Ryan’s Rhetoric Doesn’t Match His Proposal’s Reality

July 24, 2014 at 4:55 pm

House Budget Committee Chairman Paul Ryan left the impression today that his proposed Opportunity Grant will allow low-income individuals to get income assistance as well as help they may need to go to school, get off drugs, and succeed in the workplace.  That picture, however, doesn’t reflect the reality of his proposal.

Chairman Ryan spoke eloquently this morning about “Andrea,” a single mother who needs income assistance in the near term, help finding a job, assistance so she can go to college, and help paying for child care for her two young children while she works and attends school so she can reach her dream of becoming a teacher and climb into the middle class.  He implied that his Opportunity Grant would deliver the package of supports she needs to succeed.

In fact, under Chairman Ryan’s plan, neither Andrea nor anyone else would be guaranteed any assistance.  This means that Andrea could apply for services and be told that she cannot get any help.  Chairman Ryan doesn’t acknowledge that scenario.

To be sure, many kinds of assistance already are limited so that not everyone who’s eligible for assistance gets it — with one important exception.  Today, all eligible poor households can get help to buy groceries through SNAP (formerly food stamps), a form of income assistance that not only helps those households put food on the table but can free up resources so that families — not caseworkers — can decide how to direct their limited incomes.  Chairman Ryan’s plan would no longer guarantee that basic safety net.

And, nothing in Chairman Ryan’s proposal would make it more likely that families in Andrea’s situation would receive that full package of supports unless other needy individuals and families receive significantly less help.  Indeed, states already have flexibility to use Temporary Assistance for Needy Families (TANF, which provides basic income assistance to poor families with children) to put together precisely this package of benefits.  But TANF’s flexibility does not trump its limited resources, and that’s why many single mothers like Andrea can’t get the help they need to make ends meet, find work, go to school, and ensure that their children are safe and well cared for while they juggle work and school.

Today, just 25 of every 100 poor families receive TANF assistance, only 1 in 7 low-income children who qualify for help paying for child care receives it; and just 1 in 4 low-income households that qualify for help paying for housing get it.

Also of note, the service provider structure that Ryan envisions almost surely would require more staff and, thus, would generate higher administrative costs, leaving less funding for assistance and services.

In short, the only way that Chairman Ryan’s plan can provide more assistance, targeted or not, to families like Andrea’s is if some poor households receive significantly less help, with cuts likely coming in help to pay for food and housing — the two largest programs that Ryan would consolidate under the Opportunity Grant.

The case of “Steven,” whom Ryan also highlights, makes the point as well.  A single 19-year-old non-custodial father, Steven is jobless and needs help to get off drugs.  Ryan’s proposal indicates that the Opportunity Grant would help him get drug treatment, move him into transitional housing (a form of subsidized housing), and get him help with attending parenting classes, finding work, and pursuing further education.

These are all needed services, and limited funding keeps many people, particularly adults not living with children and who have the same needs as Steven, from obtaining that help.  But the Opportunity Grant structure would not provide additional resources (and as my colleague Robert Greenstein points out, could well provide fewer resources), so the only way to provide this richer set of supports for Steven is to cut the help that other families receive.

Chairman Ryan skirts this fundamental math.  Consolidating funding streams into a single “opportunity” grant allows him to say that individuals like Andrea and Steven will get a better-targeted suite of supports without saying which families will get less help and how that will affect them.

Greenstein on Ryan’s “Opportunity Grant”

July 24, 2014 at 4:52 pm

CBPP President Robert Greenstein just issued a commentary on House Budget Committee Chairman Paul Ryan’s “Opportunity Grant” proposal, part of his new poverty plan.  Here’s the opening:

A centerpiece of House Budget Committee Chairman Paul Ryan’s new poverty plan would consolidate 11 safety-net and related programs — from food stamps to housing vouchers, child care, and the Community Development Block Grant (CDBG) — into a single block grant to states.  This new “Opportunity Grant” would operate initially in an unspecified number of states.  While some other elements of the Ryan poverty plan deserve serious consideration, such as those relating to the Earned Income Tax Credit and criminal justice reform, his “Opportunity Grant” would likely increase poverty and hardship, and is therefore ill-advised, for several reasons.

Click here for the full commentary.

CLASP: State Experiences Show Safety Net Programs Don’t Need Massive Overhaul to Work Better

July 23, 2014 at 5:23 pm

As House Budget Committee Chairman Paul Ryan prepares to unveil his proposal to address poverty, Olivia Golden of the Center for Law and Social Policy (CLASP) today took a closer look at the experiences of six states to debunk common myths about the delivery of safety net programs.

Golden writes:

[S]ome commenters have criticized major anti-poverty programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) as so complex, rigid, difficult to administer, and impossible to package together that they need fundamental change.  These critics’ recommended changes include merging the programs into a block grant, allowing states discretion over major program provisions through waivers, or delegating discretion below the level of states, to local governments or case managers.

These proposals are deeply risky for families. . . . And we just don’t need to take those risks.  New information from the states continues to build the evidence that massive overhaul is simply not necessary to achieve the goal of more streamlined and integrated program administration.

Golden explained that the experiences of the six states involved in the Work Support Strategies (WSS) initiative — a project coordinated by CBPP, CLASP, and the Urban Institute that is designing, testing, and implementing more effective, streamlined, and integrated approaches to delivering key supports for low-income working families — offer lessons for how to improve safety net programs.

She concluded:

Rather than let myths drive suggested remedies to the safety net, let’s build on success and follow the evidence about what changes can really make a difference.  Rather than massive overhauls that would only undercut effective programs, we need to build on what some states are already doing:  delivering health and nutrition assistance, help with child care, and other core work supports smoothly, speedily, and as an integrated package to all eligible families.

Click here to read the full piece.

Fewer Poor Children Under Welfare Law, But More Very Poor Children

July 23, 2014 at 3:02 pm

There are fewer poor children in America but more very poor children since policymakers dramatically shifted low-income assistance from non-working families to working families in the mid-1990s, our new report explains.

We estimate that the share of children in deep poverty — with family income below half of the poverty line — rose from 2.1 percent to 3.0 percent between 1995 and 2005, after correcting for households’ underreporting of safety net benefits in Census surveys (see graph).  The number of children in deep poverty climbed from 1.5 million to 2.2 million.

These findings are consistent with other research, such as a study finding a significant rise in the number of households with children with monthly cash incomes equivalent to less than $2 per person per day — a standard of poverty more associated with developing countries.

The 1996 welfare law replaced Aid to Families with Dependent Children (AFDC), which had chiefly served families with little or no earnings, with Temporary Assistance for Needy Families (TANF), which offers less assistance and includes stricter work requirements and time limits.  At the same time, policymakers expanded assistance for moderate-income working families, such as by strengthening the Earned Income Tax Credit (EITC) and medical and child care programs and creating and later expanding the Child Tax Credit.

Some data sources don’t show a rise in deep poverty for children, but this appears to reflect their omission of a large share of the income from key public benefit programs.  Correcting for this underreporting reduces the deep poverty rate in any given year but reveals the increase in deep poverty over the decade as income from these programs — particularly public assistance (AFDC/TANF) — shrank.

Public assistance kept 2.4 million children out of deep poverty in 1995 but only about 600,000 children in 2005, after correcting for underreporting.

Policymakers need to take account of the significant rise in deep poverty among children as they consider proposals affecting support for poor families, including the poorest families with children.

Today’s Conflicting Court Decisions Won’t Affect Federal Marketplace Subsidies

July 22, 2014 at 3:35 pm

Two federal appellate courts issued rulings today that relate to the health reform law.  In a unanimous decision, a panel of the U.S. Circuit Court of Appeals for the Fourth Circuit upheld a lower court decision finding that individuals are eligible for premium subsidies to purchase health insurance through the federal marketplace, just as they can in state-based marketplaces.

In a 2-1 decision that has received considerably more media attention, the D.C. Circuit Court of Appeals overturned a lower court ruling and ruled that premium subsidies can be used to purchase coverage only through state-run marketplaces, and not through the federal marketplace.

What do these decisions really mean?

  • Premium subsidies for the millions of federal marketplace enrollees will continue to be available, as the Administration confirmed today.
  • The Administration will appeal the D.C. Circuit court decision to the entire D.C. Circuit, where it will likely be reversed, as Washington and Lee University School of Law professor Timothy Jost explained earlier this month.
  • That’s because, as we first noted two years ago, the merits of the legal theory challenging subsidies for federal marketplace enrollees are extraordinarily weak, relying on a distorted, incorrect reading of the Affordable Care Act and ignoring legislative intent and history.