The problem of poverty in America has been a grave issue throughout the nation's history. In fact, by most measurements, the United States has some of the highest poverty rates in the developed world. According to federal poverty guidelines revised each year by the Department of Health and Human Services, the "poverty line" for an individual is defined as an annual income of $10,400 or less, or $21,200 for a household of four. This federal standard is used to determine eligibility for welfare programs and services such as Head Start, the Food Stamp Program, the National School Lunch Program, the Low-Income Home Energy Assistance Program, and the Children's Health Insurance Program.

In 2005, under a slightly different definition developed for statistical purposes by the U.S. Census Bureau, nearly 37 million people (or 12.7 percent of the population) lived below the poverty line, including 7.9 million families and 12 million children. The figure had increased from 31.6 million (11.3%) in 2000 and 35.9 million (12.5%) in 2003. But in 2006, poverty declined significantly for the first time since 2000, dropping from 12.7% to 12.3%.

American poverty is also a highly racialized problem, with disproportionate percentages of minority groups fitting federal standards of poverty. In 2005, 24.7 percent of black and 21.9 percent of Hispanic populations lived in poverty, compared to the 12-15% poverty rates found in the general population.

The causes of every individual case of poverty are, of course, many and varied. They sometimes include factors for which people are obviously responsible, like a poor work ethic, living beyond their means, and having too many children, and factors for which people are not responsible, like the quality of their public schools, the poverty of their parents, and the unavailability of well-paying jobs. Conservatives tend to emphasize the former, the personal decisions that mire people in poverty and how they might choose to live differently, while liberals emphasize the latter, the structural conditions that influence the feasibility of actually rising out of poverty. Conservatives want to reduce the government's role in alleviating poverty, believing that government programs often foster dependency and that poor people can help themselves or be helped by charities and community groups. Liberals want to expand the government's role in alleviating poverty, believing that government should guarantee the basics of a decent life and provide the tools for people to overcome poverty.

The goal of decreasing unemployment has traditionally been a major component of addressing poverty. In the New Deal era, after the worst years of the Depression had seen as many as one-fifth of Americans out of work, the government established the Works Progress Administration (WPA), which, along with other federal programs, employed as many as 3.3 million Americans in infrastructure renewal projects. Of course, the New Deal never achieved full employment, something that most agree is impossible or highly unappealing. Market-based solutions to unemployment include the giving of tax breaks to businesses that hire new workers, eliminating the minimum wage, and reducing unions' ability to keep wages from falling.

To provide the unemployed with income while they search for work, we have the Unemployment Insurance (UI) system, which is financed through employer payroll taxes. The standard period for which people can receive unemployment benefits is 26 weeks.

In May 2008, having increased steadily from 4.9% in February, the U.S. unemployment rate stood at 5.5%--the highest since October 2004. In May, the number of unemployed persons rose by 861,000 to reach 8.5 million. Total job losses in 2008 have numbered 324,000, with cutbacks especially widespread in construction, manufacturing, retail trade, and temporary help services. Relatively few other areas (health care, for instance) have experienced growth in job availability. However, average hourly earnings for workers in production or nonsupervisory positions has increased by 3.5 percent over the past year.

Since 2006, the United States has been experiencing an ongoing housing trend known to economists as the subprime mortgage crisis. As housing values have fallen, the rates of default and foreclosure have increased dramatically, especially on subprime mortgages (the loans given to borrowers with relatively low incomes and high-risk credit histories). In 2007, 1.3 million American properties experienced foreclosure, 79% more than in 2006. Many families, having taken on mortgages during a time of rising housing prices, have now found themselves unable to pay.

Unsurprisingly, the effects of the crisis have been disproportionately felt in low-income and minority communities. For instance, working-class families who rent rather than own property have frequently been forced from their homes because their landlords defaulted on mortgage payments, nullifying their leases. In addition to a higher number of defaults and foreclosures, minority neighborhoods have also been subject to discriminatory lending practices: in 2005, the Federal Reserve found that 46% of Hispanics and 55% of African-American borrowers (compared with about 17% of whites and Asians) were saddled with higher-cost loans even when they would qualify for lower-cost ones.

The minimum wage was established during the New Deal era and is designed to guarantee that all workers can earn a decent living. It reached its highest purchasing power, adjusted for inflation, in 1968, when it was worth more than $9 in today's dollars. For nearly ten years before the passage of the Fair Minimum Wage Act in July 2007, it had remained at $5.15 an hour. That bill, passed by the new Democratic majority and a number of Republicans, immediately raised the minimum wage to $5.85. It will rise again this month (to $6.55) and once more in July 2009 (to $7.25).

Individual states can make their own minimum wages higher than the federal government's if they want. Currently 32 states have minimum wages higher than the federal one. Many supporters want to index the minimum wage to inflation, so that it will rise annually by small increments, instead of rising only when Congress decides to act on it.

Conservatives maintain that the minimum wage hurts workers by making it more expensive for employers to hire or keep them. Liberals argue that working people should be able to afford the basics with their wages. They worry that after losing the minimum wage we might end up with more people employed, but fewer people employed at wages substantial enough to live on.

Federal government assistance to poor children and their mothers was initiated during the New Deal, in 1935. Until 1997, welfare assistance to poor American children was provided through a program called Aid to Families with Dependent Children (AFDC). The AFDC rolls expanded dramatically between the New Deal and Lyndon Johnson's late '60s "War on Poverty." But the program suffered increased criticism throughout the 80s and 90s, as President Ronald Reagan declared his opposition to "welfare queens," women who allegedly gamed the system and made a living (even a fortune) without ever going to work.

President Clinton, breaking from Democratic orthodoxy, declared his intention to "end welfare as we know it." In 1996, he and the Republican Congress passed a reform bill, the Personal Responsibility and Work Opportunity Act. Welfare was changed from a standard entitlement program, on which people could rely as long as they claimed to be looking for a job, to what's known as a "workfare" or "welfare-to-work" program. Under the Temporary Assistance for Needy Families program, which replaced AFDC, welfare recipients are limited to two consecutive years of benefits, and no more than five years of benefits over a lifetime. Single parents are required to participate in work-related activities (job training included) at least 30 hours a week, and two-parent families must combine for between 35 and 55 weekly hours of work-related activities. The reforms also included the institution of "block grants," by which the federal government allows individual states to decide, with a fair degree of latitude, how to spend their welfare funds. Many states have passed stricter work requirements than the federal government's.

Since the passage of Clinton's welfare reform, the number of welfare recipients has decreased dramatically.

There's historically been a bipartisan consensus that the Earned Income Tax Credit (EITC) is an effective weapon again poverty. EITC provides a tax credit (essentially, more money) for people who work and earn income under certain thresholds: Less than ~$40,000 if you have two children, less than ~$35,000 if you have one child, and less than ~14,500 if you have no children. Sometimes the EITC will actually result in a negative tax burden for poor people, meaning they receive more in credits than they owe in normal income taxes. The EITC has been very effective at reducing poverty: without it, according to the Brookings Institution, the poverty rate would be 25% higher. And the lower federal tax revenue that it entails is offset somewhat by new taxes generated through increased consumer spending and the ensuing job creation, and by reductions in entitlement spending. The EITC is also very effective at targeting low-income workers for aid, as opposed to tax credits that can be claimed by higher earners as well.

Another tax proposal for combating poverty is to double the tax exemption for dependents. The tax exemption for dependents (usually children) is $3,500 for each dependent claimed. This exemption is the same across all income brackets, meaning that it disproportionately affects poor people (for whom $3,500 is a greater part of their income than it is for the wealthy), but affects everybody with dependents to some extent.

The creation of the White House Office of Faith-Based and Community Initiatives was one of President Bush's first acts as president, and one of the signature policies of his "compassionate conservative" philosophy. The goal of the office has been to give religious charities and social organizations more access to federal funding by removing regulations by which, Bush says, secular organizations had been given an upper hand in the competition for government money.

Civil libertarians and church-state separation advocates have criticized the program as violating the First Amendment's prohibition of the establishment of religion, especially because the president permits organizations receiving federal money to discriminate in their hiring practices. Although recipients of federal funds are forbidden from discriminating against those they aid and must clearly separate their religious services from their charitable ones, critics say that these restrictions have not been adequately enforced. A Government Accountability Office report in 2006 indicated that four faith-based organizations receiving government funding had failed to separate, in time and location, their social services from their religious activities.

The program has also been criticized by two of its former leaders, former director John DiIulio and former deputy director David Kuo. Kuo wrote a book accusing President Bush and his political staff of using the program to gain the support of religious organizations in politically competitive districts and to reward political allies. He also claims that the program was ill-funded, and that its funds were exclusively given to Christian organizations.

Sen. Barack Obama says that he will fully fund his own office of faith-based initiatives but won't play politics with federal money and won't allow organizations to discriminate against either their beneficiaries or their potential employees.