Congressman Ryan's Anti-Poverty Grants Won't Reduce Poverty

Jul 29, 2014

By MBPC Staff

In case you missed it last week, Wisconsin Congressman Paul Ryan proposed “Opportunity Grants”  as his new anti-poverty program. The idea is to combine 11 current programs like SNAP, housing assistance, heating programs, and others into one block grant given directly to a select number of states to test the effectiveness.

“The idea would be to let states try different ways of providing aid and then to test the results — in short, more flexibility in exchange for more accountability,” Ryan said in a speech to the American Enterprise Institute, a Washington think tank. “Get rid of these bureaucratic formulas. Put the emphasis on results.” 

If you didn’t know Congressman Ryan’s history of an incredible lack of support for programs that help low-income families, this could seem like a good idea. Instead of families having to go to many places to apply for and/or qualify for each program, they would go to one state counselor and do it all at once.

However, the Center for Budget Policies and Priorities (CBPP) says there are many problems with this idea. The biggest is that it won’t actually help poor people. More likely it would increase poverty and shrink these important safety nets. It makes the important point that history shows us when policymakers combine programs into a block grant, federal funding typically declines, often dramatically.  And total funding to assist low-income families — from federal, state, and local levels combined — likely would decline, because officials could use the block grant funds to replace state and local funds now going for similar services.  

 E.J. Dionne from the Washington Post  made some great points about how important SNAP is both to families and to our economy.  He said, “ ‘Experimenting’ with people’s food-stamp money is not something we should sign onto.”

One positive from his proposal is that it calls for an expansion of the Earned income Tax Credit (ETIC) which we've blogged about a few times.  Congressman Ryan proposes lowering the eligibility age childless workers from 25 to 21, doubling the maximum credit to about $1,000, and phasing in the credit more quickly as a worker’s income rises.

According to CBPP, Ryan’s proposal has serious flaws.

• He would pay for it in part by eliminating the refundable part of the Child Tax Credit for several million children in low-income immigrant working families.
• He would eliminate the Social Services Block Grant, a flexible funding source that helps states meet the specialized needs of their most vulnerable populations, primarily low- and moderate-income children and people who are elderly or disabled. 
• He would end a program that provides fresh fruits and vegetables primarily to children in schools in low-income areas. 
• He presents the proposal as an alternative to raising the minimum wage, which has lost 22 percent of its value since the late 1960s due to inflation. 

We at MBPC will continue to advocate for policies that help low- and moderate-income people improve their lives. From what I read so far about the Ryan proposal, it does not look like this is the plan to do it.