U.S. Rep. Paul Ryan, (R-WI) speaks during the Iowa Republican Party's annual Lincoln Day dinner, on April 11, 2014, in Cedar Rapids, Iowa.
Charlie Neibergall/AP

Paul Ryan unveils new anti-poverty plan

Updated

As the Republican Party attempts to recast the GOP as more sympathetic to the needs of the poor, Wisconsin Rep. Paul Ryan has put forward a new anti-poverty plan that proposes sweeping changes to the safety net through a state-led pilot program.

States that opted into the “opportunity grant” program would receive a single block of aid that would consolidate funding for 11 federal programs, including food stamps, housing vouchers, heating aid, child-care assistance and welfare payments.

“We’re reconceiving the federal government’s role,” Ryan, chair of the House Budget Committee, said in a speech Thursday at the American Enterprise Institute. “No longer will it try to supplant our communities but to support them. In my view, the federal government is the rearguard – it protects the supply lines. But the people on the ground – they’re the vanguard. They fight poverty on the front lines.”

The Reid Report, 7/24/14, 2:52 PM ET

Are 'opportunity grants' just double-speak?

Joy Reid talks about Paul Ryan’s latest budget that would consolidate safety-net programs into a single grant offered to states – not a new idea, just under a more palatable name.

The plan would allow states to supplant federal formulas for determining aid for these programs, replacing them with aid determined on a case-by-case basis. Unlike Ryan’s austere budgets – which have gotten major heat for steep cuts to low-income programs – the deficit-neutral plan does not include overall funding cuts.

Individuals would receive aid by going to certified case managers who would tailor aid based on “a customized life plan to provide a structured roadmap out of poverty,” according to proposal. “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.” 

Democratic lawmakers quickly attacked the core part of Ryan’s proposal. “Once you turn something into a block grant, it makes it much easier to cut,” said Rep. Chris Van Hollen, ranking Democrat on the budget committee, speaking on a press call. He pointed out the sweeping cuts to such services in the House GOP budget that Ryan crafted. “It’s part of an ongoing effort to essentially block grant more things to the state and ironically, at the same time, propose new Washington, D.C. conditions” for the poor, he said.

The former vice-presidential nominee bristled at calling his program a “block grant,” the term for sending lump sums of money to state or local governments with loose guidelines about spending. “It isn’t a garden-variety block grant. This is very different,” Ryan said, adding that the aid was meant “to have customized and personalized aid to each person.” Ryan had previously proposed to block grant Medicaid, which isn’t included in his new anti-poverty plan.

“At the most basic level, successful completion of a contract will involve an able-bodied individual obtaining a job and earning enough to live above the poverty line”
Wisconsin Rep. Paul Ryan

All participants would be required to meet work requirements to receive aid, and states would be required to give beneficiaries the option of going to non-profit and for-profit organizations for case management. Ryan suggests having participants “sign a contract with consequences for failing to meet the agreed-upon benchmarks” for achieving life goals, as well as rewards for meeting goals ahead of schedule, such as saving bonds.

“At the most basic level, successful completion of a contract will involve an able-bodied individual obtaining a job and earning enough to live above the poverty line,” the plan says. “Each state may choose to define success slightly differently insofar as those basic conditions are met.” The states’ pilot programs would be evaluated by an independent third-party.

But while Ryan says his plan is budget neutral, it does not appear to account for the additional cost of hiring case managers, imposing new work requirements, and creating a new bureaucracy to administer them. That could mean less money for benefits and more for services to administer them, said Donna Pavetti of the Center on Budget and Policy Priorities (CBPP). “There are things about it that sound good, but when you get to the reality of it, it just falls apart,” she said, adding that federal agencies have often struggled to allocate limited resources to staffing and find enough skilled case workers. 

“This individualized case management, the work requirements – all of that is really resource intensive. How you’d do that without pulling from resources that help people meet their basic needs?” said Pavetti, CBPP’s vice-president for family income support policy. She points to a state-level program called Building Nebraska Families, which proved effective at moving more welfare recipients to work through intensive home visits, but which was also costly, averaging $7,400 to $8,300 per participant.

In terms of cost-effectiveness, Pavetti added, there’s often more bang for the buck in providing direct aid instead of personnel-heavy social services. “Meeting people’s basic needs is a much better bet,” she said. A growing body of research suggests that direct cash aid to the poor is actually even more effective than providing goods or services.

The new requirements could also create more barriers for lower-income Americans, said Van Hollen. “People in poverty will have a much more difficult time accessing support to help them climb out of poverty.”

Ryan also proposed to expand the Earned Income Tax Credit (EITC) for childless working adults – similar to a White House’s EITC proposal, but paid for by cutting energy subsidies that he derided as “corporate welfare.” The plan doesn’t specify which subsidies would be cut, but points out the example of billions spent “to subsidize corporations’ efforts to commercialize favored energy technologies and sources picked by the Congress and the bureaucracy.” Ryan’s office did not respond to a request for further detail.

Van Hollen said Ryan “didn’t identify $60 billion in cuts” required for the EITC expansion and criticized Republicans for simultaneously moving forward with legislation that would let an expanded Child Tax Credit for the poor fall by the wayside. “Our skepticism comes from the fact that he has voted in a way to make life even more difficult for poor people,” said Democratic Rep. Jim McGovern.

Ryan’s plan includes further reforms to the prison and education system. Ryan endorses bipartisan legislation from Sens. Mike Lee and Richard Durbin to reform federal sentencing laws, as well as a bipartisan bill that would promote alternatives to incarceration. He also proposes reforms “to make it easier for new accreditors to gain recognition from the Department of Education” and encouraged state and local governments to loosen regulations on occupational licensing.

Medicaid and Paul Ryan

Paul Ryan unveils new anti-poverty plan

Updated