Rep. Paul Ryan (R-WI) is back to talking about poverty, taking to CBS's Face the Nation this past weekend to lay out his plans for tackling it. Some of his ideas on the topic are worthwhile — he's right that the Earned Income Tax Credit needs to be increased — and the fact that a major national politician has taken an interest in the topic at all is a cheering development.
But for all Ryan's rhetoric on poverty, he's also the author of a series of budgets that would absolutely wreck programs for the American poor, inflicting massive human suffering on the nation's most vulnerable residents. It's never been exactly clear how Ryan would resolve this tension, but his appearance on Face the Nation suggests he's going to try to make his poverty programs work with his budgets‚ which is to say he's going to argue that taking trillions away from the poor is somehow actually good for them.
It doesn't help that the first policy statement he makes is an out-and-out lie:
After a 50-year war on poverty and trillions of dollars spent, we still have the same poverty rates.
This sentence suggests that either Paul Ryan has absolutely no clue how poverty rates work, or he does know and is actively deceiving viewers. First of all, the specific claim in question isn't even technically accurate. The poverty rate was 19 percent in 1964, when the War on Poverty was announced. In 2013, it was 14.5 percent. We do not have the same poverty rates we did then. Ryan is just wrong.
But even that dramatically understates the progress that has been made. The official poverty rate is a travesty of a statistic, and using it at all in this context is irresponsible. It's literally based on food prices in 1955. But more relevantly for these purposes, it excludes the very anti-poverty programs Ryan is talking about. It excludes in-kind transfers like Medicaid, food stamps, and housing vouchers, as well as tax-based programs like the EITC. Blasting those programs because they don't show up in the poverty rate is like arguing that Netflix shows have zero viewers by pointing to cable ratings.
A much better metric, which takes anti-poverty programs fully into account and is based on more recent data, is known as the Supplemental Poverty Measure. The SPM factors in government programs, and is based on current data about spending on food and other necessities. It's the poverty rate people like Ryan should be referencing. While the federal government has only been using the SPM for a short while, a group of researchers centered at Columbia — Christopher Wimer, Liana Fox, Irv Garfinkel, Neeraj Kaushal, and Jane Waldfogel — went back and calculated SPM numbers for every year since 1967. To distinguish from the government-issued SPM metric, they call this "anchored SPM."
The researchers found that anchored SPM (the blue line below) has fallen dramatically in recent decades. But if you take out government programs, you get the green line below, which doesn't fall at all. Poverty — measured accurately, in a way that includes the government programs Ryan is trying to evaluate — fell, and it fell entirely because of government programs:
"After accounting for taxes and transfers, poverty falls by approximately 40 percent, from 26 percent to 16 percent," write Wimer et al. Absent those programs, poverty actually would have increased slightly.
Ryan knows about the Supplemental Poverty Rate — he was criticized for this exact poverty rate sleight of hand in the past. But that makes what Ryan went on to say on Face the Nation even more bizarre:
It's really not a more money thing, it's 'spend the money we have more effectively.' … It's not a function of pumping more money into the same failed system, because we'll only get the same failed result.
It's true that efficient things are better than inefficient things. But we don't have a failed system. We have a system that, while flawed in certain respects, has nonetheless succeeded in cutting poverty by 40 percent relative to 1967. Pumping more money into that system would cut poverty even more. Ryan recognizes this when it comes to the EITC, but he doesn't get it at all where other programs are concerned.
But Ryan doesn't just want to spend the money we're currently spending more efficiently. He wants to cut that spending by trillions of dollars. Also in the interview, he touts his plan to block-grant Medicaid, food stamps, and other anti-poverty programs and turn them over to the states. The Center for Budget and Policy Priorities' Richard Kogan and Joel Friedman estimated that Ryan's FY2015 budget would have slashed $137 billion from food stamps, $160 billion from discretionary low-income programs, and $150 billion in unspecified cuts to mandatory low-income programs like the EITC. They estimate that block-granting Medicaid the way Ryan specifies would lead to a $732 billion cut — and then Ryan's Obamacare repeal cuts Medicaid still further. In total, the budget includes $3.3 trillion in cuts to programs for low- and medium-income people.
This is not the budget of a man committed to fighting poverty. It's the budget of someone who wants a smaller government, a lower deficit, no new taxes, and a gigantic army and has decided to make all those other promises work out by massively cutting programs for the poor. The simple fact of Ryan's budgets is that they prove he doesn't take poverty all that seriously, at least not when it collides with his other budgetary promises.
Ryan did make one excellent point during the Face the Nation appearance:
When you stack up all these anti-poverty programs on top of each other, we have this thing called a poverty trap, where we're actually disincentivizing a person from getting on with their life and going to work. It pays not to take that risk, to take a risk to go improve your life, because of the benefits you lose.
It's true — because programs like Medicaid and SNAP phase out with income, they effectively raise tax rates on the poor, which discourages work. Those rates can near 100 percent in some states, creating a trap for the poor. Reasonable people can disagree about the magnitude of this effect, but it's definitely real.
The problem is that the only way to get around this, without making programs less generous, is to make them considerably more generous. The easiest way to eliminate Medicaid's marginal tax rates would be to adopt single-payer health care. If you get the exact same health care if you make more money, the marginal tax rate imposed by a phaseout evaporates. Less dramatically, one could slow the phaseout rates. The EITC, for instance, has a phaseout rate of 21.06 percent for families with two or more children. If that rate were 5 percent instead, the problem Ryan identifies would be much less severe. But that'd cost a lot of money.
That's the basic problem Ryan — and other conservatives, like David Brooks — dance around when talking about poverty. Poverty is about not having enough money. Everything else is secondary. Ryan expresses a desire to address the "root causes" of poverty, not the "symptoms." But it's a bad metaphor. Sure, there are deeper reasons behind why certain people at certain times don't have enough money. Sluggish income growth for the working poor in recent years is the big one in the US. But you can, and should, fix poverty even if you can't fix all those other issues.
There's a lot the government can't do. It can't force poor people into marriages, for example. It can't singlehandedly reverse decades of technology and globalization-driven trends in the labor market. But it's pretty good at taking rich and middle-class people's money and giving it to poor people. And while there's much that tactic can't do, it absolutely can help people in poverty put food on the table, pay rent, and make sure they can take care of their children. It can even lift them out of poverty entirely.
WATCH: We know how to fix poverty. So why don't we?