Paul Ryan’s New Poverty Plan Focuses on Opportunity, but Comes up Short

Tuesday, July 29, 2014 at 4:09 PM by
Federal anti-poverty programs come under a magnifying glass in Ryan's new proposal

Federal anti-poverty programs come under a magnifying glass in Ryan’s new proposal

Paul Ryan has a released a new poverty plan that advocates consolidating federal safety net programs and turning the money over to the states. It’s always worth taking a look at changes that could make anti-poverty program more effective, but Ryan’s approach would decrease opportunity for individuals living in poverty, not increase it.

Ryan frames his new proposal as aimed at giving low-income people the tools they need to make ends meet and lift themselves out of poverty. According to his proposal, Expanding Opportunity in America:

“A key tenet of the American Dream is that where you start off shouldn’t determine where you end up. If you work hard and play by the rules, you should get ahead. But the fact is, far too many people are stuck on the lower rungs…There are many factors beyond public policy that affect upward mobility. But public policy is still a factor, and government has a role to play in providing a safety net and expanding opportunity for all.”

Ryan believes that a fundamental redesign of how federal anti-poverty programs deliver services can help expand opportunity across the board. He calls for combining the resources for 11 different federal low-income programs into a single block grant, called the “Opportunity Grant,” which would be given to states to use in anti-poverty efforts.

Ryan’s plan also calls for:

  • Requiring states to implement work requirements and limits on the duration that individuals could receive assistance;
  • Revising federal mandatory sentencing guidelines so as to reduce prison time for non-violent low-level offenders and make it easier for them to re-integrate into their communities; and
  •  Improving the federal Earned Income Tax Credit for childless workers by expanding eligibility and increasing credit amounts.

It may be faint praise, but at least Ryan’s new proposal isn’t as extreme as his budget proposals in 2012 and 2013, which called for big tax cuts for the wealthy and changes that would result in deep cuts for assistance for the most vulnerable (“Paul Ryan Dusts off and Re-Introduces the Budget He Campaigned on,” March 12, 2013). Ryan’s new anti-poverty proposal would maintain the same level of overall anti-poverty funding for each state (in theory anyway – see more on that below), which represents a divergence from his previous approach. And some of Ryan’s proposals deserve a second look, especially his ideas about reforming sentencing and beefing up the EITC.

But despite a few bright spots, Ryan’s approach to anti-poverty programs would likely increase hardship, not increase it. That’s because block grants, by design, are a poor choice to deliver anti-poverty funding. Reasons why include:

  • Policymakers can’t quickly adjust block grant amounts to respond to changing economic circumstances. Under Ryan’s proposal, the SNAP program, also known as food stamps, would change from “from an entitlement that responds automatically to increased need into part of a sweeping block grant that gives each state fixed funding for the year and, thus, cannot respond in the same way,” according to the Center on Budget and Policy Priorities.
  • Block grants are susceptible to cuts. “History shows that block grants that consolidate a number of programs or may be used for a wide array of purposes typically shrink — often very substantially — over time,” according to CBPP.
  • New work requirements would add administrative costs. And since SNAP makes up the biggest share of federal anti-poverty funding, combining programs into a single block grant would mean that states might have to reduce SNAP benefits to cover those additional administrative costs.

Ryan’s proposal to expand the EITC is praiseworthy, but the expansion depends on cuts to other low-income programs to offset the costs. Ryan’s plan would pay for the EITC increase by cutting the Child Tax Credit, eliminating “a flexible funding source that helps states meet the specialized needs of their most vulnerable populations,” and ending a program that provides fresh fruits and vegetables primarily to children in schools in low-income areas, among other cuts. That’s not a successful pathway to reducing poverty.

We need to continue to talk about how to improve anti-poverty efforts. But the changes recommended by Ryan would make it harder to respond to rising needs and would do little to expand opportunity. 

Tamarine Cornelius

Categories: Blog, ECONOMIC SECURITY, FEDERAL BUDGET & TAXES, food stamps, refundable tax credits | Comments Off on Paul Ryan’s New Poverty Plan Focuses on Opportunity, but Comes up Short

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