CHN: Ryan Poverty Plan Would Increase Poverty

On Thursday, July 24, House Budget Committee Chairman Paul Ryan (R-WI) unveiled a “discussion draft” of his plan to fight poverty. In Expanding Opportunity in America, Rep. Ryan laid out six areas for reform, including the safety net, the Earned Income Tax Credit, education (including job training), the criminal justice system, regulatory reform, and results-driven research. Many advocacy groups responded to the plan with concerns about a number of the points contained within.
One of the main points of contention was Chairman Ryan’s call for the creation of “opportunity grants” that would consolidate up to 11 different federal programs into one funding stream for states, if they choose to take part. The 11 programs include SNAP/food stamps, Temporary Assistance for Needy Families (TANF), Section 8 Housing Choice rental vouchers, Section 521 Rural Rental Assistance payments, Section 8 Project-Based Rental Assistance, Public Housing Capital and Operating Funds, Child Care and Development Fund, Weatherization Assistance Program, Low Income Home Energy Assistance Program (LIHEAP), Community Development Block Grant, and Workforce Investment Act Dislocated Workers. States would be able to put some or all of these together into the block grant.

Many advocacy groups have long opposed block grants because they result in funding cuts that reduce benefits or services and also end federal protections to ensure that needy people are not excluded from programs. Ryan’s plan promises that total funding would not decrease for states opting to take the “Opportunity Grant.” But since several previous budgets proposed by Rep. Ryan would drastically cut most of the programs he would pool in this block grant, it is hard to see how that promise could be kept if he does not abandon those budgets. Further, the plan also called for customized and personalized case management for individuals or families. However, as his plan is budget neutral, advocates were left wondering where the money for increased investment in case management would come from.

Block grants also appear in other areas of Ryan’s plan. He calls for Head Start to be converted into a block grant and for certain job-training programs (including some programs now under the Workforce Innovation and Opportunity Act) to be converted into a block grant.

The Ryan poverty plan also calls for an expansion of the Earned Income Tax Credit for childless workers, doubling the maximum credit to $1,005 for this group and lowering the minimum eligibility age from 25 to 21. While this expansion is supported by advocacy groups and President Obama, groups do not support how Rep. Ryan proposed to pay for this expansion – by eliminating the Social Services Block Grant and by denying the Child Tax Credit to 5.5 million children in immigrant families, including 4.5 million low-income citizen children. In addition, advocates called out the irony in Ryan’s insistence on paying for this tax credit while the House has passed billions in tax cuts for corporations without paying for them.

While no action in expected on Rep. Ryan’s plan this year, it may be considered a starting point for future Congressional discussions next year after the elections. If parts of this plan are enacted, many advocates believe the loss of SNAP/food stamps’ current capacity to expand when need grows and restrictions likely in other programs could be devastating for low-income people.

See CHN’s blog, Voices for Human Needs, for more reactions and resources and our Head Smacker related to Rep. Ryan’s plan.

Better Budget for All
early childhood
Fact of the Week
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Low Income Home Energy Assistance Program (LIHEAP)
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Poverty and Income
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Temporary Assistance for Needy Families