The Republican trust gap on poverty

Ryan at Kopp's Frozen Custard, a Milwaukee area chain

Ryan at Kopp’s Frozen Custard, a Milwaukee area chain

With Republicans, it all comes down to spending less money. This is the great credibility obstacle faced by the party and its aspiring presidents as they try to formulate ways to address poverty and shrinking opportunities to move up in life.

It’s true that Democrats seem to always want to spend more and resist pruning programs, and that has resulted in lower ratings from the public when it comes to controlling the deficit. But Republicans are dealing with an empathy gap that is directly related to the economy and could be consequential in a national race. The GOP trailed the Democrats 45 percent to 17 percent in an NBC-Wall Street Journal poll last month on the question of which party does a better job “showing compassion and concern for people.”

The current fight over emergency federal unemployment benefits for the long-term jobless is a real-time showcase. Republicans at first seemed generally resistant to extending the relief, even though there are still three people for every job available and it is traditional to approve the benefits, no strings attached, in those circumstances. The “softer” position now emerging among some is that the expenditure must be offset by a spending cut somewhere else in the budget. The party never made that demand when fellow Republican George W. Bush was in the White House. But now, as usual, it’s all about the money, and never mind the stress created among the long-term unemployed as Congress searches for a way forward.

Former Capitol Hill aide Ron Haskins, a Republican expert on income issues at the Brookings Institution, put the money question to Rep. Paul Ryan, chairman of the House Budget Committee, at an Economic Mobility Summit on Monday: Are spending cuts a necessary part of his plans to alleviate poverty? (Watch it here; the question is asked at 1:07).

Ryan’s answer was less direct than Haskins’ question, but the answer that came through eventually was yes. “It has nothing to do with a line on a spreadsheet,” he started off. “It has everything to do with is this working or not.” We can’t measure this, he continued, by “how much money we throw at it.” Throwing less at it, he added, would be a better idea because freedom and free enterprise are “brought forth by keeping government limited.” As the war on poverty stands now, he said, “we’re biting off more than we can chew” and cramping the roles that civil society, private enterprise and individuals should play.

The premise that government should recede as a major force in solving such a profound and complex problem is flawed, but let’s put that aside. Ryan and Florida Sen. Marco Rubio, both potential presidential candidates, are saying interesting things about the current safety net and its shortcomings. They lament the uncoordinated, overlapping nature of government programs meant to help, and have ideas for change.

Rubio, in a speech marking the 50th anniversary of the War on Poverty, proposed putting all the anti-poverty money into “a revenue neutral Flex Fund” and turning it over to the states. He cites all kinds of experiments states are conducting to help get people into work (never mind that President Obama proposed ways to encourage that trend back in 2011). Given the severe disparities in Medicaid, education and other areas when states take the lead, this idea raises concerns, but it’s well worth chewing over.

An even more compelling idea is Rubio’s proposal to replace the Earned Income Tax Credit with a “federal wage enhancement” for low-wage jobs. It would apply to single people as well as the married couples and families covered by the EITC, and it would be synchronized with regular paychecks instead of coming as a year-end lump sum.

Both of these ideas have the potential to reduce complexity and maybe even scarcity, both of which cause mental fatigue that researchers say drains poor people of IQ points and the capacity to make good decisions. The Flex Fund would even rise and fall with slumps and peaks in the economy. But Rubio’s team has indicated the enhanced wage part of the package would be revenue neutral, meaning families could suffer if singles are added. That pesky money question yet again.

At Brookings, Ryan laid out two unassailable criteria for reform, simplicity and standards. He suggested that we look to Britain’s Universal Credit, which collapses six means-tested programs into one overall payment. The Universal Credit tapers off gradually as people’s incomes increase (as opposed to the abrupt loss of help in this country that is, as Ryan suggests, a disincentive to work), and features tougher job-search requirements. The Universal Credit is having its own bungled rollout at the moment – “a rough patch, no two ways about that,” Ryan said – but he called the basic concept “very sound.” It remains to be seen how this works in real life, but early research on direct cash payments to the poor suggests it could be effective. And it certainly sounds like it would relieve stress and logistics problems for beneficiaries.

As for standards, Ryan means work, and most people would probably agree that those who receive government benefits should work if possible. But Ryan didn’t mention that many of these people already do work, nor did he get into the “if possible” part. In some cases people have child-care and transportation needs that make it impractical to work. Most important, and he knows this as well as anyone, there are – I’ll say it again — three people for every available job. Would he be willing to spend federal money to directly create jobs? Because at this point, how else could we get people into slots fast?

The Rubio and Ryan poverty offensives have a number of analysts saying they perceive a sea change in the focus and rhetoric of Republican leaders, and in the prescriptions they are proposing. Ironically, though, Ryan pinpointed the GOP’s core problem when he said that opportunity is all about trust. “Government when used wisely can increase trust,” he said at Brookings. “Where there is trust, there is collaboration. Where there’s collaboration, there is economic growth.”

It’s hard to see how Republican activities foster any of that. House Republicans, including Ryan, voted last fall to cut $40 billion and up to 4 million families off food stamps – while leaving in place huge subsidies to farmers and agribusiness. Ryan’s famous budgets, meanwhile, eliminate major chunks of federal spending, in large part by turning entitlements (everyone who qualifies gets them) into block grants or vouchers (defined amounts of money that almost always fail to increase enough to hold their value).

Some of the ideas coming now from Ryan and other Republicans have potential for bipartisan support and good results for the people they are meant to help, and could even save money in the long run. But they won’t get a serious hearing from Democrats if the upfront goal is to starve and shrink government programs that fight poverty. That’s a prescription for a trust gap.

2 Comments on “The Republican trust gap on poverty”

  1. […] View Original: The Republican Trust Gap on Poverty […]

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