Paul Ryan’s State-Based Poverty Plan Could Assure “Two Americas”
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The Fiscal Times
July 24, 2014

The central anti-poverty proposal released by Rep. Paul Ryan (R-WI) this morning was an odd mix of traditional conservative Republican ideas joined with what can only be described as a “big government” proposal to closely monitor the lives of the poor as they try to progress up the socioeconomic ladder. 

Ryan presented his 76-page “discussion draft” entitled “Expanding Opportunity in America” at the American Enterprise Institute. The House Budget Committee chairman touched on various issues that related to poverty, including education reform, criminal justice reform, the Earned Income Tax Credit, and more. But the headline proposal is a pilot project for what Ryan calls “Opportunity Grants.” 

Related: Paul Ryan Ventures Again into the Poverty Policy Minefield 

In essence, the Opportunity Grant itself is an old Republican idea dressed up in new clothes. Ryan is proposing to combine as many as 11 federal social safety net program, including food aid, child-care assistance, and housing subsidies, into a single block grant to the states. States would be allowed to experiment with different methods of service delivery, so long as they met basic standards, oversight, and reporting requirements. 

It would also, at least in theory, allow programs to be structured so that they don’t create disincentives to joining the labor force. Currently, some means tested programs are abruptly cut off when recipients reach a certain income threshold, making work far less rewarding. Ryan had previously advocated a “universal credit” model that would consolidate aid streams and allow them to be reduced gradually rather than all at once. 

So far, so Republican. Block grants are a long-standing GOP favorite when it comes to social safety net programs. They claim it’s because states, being closer to the people they serve, can spend the money more effectively than a Washington-based bureaucracy. (Democrats, of course, would point out that it also makes it easier to cut funding for social services.) 

Down in the details of the proposal, though, is a program that runs headlong into traditional Republican rhetoric about getting the government out of the details of people’s lives. Ryan proposes to have recipients of social safety net services sit down with a third party case manager hired by the government to provide social services and to construct a “life plan.” 

Related: Paul Ryan’s New Idea Is Really Smart, But Will It Fly? 

It says, “When crafting a life plan they would include, at a minimum:

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


Sample scenarios outlined in Ryan’s paper suggest that he envisions these contracts, and individuals’ relationships with the case manager lasting for years and monitoring their parenting skills, substance abuse, finances, living situation, and relationships with friends and family members. 

The proposal envisions sanctions as things such as a reduction in benefits, and incentives as financial rewards aimed at promoting savings – such as a savings bond. 

What it does not address is the likely size of the bureaucracy such a proposal would create if it went nationwide – a network of case managers for every individual (or even every family) on public assistance would likely require tens of thousands of new government employees (or contractors) and not to mention facilities, information technology equipment, and the other essentials of any modern organization. 

Another concern is that, should a program like this eventually be rolled out to all 50 states, the ideological preferences of different state governments could create serious differences in the kind and quality of benefits available to low-income people. In the rollout of the Affordable Care Act, for example, some Republican states flatly refused what amounted to practically free healthcare for millions of their poorest residents as a point of principle. A state-based social services system could make it possible that treatment of the poor could vary dramatically from state to state. 

Response to Ryan’s proposal was muted on the Republican side. House Speaker John Boehner (R-OH) said on Thursday morning that he had not yet had a chance to read it, and did not publicly endorse it. 

Related: Why Paul Ryan May Be the One to Beat in 2016 

“He’s trying to make our programs more effective, and…he’s shown that he’s really done his homework,” said Robert Doar, the former welfare commissioner of New York City and a fellow at the American Enterprise Institute. 

Doar said Ryan’s move to consolidate programs and give recipients a single point of contact was a good one. “These programs come at states and cities and actually, people in all sorts of different ways and its very complicated, very difficult, and hard to navigate.” 

Some commentators on the political left, though, slammed the idea of requiring benefits recipients to sign contracts as “insulting,” and suggested that Ryan was trying to shame the poor for being poor. 

Others, such as Jared Bernstein, a former chief economist to Vice President Biden, and a senior fellow at the Center on Budget and Policy Priorities, disagreed with Ryan’s diagnosis of the problems facing the poor in the first place. “The main problem faced by the American poor is not that there’s something fundamentally wrong with the safety net.  It’s that they lack the employment and earnings opportunities necessary to work their way out of poverty,” he wrote.  

Related: The Idea Man Influencing Paul Ryan’s Anti-Poverty Plan 

However, Bernstein complimented Ryan on his willingness to abandon his previous commitment to reducing the net amount of spending on the social safety net. 

Congressional Democrats, though, weren’t so ready to forgive and forget. 

Rep. Chris Van Hollen (D-MD), the ranking Democrat on the Budget Committee, held a conference call a few hours after the Ryan presentation and said he was amazed at the “cognitive dissonance” between the poverty plan and the budgets Rep. Ryan has drafted and shepherded through the House of Representatives in recent years. 

While Ryan insisted this morning that his opportunity grant proposal would keep the level of funding for social safety net programs at the current levels, Van Hollen pointed out, the Wisconsin Republican has repeatedly introduced budgets that slash spending on the poor.

“This is policy and political schizophrenia on steroids,” Van Hollen said. 

Van Hollen also criticized Ryan for hyping a plan that, he said, turned out to be a “gussied-up block grant.” 

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A longtime reporter on the intersection of the federal government and the private sector, Rob Garver is National Correspondent, based in Washington, D.C. He has written for ProPublica, The New York Times and other publications.