The anti-poverty impact of government benefit programs has decreased since 1979 due to budget cuts during the Reagan Administration and the failure of states to keep benefits up with inflation. Since 1979, 30 percent of the increase in poverty has been among families with children, and half of the increase since 1981 is due to the declining ability of those programs to alleviate family poverty. The analysis focuses on the following three programs: (1) cash benefit programs; (2) food and housing benefits; and (3) social security. Their impact on families with children is discussed. The group hit most severely by the decline in anti-poverty effectiveness has been female-headed families with children. If programs had lifted the same percentage out of poverty as they did in 1979, 281,000 fewer female-headed families would have been poor. (PS)