Ryan: Welfare programs making poverty worse

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House Budget Committee Chairman Paul Ryan (R-Wis.) on Monday issued a 204-page critique of federal anti-poverty programs that concludes many of them are redundant, counterproductive and in need of reform.
 
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“Federal programs are not only failing to address the problem. They are also in some significant respects making it worse,” the report states.
 
The report finds the federal poverty rate is at 15 percent, a drop of only 2.5 percentage points since President Lyndon Johnson launched a war on poverty 50 years ago. The poverty rate has remained high despite the government spending $799 billion on 92 programs to combat poverty in fiscal 2012, including $200 billion in cash aid and $300 billion on healthcare.
 
On food stamps, the report says the $78 billion per year program “reduces poverty — but not by much.” It argues that food stamps discourage work and only lowered poverty from 17.6 percent to 16.1 percent in fiscal 2012.
 
"Clearly, we can do better," Ryan said. "We can rework these federal programs and help families in need lead lives of dignity.”
 
The release of Ryan's report comes a day before President Obama is set to release his 2015 budget proposal. Obama, who has focused his midterm election messaging on reducing income inequality, has been calling on Congress to pass a $56 billion stimulus package and to raise the minimum wage to $10.10. 
 
Republicans are working to present voters with alternatives to Obama's ideas, including the welfare revamp that Ryan is working on and an alternative to ObamaCare.
 
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 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 top Democrat on the Budget Committee said the report is a sign Republicans plan to "slash social safety-net programs" in their spending blueprint.

"The GOP has never really given up on Mitt Romney’s attack on the 47 percent. Republicans in Congress are not waging a war on poverty, but rather a prolonged war against programs that help children from poor families, the working class and the vulnerable elderly," Rep. Chris Van Hollen (D-Md.) said.

"I hope this time is different, but I fear it won’t be — this one-sided report was put together without any effort to reach across the aisle," Van Hollen said.
 
Ryan's 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 (EITC), 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 (R-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 healthcare 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 last updated at 1:12 p.m.