Congressman Paul Ryan (R-WI), the Chairman of the House Committee on the Budget, recently spoke at the American Enterprise Institute about strengthening the safety net for disadvantaged and unemployed Americans. Specifically, he reflected on the state of public benefits for the poor and how, through his proposal of an Opportunity Grant pilot program, welfare programs could be greatly improved. The transcript and recorded video can be found here.
The Opportunity Grant would streamline existing sources of federal funding into one program. States could then apply for that funding, and would be eligible for federal assistance so long as the anti-poverty initiatives receiving the support adhered to certain guidelines:
- Tax dollars must be spent on people in need, not infrastructure or other projects.
- If benefits recipients are capable of working, they must do so.
- There is to be a choice available for people to receive help, whether the alternatives are non-profit or for-profit groups (i.e. the state welfare agency must not be the only option that people can turn to).
- The results must be measured by a third party to ensure that progress is being made.
Overall, Congressman Ryan’s theme is to allow the federal government to support state programs, not to supplant their efforts. Since the Great Society programs of the 1960s, many local efforts have become dependent on federal funds, thus becoming defacto federal operations. Congressman Ryan’s proposal is an attempt to address that by making federal welfare funding streams more efficient.
Another proposal from Congressman Ryan is to increase the Earned Income Tax Credit for childless workers. This would be accomplished by lowering the minimum eligibility from 25 to 21 and to double the maximum credit to $1,005. To pay for this reform, he would not raise taxes but instead cut funding for less effective government programs, such as subsidies for renewable energy businesses. His goal is to “stop programs that don’t work and support the programs that do”.
Congressman Ryan also addressed the need to expand access to education. By bringing “more competition to the college cartels” through accreditation reform, the cost of schooling could be reduced as more educational institutions are available.
Criminal justice reform was also discussed at the event, particularly as it related to helping non-violent offenders contribute to the economy. Instead of convicting those individuals for maximum sentences, Congressman Ryan proposed counseling and work programs in order to reduce recidivism and prepare them to enter the workforce.
He concluded by proposing to cut regulatory red tape by requiring that future regulations be approved by Congress. If a regulation disproportionately affects low-income families, then the agency would be required to defend it on record for its actions. In a bid to improve collaboration between government and taxpayers, Congressman Ryan invited anyone to comment on his proposals via an email to ExpandingOpportunity@mail.house.gov.
After the Chairman spoke, there was a roundtable discussion which included Ron Haskins, Stuart Butler, and Bob Woodson. Along with the Congressman, each expert emphasized different aspects of aiding Americans in poverty. Bob Woodson noted that the poor in America face different barriers to economic prosperity. “Both people on the left and the right have myths about the poor,” he said, and categorizing people only as victims does not help individuals overcome challenges posed by poverty. The discussion conveyed the need to collaborate and to focus on solutions that are proven to be successful for lifting Americans out of financial difficulty.
The problem is not just academic. According to the 2012 report by the U.S. Census Bureau, 48.5 million Americans live in poverty, 16 million of whom are children. Though the federal government spent over $1 trillion in 2012 on 80 (oftentimes overlapping) welfare programs, poverty continues to be a major economic issue. Legislators have always proposed reforms but many measures attempt to address the symptoms of poverty, rather than the root causes (education, health, and skills being major factors). On paper, much of what Congressman Ryan presented could help the disadvantaged, but they face significant political obstacles within the halls of Congress and the White House. By decreasing the costs of anti-poverty efforts while lowering the numbers of those actually in poverty, taxpayers and those in poverty both win. The question is whether or not Congress will choose to continue spending money on entrenched programs rather than take further risks on new ones.
Thanks to Ian Johnson for drafting this post.