By | August 18, 2014

On the surface, Rep. Paul Ryan may seem to be an advocate for those in poverty. His policy proposals, however, would undermine anti-poverty efforts by systematically weakening successful safety net programs like the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps) and rental housing vouchers. Previously, we did the math on how much his “Path to Prosperity” FY 2015 budget resolution would damage the safety net and hurt those in poverty. Ryan’s new proposal for anti-poverty reform, introduced recently at the American Enterprise Institute, is in effect more of the same.

Ryan calls his plan, Expanding Economic Opportunity in America, a “discussion draft.” On that point, we agree. Ryan does need to have more discussions—with poor people. This newest plan is just a repackaging of ideas we’ve already seen.

The cornerstone of the proposal is the Orwellian-named “Opportunity Grant,” which would consolidate 11 existing benefit assistance programs, including SNAP, housing subsidies, cash welfare (Temporary Assistance for Needy Families, or TANF), and child care assistance, into a single block grant to states. States would choose whether to participate in the program and receive an Opportunity Grant, which would replace their current system of receiving funding under each individual program. States wishing to participate in this pilot program would have to submit a plan for approval by the federal government. Because the Ryan plan is deficit-neutral, the overall amount of federal funding would not change for participating states.

Under an Opportunity Grant, aid would be distributed to beneficiaries in a way that mirrors how the states would receive their funding: consolidated. Eligible individuals and families in those states would receive a “single payment” intended to cover multiple forms of aid. These Opportunity Grants would have to be administered by “at least two service providers” in each state—in addition to the state government offices, for-profits and non-profits could also be service providers. All of this is problematic for a number of reasons.                                             

According to Ryan, current federal programs “don’t see how people’s needs interact.” And yet, his proposal to consolidate these very different programs into a single, capped funding stream virtually guarantees that fewer individuals’ and families’ needs will be met and understood. Turning safety net programs into block grants with fixed levels of funding is one of the quickest ways to undermine the safety net’s effectiveness, as block grants by design are not responsive to economic changes. Although Ryan says a countercyclical element could eventually be incorporated into the block grant, it would not happen in the pilot stage. In addition, history shows that virtually every program that has been converted into a block grant has had its funding cut significantly in subsequent years.

The flat funding structure of a block grant also means its value depreciates over time. In the case of the Opportunity Grant, if a number of programs are combined and then the price of housing goes up, the amount allotted toward housing costs doesn’t necessarily follow that increase. In other words, the amount of funding is no longer tied to the real-world cost. This alone would greatly diminish both the reach and effectiveness of the Opportunity Grant. According to the Center for American Progress, “consolidating multiple programs into a single funding stream can reduce accountability for program outcomes and leave needed services vulnerable to later cuts.”

We’ve already seen how this played out with the cash assistance program. Since its transformation into TANF in 1996, the program’s funding has been flat. As a result, the real value of TANF has decreased by almostone-third. The program TANF replaced, Aid to Families with Dependent Children, used to reach nearly 70% of families with children living in poverty. Today, just 25%of families with children living in poverty receive assistance. The fact that Ryan repeatedly lauds this reform as an exemplary model does not bode well for the safety net under his new plan.

The Opportunity Grant would pose a special threat to SNAP and housing vouchers and other rental assistance programs, since they make up three-quarters of the funding being combined into the Opportunity Grant and would be most impacted by future cuts. These programs are our most effective anti-poverty tools, with SNAP currently lifting five million people out of poverty and rental assistance lifting three million people out of poverty.  

While states would be subject to few requirements in implementing Opportunity Grants, beneficiaries would have to comply with new, harsh standards. This includes extending work requirements for eligible recipients to every type of aid that would be consolidated within the Opportunity Grant. All recipients would also have to fill out what Ryan calls a “customized life plan” with their caseworkers that would actually amount to a binding contract punishable by the loss of assistance if broken. In addition, families and individuals would face time limits for how long they could receive any sort of assistance. Effectively, Ryan wants to add more barriers to accessing the programs that help people escape poverty.

Despite his professed concern with efficiency and holding down costs, Ryan has proposed a plan that would not only require additional funding to support, but would also create more administrative delays and roadblocks for people receiving assistance for even the most basic needs. For example, contrast the current operation of the SNAP program with how assistance would be distributed under the Ryan proposal. SNAP is currently one of the most efficient social services around. Administrative costs make up just 5% of the budget. In addition, SNAP can also be expedited—destitute families and individuals can receive benefits in just seven days. If every SNAP participant had to sit down with a caseworker and create a plan complete with benchmarks and employment requirements, as would be the case under Ryan’s proposal, the program’s ability to reach those in need quickly and efficiently would be dramatically impaired. Moreover, had Ryan listened more closely to those in poverty, he would have learned that the majority of SNAP participants are already working.  

One element in Ryan’s proposal we agree with is expanding the Earned Income Tax Credit (EITC) to childless adults aged 21 and over, and doubling the maximum credit and phase-in and -out rates. Currently, only adults aged 25 and older are eligible for this credit. Unfortunately, Ryan wants to pay for this by eliminating “a number of ineffective programs.” Ironically, one of those “ineffective programs” is the Social Services Block Grant (SSBG), a program just like the Opportunity (Block) Grant. Before 1981, the SSBG was actually a number of separate social services, including child care, adoption, counseling, and employment services. Since the combination of these services into the SSBG, the block grant “has lost 77% of its value due to inflation, cuts, and funding freezes.” As a result, Ryan has called for the elimination of the program, saying it “is duplicative and does not have accountability.” And yet, Ryan is proposing the same plan with the Opportunity Grant.

If eliminating the SSBG and other services, including two nutrition programs (the Fresh Fruit and Vegetable Program and the Farmers’ Market Nutrition Program), still isn’t enough of an offset, Ryan says he’ll then “eliminate corporate welfare.” Considering he just included major tax cuts for the wealthiest 2% and major corporations in his budget, we’re doubtful.

There’s nothing like missing the opportunity to give others more opportunities—and that’s exactly what Ryan did with this latest proposal. His tour around the country may have provided a valuable introduction to the extremely complex issues of poverty. But Ryan’s understanding of poverty is just that: rudimentary. A contract will not help people fight against the systemic causes of poverty. They are fighting already, with or without a contract. What they need—and what Ryan needs to understand—are policies that provide more true opportunities. No one says it better than Tianna Gaines-Turner, who testified at Ryan’s last Budget Committee hearing:

Families are [already] working. We don’t need to be placed in more work programs, we need our jobs to pay living wages, and to offer family-oriented policies like paid sick and paid family leave. This way, we can earn more, save money, and create our own safety net so that we never have to turn to the government for help again.

Ryan’s plan to combine all assistance programs into a single block grant with burdensome work and contract requirements would only limit those opportunities.

The author thanks Kali Grant, Economic Justice and Opportunity VISTA, for her extensive work on this blog.

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