March 03, 2014, 10:53 am
By Erik Wasson
“Federal programs are not only failing to address the problem. They are also in some significant respects making it worse,” the report states.
Ryan has said he plans to focus this year’s House budget resolution on changing the way the U.S. fights poverty, and the report released Monday offers a first look at what he is likely to propose. In his previous budgets, Ryan has called for converting the food stamp program and Medicaid to block grants and capping the federal contribution to states to run the new versions of the programs.
The poverty report argues that many means-tested federal aid programs are discouraging work by imposing an effective marginal tax once people stop receiving assistance and find employment. It also argues that family structure is “perhaps” the most important indication of poverty.
“We need to take a hard look at what the federal government is doing and ask, ‘Is this working?’,” Ryan said. “This report will help start the conversation. It shows that some programs work; others don’t. And for many of them, we just don’t know.”
The report takes a detailed look at each poverty program, details its origins and costs and presents evidence on the positive and negative effects of each.
It offers strong praise for the Earned Income Tax Credit, which ensures that most low-income families receive a tax refund.
“The consensus among studies on the EITC is that it is an effective tool for encouraging and rewarding work among lower-income individuals, particularly single mothers,” the report states.
President Obama is calling for an expansion of the EITC, which cost $59 billion in 2012, and some Republicans, including Sen. Marco Rubio (D-Fla.), have expressed support for broadening eligibility.
The Ryan report is critical of Head Start and Pell Grants, two politically popular programs.
“The Head Start program is failing to prepare children for school, but research on early education in general has had mixed results,” it finds.
The report offers evidence that federal Pell Grants to college students are helping to contribute to massive inflation in tuition.
The discussion on Medicaid is the most nuanced in the report. It offers evidence that the helathcare program for the poor crowds out private insurance participation, discourages work, contributes to rising healthcare costs and might worsen health in many cases.
— This story was updated at 11:32 a.m.