This paper assesses the effectiveness of means-tested and social insurance programs in the United States. The U.S. benefit system has a major impact on poverty rates, reducing the percentage of the poor in 2004 from 29 to 13.5 percent. The system reduces poverty the most for persons with disabilities and the elderly and least for several groups among the nonelderly and nondisabled. While there are significant behavioral side effects of many programs, their aggregate impact is very small and does not affect the magnitude of the aggregate poverty impact of the system.