President Reagan was a firm believer in this methodology and almost immediately set to work on dismantling government entitlement programs when he signed the Omnibus Budget Reconciliation Act (OBRA). OBRA served to cut federal funding programs for the poor as well as inducements for states to provide funding. Unfortunately, cutting funding for programs was not enough to revolutionize the welfare programs in the way that conservative ideologues desired. In order to completely undermine the progressive system of entitlements to the poor, the Reagan administration began to use tax reform as a method of undercutting welfare.
By cutting taxes and instituting such concepts as the Earned Income Credit, Reagan gave the appearance of helping poor families, but the tax cut gains hardly made up for the loss in benefits the poor no longer received because of cuts and changes to entitlement programs. Throughout the Reagan presidency, cuts and rollbacks to welfare programs were systematically enacted even as the income gap between the richest and poorest Americans reached peak proportions. While the wealthy were benefiting from tax cuts, the poor were actually losing ground because of them. ...Show more