A guide to Paul Ryan’s anti-poverty plan

By Ben Walsh
July 24, 2014

Like Ronald Reagan, Paul Ryan thinks that we’ve lost the war on poverty. Ryan, the chairman of the House Budget Committee, released a draft anti-poverty plan today. About 45 million Americans are living in poverty — making less than $23,850 for a family of four — and Ryan’s proposal would “shift the federal government’s anti-poverty role largely to one of vetting state programs to distribute aid,” Reuters’ David Lawderreports. Benefits would be distributed by a single agency or charity group, and recipients would be required to set up and follow a contract to receive benefits.

James Pethokoukis pithily scores the approach as “Thomas Aquinas 1, Ayn Rand 0” — more caritas, and less ruthless, laissez faire libertarianism. Josh Barro says the plan is a huge change for Republican policy because it’s not a spending cut. Instead, “as drafted, it would not increase or decrease federal spending on anti-poverty programs.”Reihan Salam describes today’s proposals as “the most ambitious conservative anti-poverty agenda since the mid-1990s,” and argues that Ryan’s main objective is “combatting entrenched poverty” by offering a “a useful distinction between situational poverty, in which individuals fall on hard times” briefly, and “generational poverty.”Research shows more Americans are affected by the former, but Ryan argues policy does not sufficiently address the latter.

Jared Bernstein, a former White House economist, disagrees with Ryan’s assumption that U.S. anti-poverty programs are structurally flawed, arguing that there is nothing “fundamentally wrong with the safety net.” Government programs cut the poverty rate almost in half compared to the pure market outcome, he says. More than that, Bernstein highlights the point made by the Center of Budget and Policy Priorities’Robert Greenstein: the safety net is a great investment in the long-term outcomes of its beneficiaries and should not necessarily be tied to short-term requirements of a contract.

Annie Lowrey says that while “there’s a lot for liberals to like” in the proposal (see,reducing mass incarceration), it’s nonetheless paternalistic. Its central problem, she says, is the manner in which it structures aid as a contract:

This is condescending and wrongheaded. First, it presupposes that the poor somehow want to be poor… Second, it isolates the poor… Third, it threatens to punish the poorest and most unstable families for their poverty and instability… Fourth, it does not address the core problem of a lack of jobs — or the problem of a lack of jobs paying a living wage

Of course, this is just the reaction to a draft proposal of a pilot program. There will be a whole new set of analysis and reaction if Ryan is able to translate his ideas into actual legislation. — Ben Walsh

On to today’s links:

USA! USA!
Half of America’s obese kids don’t know they’re obese - Wonkblog

Charts
The relationship between CEO pay and stock price is pretty much random - Bloomberg Businessweek

Interesting
A history of autocorrect - Wired

China
The Chinese government may lift restrictions on property purchases - WSJ

The More You Know
Hong Kong is the ideal city for a spy - Global Times

Investigations
The tally of financial crisis-related fines - WSJ

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