Ryan opens new front in war on poverty

Paul Ryan is moving to reframe the debate on regulations, arguing that the nation's poor are the real victims of the red tape spewing from Washington.

Congressional Republicans have long maligned the president’s regulatory agenda as overly burdensome to businesses. But in making the case that low-income Americans are disproportionately impacted, the House Budget Committee chairman hopes his new anti-poverty plan can get a more sympathetic ear from the public.

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“A lot of families are trying to get ahead, but Washington is just simply getting in the way,” Ryan (R-Wis.) said during a recent speech at the conservative American Enterprise Institute.

Ryan’s “Expanding Opportunity in America” initiative has received a relatively warm reception from Democrats, especially considering that it comes from one of the most influential House Republicans — and one seen as a potential presidential candidate.

But some on the political left argue that the plan’s calls for greater congressional control of rule-making under the auspices of protecting the poor is nothing more than a thinly veiled retread of previous GOP proposals.

“It’s really a wolf in sheep’s clothing,” said Ron White, director of regulatory policy at the Center for Effective Government. He said Ryan’s plan would add new hurdles to the rule-making process “in the guise of trying to be socially progressive.”

The regulatory part of Ryan’s anti-poverty plan goes after “regressive” federal rules — those that have an outsize economic impact on low-income households.

Supporters of his plan say regulations are ultimately borne by ordinary consumers and households who pay extra when new restrictions are piled on to the products and services they use. The poor end up spending a greater share of their income to cover the added expense.

In some cases, the added costs pay for protections that are a higher priority for middle or upper-class households, said Creighton University associate economics professor Diana Thomas, whose research is cited in the Ryan report.

“By forcing everyone to pay for high income household preferences ... you’re going to affect lower income consumers negatively,” she said.

For example, she pointed to new Transportation Department regulations requiring rear-view camera technology on some vehicles. She said the requirement brings a significant new expense but only a small reduction in the risk of accidents where vehicles back over people.

Consumers already have the option of buying cars with the rear camera feature, and poorer car buyers generally choose to spend their money elsewhere, Thomas said.

She also cited Food and Drug Administration regulations prohibiting the use of ozone-depleting chemicals as propellants in inhalers used by asthmatics. Thomas said the overall effect on the ozone layer was negligible, but the cost of inhalers has tripled under the mandate.

Sofie E. Miller, a senior policy analyst at the George Washington University Regulatory Studies Center, has conducted similar analyses, focusing on the steady stream of energy-efficiency regulations issued in recent years for microwaves, dishwashers and other appliances.

While a good investment over the long term, the more energy efficient appliances are often a bad deal for poorer consumers with less disposable income, Miller said.

“There’s nothing wrong with people making the choice to buy an energy efficient product,” she said. “It just doesn’t make sense for some people.”

Proponents of stronger health and safety protections, though, are pushing back against Ryan’s argument that federal regulations harm the poor.

“The regulatory component trades on the fallacy that deregulation creates job growth and can alleviate poverty,” said Amit Narang, a regulatory policy advocate for Public Citizen. “The empirical evidence simply doesn’t back this up, and the 2008 financial crash is a strong reminder that deregulation can be disastrous for our economy.”

Under Ryan’s plan, agencies would be required to conduct a “distributional analysis” on proposed regulations to see if they would have a disproportionate economic effect on low-income households or low-wage workers. Those regulations would require congressional approval.

Rules put forth to address an "immediate risk to public health or safety" could be exempted under the Ryan plan.

Ryan contends that the proposal, if adopted, would help both the public and Congress better “understand the tradeoffs” for proposed rules.

“It would force agencies to analyze exactly how each regulation would affect the most vulnerable and, if possible, to explore less costly alternatives,” according to the 73-page plan. “It would also protect low income communities against an overzealous bureaucracy.”

Critics note that both parts of Ryan’s regulatory fix — the additional agency analyses and the greater congressional authority over rule-making — are similar to measures in a number of bills approved by the GOP-controlled House. All have stalled in the Democratic-led Senate.

White said progressives in Congress would see through the plan’s anti-poverty “veneer” and realize that, “this is nothing new from the conservative side.”

But the regulatory reform proposal is just one of several provisions of Ryan’s plan, which has generated some interest from Democrats.

The plan centers on a new “Opportunity Grant,” which would consolidate nearly a dozen federal programs into a single revenue stream for states. Ryan says he would not cut the amount of money earmarked for helping the poor, but would change the way that it is handed out. 

It would also expand the earned income tax credit, a provision that drew praise from Robert Reich, who served as President Clinton’s Labor secretary.  

“This is something that is very new and different from the Republican Party,” Reich said last month on ABC’s This Week. “And I think it deserves a careful look by Democrats.”

It remains to be seen whether the plan — or its regulatory component — will attract the necessary Democratic backing.

But Ryan appears intent on making the case that the measures are vital to lifting Americans out of poverty.

“Chairman Ryan is encouraged by the reaction so far," a spokesman for the lawmaker said.

"He will continue to work to build support on both sides of the aisle for reforms that will expand opportunity."