The Mobility Agenda challenges Krugman's evidence directly.

He implies that the world has changed in part because the debate over welfare reform in the mid-1990s deracialized government spending issues and made it OK for government to spend on assistance to low-wage workers, writing:

If Ronald Reagan and other politicians succeeded, for a time, in convincing voters that government spending was bad, it was by suggesting that bureaucrats were taking away workers’ hard-earned money and giving it to you-know-who: the “strapping young buck” using food stamps to buy T-bone steaks, the welfare queen driving her Cadillac. Take away the racial element, and Americans like government spending just fine.

But why has racial division become so much less important in American politics?

Part of the credit surely goes to Bill Clinton, who ended welfare as we knew it. I’m not saying that the end of Aid to Families With Dependent Children was an unalloyed good thing; it created a great deal of hardship. But the “bums on welfare” played a role in political discourse vastly disproportionate to the actual expense of A.F.D.C., and welfare reform took that issue off the table.

We find exactly the opposite in our review of academic literature on this question. The evidence directly contradicts Krugman’s assertion.

In a report The Mobility Agenda commissioned and released last fall to review public opinion on poverty, welfare, and low-wage work, Matthew Nisbet of American University writes:
    

While core values and psychological orientations play a significant role in structuring American views about poverty, the issue is by no means “race neutral.” In fact, based on analyses of multiple national surveys, the political scientist Martin Gilens…concludes that among whites, the belief that black people are lazy is the most important source of opposition to spending on welfare and to programs that provide direct assistance such as food stamps and unemployment benefits. 

Also:

…news images encourage the belief that the prototypical poor person is black. Specifically, the dominant visuals in TV stories related to poverty were blacks in organized activities like marches, meetings, or church; and blacks milling around streets, frequently pictured with police officers. Moreover, beyond images of race… poverty itself was seldom the direct subject of a news story, with reports rarely focused on low income, hunger, homelessness, low housing quality, unemployment, or welfare dependence.  Instead, the focus was symptoms associated with poverty, particularly racial discrimination and problems of health or health care.

And finally:

By making welfare more “morally demanding,” centrist Democrats hoped to re-instill confidence in the ability of the government to help the poor. Strategists, pundits, and several prominent scholars had predicted that welfare reform would set in motion a powerful policy feedback effect, removing the taint of racism, and opening up the public to support for policies that helped the poor.

Unfortunately, in a systematic analysis comparing multiple indicators of polling data gathered between 1998 and 2004 with data from the late 1980s, [Joe] Soss and [Sanford]Schramm  find no evidence for this impact. The tendency for Americans to blame poverty on a lack of effort has held steady, feelings toward the poor have grown slightly cooler, willingness to aid the poor has stayed the same or diminished, and racial attitudes still color support for assistance to the poor.

Yet, pointing to more recent polling data, influential progressives remain optimistic that the public is finally ready to get behind a campaign against poverty. In particular, a widely talked about analysis by Pew (2007) indicates a roughly 10% shift between 1994 and 2007 in the public’s agreement that the government should take care of people who can’t take care of themselves, guarantee food and shelter for all, and help more needy people even if it means government debt.

However…any comparison to 1994 is misleading, since these polls were taken at the height of the welfare reform campaign. During this period, news attention to welfare soared, with this coverage overwhelmingly negative in its tone. By 1998, however, news attention and negativity had both sharply declined. In reality, absent very salient messages attacking welfare programs, what the 2007 polls reveal is a normalization of public attitudes about poverty to their pre-Clinton era levels, rather than any turning point in public sentiment.
 Sadly, it seems the welfare debate of the mid-1990s reinforced public opinion rather than serving to shift it. By the way, we should expect the same of any debate over a goal to end poverty in the next administration.
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