Office of Economic Opportunity

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OFFICE OF ECONOMIC OPPORTUNITY

OFFICE OF ECONOMIC OPPORTUNITY

(OEO) was created in August 1964 by the Economic Opportunity Act. The OEO was part of President Lyndon B. Johnson's social and economic initiatives known as the "Great Society" and the "War on Poverty." The OEO was placed in the executive office of the Johnson administration and its first director was R. Sargent Shriver, who was involved in drafting the Economic Opportunity Act. He served in that position until 1969. When it was created, the OEO coordinated the Job Corps; Neighbor-hood Youth Corps; work training and study programs; community action agencies including Head Start; adult education; loans for the rural poor and small businesses; work experience programs; and Volunteers in Service to America (VISTA).

Early Years

Although the OEO was placed near the President so he could closely supervise it, the OEO's programs were designed so that they were also subjected to considerable local control. The structure of the OEO and its programs can be traced to the Kennedy administration's Mobilization for Youth program, which was funded by the President's Council as well as by the Ford Foundation and the City of New York. The Mobile Youth Fund organized and coordinated neighborhood councils composed of local officials, service providers, and community members to lower the level of juvenile delinquency. It also enlisted the aid of the school board and city council members. Similar community involvement was the hallmark of OEO programs, which were carried out at the local level by community action agencies.

Community involvement also made the OEO controversial and brought the first political attacks against it. The Economic Opportunity Act required that community action agencies have "maximum feasible participation" in the areas they served. As such, local or state governments, some of which expressed that the federal government had overstepped its boundaries, did not control these agencies. In some major cities, community action agencies were particularly vocal against local officials, who labeled agency members and directors as militants.

These local officials managed to use their political clout in the U.S. Congress to reign in the independence of community action agencies and their directors. As a result, Congress began to redirect funds intended for OEO programs into Congress's own National Emphasis Programs. In 1967, Congress passed the Quie Amendment, which restructured the management of community action agencies. The amendment required that an agency's board of directors select locally elected officials to make up one-third of the board's directors. At least another third of the directors were to be low-income representatives selected by a democratic process, and the balance was to come from the private sector.

Reports of high cost overruns at Job Corps centers and other community action agencies brought further controversy to the OEO. In 1966 and 1967, Congress set spending limits and other restrictions on the Job Corps. In late 1967, Congress passed the Green Amendment, which required that local officials designate community agencies to a particular area. After local officials designated an agency, it could receive funds from the OEO. After months of negotiations, more than 95 percent of the existing agencies were designated. In several large cities, agencies were taken over by the mayor and turned into a public agency.

As originally enacted, the OEO's work programs could be blocked by a state governor's veto. In 1965 the OEO was given the power to override any governor's veto, and the political battle was set to wrest this power from the OEO. In 1967 and 1969, California Senator George Murphy proposed legislation that would enforce a governor's veto on legal aid programs. In 1971, California's governor Ronald Reagan attempted to veto continuation of the California Rural Assistance Program, but his veto was overturned in the courts.

By 1968, there were 1,600 community action agencies covering 2,300 of the nation's 3,300 counties. In that year, the OEO required that many small, single-county agencies merge into larger, multicounty ones, and the overall number of agencies was greatly reduced. By 1969, about 1,000 agencies had been designated under the Green Amendment and recognized by the OEO. Many of these agencies outlasted the OEO.

After the Johnson Administration

The OEO was a product of the Johnson administration, and when Richard M. Nixon became president in 1969, the office's days were numbered. In that same year, R. Sargent Shriver resigned. President Nixon transferred many of the OEO's successful programs to other federal departments such as Labor and Health, Education, and Welfare. During his first term in office, President Nixon continued to have the OEO funded, but he changed its mission. The OEO was just to be the starting ground for new programs, and if they proved to be successful, administration would be turned over to an appropriate federal department.

At the start of his second term in 1973, President Nixon did not request any funds for OEO's Community Action Program division. Congress nevertheless provided these funds. Nixon appointed Howard Philips as director of the OEO and ordered him to dismantle and close the agency, as well as not to send to the community agencies the funds that Congress had allocated. After a series of lawsuits, the Federal District Court in Washington, D.C., ruled that the president could not refuse to spend funds that had been appropriated by Congress. Philips was ordered by the courts to resign because his nomination had not been confirmed by the Senate.

President Gerald Ford finally closed the OEO on 4 January 1975. Supporters of the OEO and its programs, however, reached a compromise with the Ford administration, which replaced the OEO with the Community Services Administration (CSA). All of the OEO's employees were hired by the CSA, which assumed many OEO programs. Other OEO programs, such as Head Start, were transferred to the Department of Health, Education, and Welfare. The Carter administration supported the CSA, but because of pressure from Congress, President Jimmy Carter tightened management control of the CSA and the community action agencies under its aegis.

On 30 September 1981, President Ronald Reagan, who as California's governor had fought the OEO in court, abolished the CSA and the Employment Opportunity Act, which had created the OEO. One thousand CSA employees lost their jobs. Former OEO and CSA programs were transferred to other executive departments. Community action agencies that had been funded by the CSA subsequently received money through Community Services Block Grants.

The legacy of the OEO can be seen in state community action agencies, state economic opportunity offices, and such federal programs as Head Start. Head Start, which is now run by the Department of Health and Human Services, was a key component of President Bill Clinton's social aid programs. Although President George W. Bush's Center for Faith-Based and Community Initiatives was identified with his conservative social policies, its emphasis on community involvement echoes the OEO and its community action programs, which are now regarded as symbolic of 1960s liberalism.