Republican Congressman Paul Ryan unveiled a new plan Thursday he says will eliminate poverty in America. Ryan called the War on Poverty a dismal failure, and said his plan will finally end poverty. He failed to mention, however, that the failed War on Poverty cut poverty in half.
In a seeming reversal of the 47 percent rhetoric of his recent past, Ryan used compassionate and understanding terminology when referring to the poor. Missing from his rollout speech was any mention of “takers,” the term he uses to describe anyone receiving public assistance including Medicare, veterans’ disability, and food stamps.
This remake of compassionate conservatism was immediately welcomed by many Ryan critics. They were glad because Ryan embraced President Obama’s plan to extend the Earned Income Tax Credit (EITC). This seemed almost too good to be true. Upon further review, however, it is too good to be true. The Ryan poverty plan is a Trojan horse. It is compassion on the outside, but on the inside we find that it decimates the poverty programs Ryan has hated since he first became a disciple of Ayn Rand.
What Ryan is skillfully trying to do is eliminate federal funds for food stamps and other social safety net programs by giving the money in block grant form to governors. What could possible go wrong? When the Roberts’ Court made Medicaid expansion optional for states, 30 Republican governors refused to expand Medicaid. Ask the millions of low income people going without health care thanks to those Republican governors and they’ll tell you how making a benefit optional actually works out.
Leaving poverty programs up to Republican governors is like leaving civil rights up to the states. It does not work.
First of all, Ryan’s plan does not include, or even mention, the single policy change that would do more than any other to reduce poverty at no cost to taxpayers — increasing the minimum wage. If the minimum wage were raised to $10.10 and indexed for inflation, millions would be lifted out of poverty and no longer eligible for taxpayer-funded assistance. Any anti-poverty plan that does not include increasing the minimum wage is bogus policy from the start.
Secondly, regarding the EITC expansion, Obama proposed paying for it by reducing special tax benefits enjoyed by big corporations and billionaires. Obama would have equalized the tax treatment of stock option compensation and wage compensation and crack down on the use of corporate tax havens like Bermuda and the Cayman Islands that allow corporations to avoid taxes.
Obama would have closed the “carried interest” loophole which lets hedge fund managers and other professional investors pay lower capital gains tax rates on their income. He also proposed closing the loophole that lets self-employed people avoid payroll taxes by classifying their income as profits rather than as wages.
Rather than force the rich to pay their fair share, Ryan funds his poverty program by cutting the existing programs that aid persons in poverty like food stamps. This is ironic. He is making the poor pay for their benefits, pretending it will lift them out of poverty.
The other problem with Ryan’s Trojan horse is that he bundles all social safety net programs into block grants to the states. He proposes giving each state the same amount of dollars now going to residents of that state under current programs like Food Stamps and other programs. The states can then use that money as they choose, meaning they could eliminate food assistance all together, and spend it all on something else, letting children and seniors go hungry.
Ronald Reagan implemented a block grant program telling people it would allow states to be more creative in how to implement those programs. The result over time was the money went to other purposes, and the programs, like mental health, intended by the original programs ended up drying up. This is what will happen to the Ryan-grants.
If something is too good to be true, it probably is not true. Zebras do not change their stripes. You can blot the stripes out with white wash, but a zebra is still a zebra. The Ayn Rand disciple and author of three Ryan Budgets, is still Paul Ryan. He still wants to cut social programs to finance tax cuts for the rich. He just wants the optics to look and sound more appealing. Caveat Emptor!