Many social insurance theoreticians argue that the OASDHI program must be sharply modified and substantially improved to make it function more effectively as an antipoverty tool. This study analyzes empirically the antipoverty effects of the OASDHI program. central thrust of the paper is devoted to the proposition that the OASDHI program is a costly and inefficient technique for reducing the remaining hard-core poverty in the United States. desirability of new alternative public income maintenance programs, such as a negative income tax plan, is also analyzed. Although public income maintenance programs in this country are not as comprehensive as those found in many foreign nations, a reasonably well developed welfare state exists, which treats poverty in a variety of ways. Numerous programs are used to attack poverty, including OASDHI, unemployment insurance, public assistance, war on poverty programs, farm programs, and veterans' benefits. Despite these programs and a pronounced trend toward the welfare state, the paradox of the welfare state is as folGeorge E. Rejda, Ph.D., C.L.U., is Professor of Economics at the University of Nebraska. Dr. Rejda is the recipient of three N.A.I.I. awards for papers published in the Journal and serves currently as Communications Co-Editor of the Journal. He has also studied risk and insurance under a Huebner Foundation Fellowship at the University of Pennsylvania. Dr. Rejda has also served as a staff consultant to President's National Advisory Panel on Insurance in RiotAffected Areas. author wishes to thank Wallace Peterson, Chairman, Department of Economics, University of Nebraska; Charles Lamphear, University of Nebraska; Thomas 0. Nitsch, Creighton University; and Donald Strand, Illinois Wesleyan University for their penetrating and critical comments of an earlier draft of this paper. views expressed in this paper, however, are those solely of the author. This paper was presented at the 1969 Annual Meeting of A.R.I.A. lows: despite numerous public income maintenance programs, the programs benefit least the hard-core poor who need the benefits most.' Because of complex regulations, statutory processes, administrative ruling, and stringent eligibility requirements, millions of poor Americans are denied aid and are excluded from the welfare state. Indeed, the Social Security Administration estimates that only 54 percent of the households counted poor in 1965 received payments from any public program 2 Although many households escape poverty because of public transfer payments, millions remain poor despite the payments. Many social insurance scholars argue that increased emphasis must be placed on the OASDHI program to reduce poverty.3 However, the major thrust of this 1 See Alvin H. Hansen, American Economy (New York: McGraw-Hill Book Company, 1957, pp. 38-39 and 149. 2 Mollie Orshansky, The Shape of Poverty in 1966, Social Security Bulletin, Vol. 31, No. 3 (March, 1968), p. 29. 3 See Wilbur J. Cohen, A Ten-Point Program To Abolish Poverty, Social Security Bulletin, Vol. 31, No. 12 (December, 1968), pp. 3-13; Robert M. Ball, Concluding Remarks, in American System of Social Insurance; Its Philosophy, Impact, And Future Development, ed. by William G. Bowen, Frederick H. Harbison,