed, the above-mentioned project is being pursued aggressively against Americans living in Israel, the source said.

Three criteria will automatically trigger an audit of tax returns for any American living in Israel, according to the source:
1. no taxes were due on income earned
2. the individual or family would earn a refundable credit according to the return
3. the tax return indicated the citizen was not living in the United States for the fiscal year on the form

The source told Arutz Sheva it appeared likely that Americans living abroad will continue to be audited every year until the law is passed that prevents them from receiving child tax credit refunds.