In January of 1973, just days after Johnson died of a heart attack, a newly reelected Nixon announced plans to terminate the OEO and eliminate federal funding for the Community Action Program. Philip Sanchez, Nixon’s own OEO director, announced his resignation in response.
Nixon quickly appointed conservative activist Howard Phillips as acting director. Phillips was an outspoken critic of the OEO and CAP, arguing that the War on Poverty was “conceptually flawed” and “based on the wrong notion that the poor should be treated as a class apart,” which he decried as “Marxist.” He immediately issued instructions to local CAAs to begin phasing out and planning for reductions-in-force.
But Nixon’s plan soon ran into legal obstacles. First, the federal employes’ union and the dense network of nearly 1,000 CAAs that had been established since the mid-1960s rose up to fight back. Community action agencies formed coalitions with local labor unions and branches of the American Federation of Government Employees to challenge Phillips’ actions in court. The president of the OEO’s Midwest Region V union, for example, joined with several CAAs to form the Coalition for the War on Poverty, which was one of the initial groups to seek an injunction stopping Phillips from proceeding with his plans.
It was only the first in a flurry of lawsuits against Phillips, directly, and in his capacity as acting director of the OEO, as well as against the administration more broadly.
In April 1973, several of the cases landed in front of District Judge William Jones, a Kennedy appointee. Jones’ decisions ended up dashing the hopes of Nixon and Phillips.
First, he ruled that their attempts to dismantle the OEO were “unauthorized by law, illegal and in excess of statutory authority.” While Nixon had proposed eliminating funds for the OEO and phasing out CAP in a budget proposal to Congress, legislators had never acted on the plan. That meant there was no legal authority to dismantle the OEO or abolish the Community Action Program. Congress had established them by statute in the Economic Opportunity Act, and therefore, only lawmakers—not the president—could reverse course. Judge Jones also found that Phillips had violated the Reorganization Act by failing to submit to Congress the plan required by the law before abolishing a federal agency. Further, he ruled that Phillips had violated the Economic Opportunity Act, which required 30 days’ notice for terminating employees.