Economy & Budget

Paul Ryan discusses his new anti-poverty proposal

Paul Ryan discusses his new anti-poverty proposal

Rep. Paul Ryan (R-WI) appeared on NBC’s “Meet the Press” on Sunday to discuss his new anti-poverty proposals, after a brief introductory segment in which he discussed the VA scandal, and the border crisis.  Ryan mentioned the absurd abuse of the 2008 William Wilberforce Trafficking Victims Protection Reauthorization Act which has enabled the latter, pointing out that the Wilberforce Act was in no way meant to abolish the southern border or absorb the entire underage population of Central America.  The Obama Administration’s claim that their hands are tied by the Act is ridiculous.

The bulk of the discussion concerned Ryan’s latest budget proposal, entitled “Expanding Opportunity in America,” which some critics have dismissed as an over-reaction to Barack Obama accusing Ryan of practicing “social Darwinism” a few years ago.  The idea of using economic growth as the vehicle for eliminating poverty seems to have been discarded by Ryan, in favor of smarter management of the welfare state.  The Washington Post likes one pillar of Ryan’s plan, but seems oddly convinced that the other won’t work… at least, not without the economic growth that used to be considered key to reducing government dependency in Republican proposals:

Mr. Ryan’s best idea is a substantial expansion of the earned-income tax credit, a wage supplement for low-income workers administered through the tax code. Currently the third-largest federal poverty-fighting program at $59 billion per year, the EITC has a proven track record of lifting families out of poverty and stimulating work effort. But it offers only skimpy assistance to childless adult workers, which Mr. Ryan would remedy by doubling the maximum annual credit for such workers to $1,005 and lowering the eligibility age from 25 to 21. It’s nearly identical to a proposal in President Obama’s 2015 budget that would have cost roughly $60 billion over 10 years.

The other pillar of Mr. Ryan’s plan is less satisfactory. He would not reduce the money Washington currently spends on some 11 anti-poverty programs — the largest of which include food stamps, public housing and cash welfare, known as Temporary Assistance for Needy Families (TANF) — but would fold them into a single block grant, available to states that wish to operate their own consolidated aid programs for the poor. States that took the option would have to meet federal conditions, including a work requirement for recipients, in return for far greater flexibility in how their agencies, public and private, meet the needs of individual clients for housing, drug treatment, training and the like. Mr. Ryan’s model is the series of state-level pilot projects that preceded 1996 welfare reform, which ultimately trimmed caseloads nationwide.

No doubt this could reduce the bureaucracy and complexity associated with administering the government’s myriad aid programs. Whether that necessarily translates into better outcomes for the disadvantaged is a different question. Mr. Ryan argues that the poor do better when grass-roots agencies, public and private, are in charge. Yet rolling food stamps into a single funding stream would seem to forfeit that program’s usefully counter-cyclical feature (that is, it spends more when the economy turns down and less when it recovers). Mr. Ryan has only tentative proposals to address that. Even thornier, though, is the work requirement, which can’t succeed unless jobs are plentiful. It’s one thing to link a single source of aid — TANF — to work, as the welfare reform law did. It’s quite another to make everything depend on it, including food.

Many fiscal conservatives have criticized the Earned Income Tax Credit as a system for dispensing welfare through the tax code, which is manifestly not the purpose of the tax system.  Taxes should be as low, and simple, as possible to fund the government, which will then provide whatever welfare programs the voters deem appropriate, will full transparency and accountability.  When the income tax system is cutting “refund” checks to people with zero net tax liability, it’s grown far beyond its logical and lawful purpose.  Expanding the tax system’s role as a spigot of welfare money will make the system more difficult to reform, and place even more power in the hands of an Internal Revenue Service the American people have been given good reason to distrust.

As for the argument that we must reject Ryan’s block-granting proposals and work requirements – modeled on strategies the Post agrees have brought increased efficiency and reduced abuse – because work requirements are only fair when the economy is booming: that sounds like a self-fulfilling prophecy for perpetual decline and dependency.  The degree to which liberals underestimate the role played by insufficient enthusiasm for work among the unemployed remains astounding, especially after recent years have socked us with one empirical demonstration after another that demand does play a role in a sagging job market.

One other element of Ryan’s proposal that has drawn much critical attention is his idea for “life plans,” described in the budget document as follows:

The goal is to make it easier for low-income families to get the assistance they need and to find work. Right now, families must visit a variety of offices and providers to get aid. Under this proposal, they will work with a single provider for all their needs.

In the envisioned scenario providers would work with families to design a customized life plan to provide a structured roadmap out of poverty. When crafting a life plan, they would include, at a minimum:

  • A contract outlining specific and measurable benchmarks for success
  • A timeline for meeting these benchmarks
  • Sanctions for breaking the terms of the contract
  • Incentives for exceeding the terms of the contract
  • Time limits for remaining on cash assistance

The OG program will also be more responsive to different needs. For example, it makes little sense to provide a household with a consistent stream of SNAP benefits when what the household may need most is reliable transportation to and from work. Giving providers this kind of flexibility will allow them to intervene early on with targeted benefits in cases where short-term assistance can prevent someone from falling into deeper poverty.

States, localities, and service providers should also test the best ways to move people from welfare to work. They should use the additional flexibility to try alternative methods of providing assistance. In exchange for this flexibility, service providers will have to undergo rigorous evaluation to determine what programs are working, and if they prove ineffective, they will no longer be eligible for funding.

This idea has been described as paternalistic, patronizing, or even a form of indentured servitude by Ryan’s critics.  However, one of the big complaints about the general structure of the welfare state is the way it dispenses benefits without any sort of coherent strategy for escaping from dependency, and often without any concrete expectation that the recipient will do so.  For decades, we’ve seen communities ravaged by the effects of handing out benefits without any reciprocal obligations, or significant restrictions on how the money is used.  All too often, the government isn’t even terribly interested in verifying that the beneficiaries are truly eligible for the benefits they receive.

Look at it this way: there are supposed to be restrictions on how food stamp benefits are used, and when the public discovers those restrictions are less robust than they believed – say, when the news breaks that food-stamp cards have been used to withdraw cash from ATMs at strip clubs – there is widespread outrage.  We can all agree that food stamps should be used for necessities, not luxury items.  Ryan’s idea for life plans is a logical and comprehensive evolution from requirements we already accept in principle.

No one’s really in favor of handing out bags of money without any strings attached.  Everyone, including most left-leaning voters, agrees that welfare should be a temporary “safety net” for people while they get back on their feet.  What’s so horrible about providing them with one-stop comprehensive assistance for using all of their welfare benefits to deliver the maximum good to their families, and drawing up a “structured roadmap out of poverty,” instead of getting benefits and half-hearted advice from numerous disconnected agencies?  Why is it so unspeakable to venture that people relying heavily upon multiple welfare programs can almost certainly use such advice, and tend to have above-average difficulty managing their finances and devising effective life plans on their own?  So much of the welfare reform debate seems predicated on the idea that we must never speak frankly about the people who receive government money, or burden them with any concrete obligations.

It takes quite a bit of demagoguery to get from Ryan’s “life plan” proposal to accusing him of plotting large-scale indenture for the poor.  I wonder if the great political weakness of the smart, affable, and earnest Ryan is that he perpetually underestimates how low his opponents on the Left are willing to go, how little credit they’re willing to give him for his good intentions.

“Poverty is a complicated problem, and it needs to be customized,” Ryan said in his Meet the Press appearance.  “We have, basically, a poverty management system with respect to the federal government.  If you want to have a healthy economy, and have real solutions, you have to have a healthy safety net… and that safety net has to work to get people out of poverty.  So my argument here is, let’s not focus on effort, on inputs – how much money we spend.  Let’s focus on outcomes – are we actually getting people out of poverty?”

That’s a sage observation with more depth than the usual sound bite, coming from someone who knows just how complex the problem is… and how much the variables can shift between one community and the next.  Ryan places his finger on the vast ideological gulf between those who believe that the primary objective of the welfare state should be reducing poverty, and those who think its goal should be making poverty more comfortable.  By the former standards, the War on Poverty has been one of the most catastrophic failures in the history of American governance, with an especially sharp hailstorm of failures raining down over the past few years.  Small wonder that the Left doesn’t want this – or any other - Big Government program judged by the number of people who no longer require it.

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