Speaker of the House Paul Ryan (R-Wisc.) vividly illustrated how current entitlement programs are hurting low-income families by effectively taxing their work at high rates and keeping them from rising above their circumstances.
During Tuesday night’s solo town hall discussion on CNN, Ryan highlighted his journey over the past four years, visiting high-poverty areas around the nation to learn how best to address poverty. One problem Ryan highlighted what he called “benefit cliffs.”
“Right now, you stack all these welfare programs on top of each other and it basically pays people not to work,” he said. “So you know who is the highest tax rate payer? It’s not [CNN anchors] Anderson Cooper or Jake Tapper. It is the single mom with two kids making maybe — earning $24,000 who will lose 80 cents on the dollar by taking a job or getting a raise because of all the benefits she loses.”
“So what happens is, we disincentivize work,” Ryan continued. “We need to taper those benefit cliffs, customize welfare benefits to a person’s particular needs, and encourage work.” Ryan suggested adding work or job training requirements, and advocated customizing benefits to better address individuals’ problems, such as addiction, education or transportation.
Ryan said the nation’s existing anti-poverty policies undermine the American idea that the circumstances of one’s birth should not determine the outcome of one’s life. He referred the audience to the website, www.better.gop, which outlines an alternative agenda that better structures policies to reward work and empower upward mobility.
“So you know who is the highest tax rate payer? It’s not [CNN anchors] Anderson Cooper or Jake Tapper. It is the single mom with two kids…”
This message should help conservatives frame their thinking on current public policies, which tax work and subsidize unemployment. As a better alternative, Republicans and some Democrats have called for an expansion of the earned income tax credit (EITC), which rewards rather than penalizes work and is a much more effective way to alleviate poverty than raising the minimum wage. Unlike the minimum wage, the wage support from EITC is laser-focused on helping low-income families rather than wealthier ones.
A recent Congressional Budget Office (CBO) report illustrates that a minimum wage hike is at best a scattershot approach to fighting poverty. Its analysis showed that by raising the current $7.25 minimum wage to $10.10 per hour, not only would policymakers effectively destroy half a million jobs, they would enrich wealthier families (those making three times the poverty threshold, or nearly $75,000 for a family of four) more than poorer families. Concerned taxpayers who want to help the poorest among us would understandably support an EITC expansion over a minimum wage hike. From CBO:
“The increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, by CBO’s estimate. However, those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families. Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates.”
Ryan’s town hall response on poverty was to a question from a Catholic priest, who asked how Americans can better serve the poor and treat immigrants with civility.
“I think there are ways of helping people get right with the law that don’t involve violating the rule of law or committing something like an amnesty,” he said. “There are ways of getting people right with the law so that they can earn their place without rewarding people or rewarding people for cutting in line. And that, to me, it’s a longer conversation I’m happy to get into. I think there’s a way of doing this.”
“I think there are ways of helping people get right with the law that don’t involve violating the rule of law or committing something like an amnesty.”
In response to a question about the Black Lives Matter movement, Ryan cited his former mentor, Jack Kemp, who offered a better alternative to the divisiveness unfolding from all sides in communities across the country.
“I believe we need to be inclusive and aspirational,” Ryan said. “That means talk to virtues within people, prey not on darker emotions, but prey on what unites us. That means reject identity politics in every way, shape or form… And I would argue that the left basically perfected identity politics. It’s very effective, but it’s very divisive, and we on the right should not come anywhere close to it. I believe in inclusive, aspirational politics that speaks to our common humanity, that speaks to the principles that unify us, and that to me is the kind of leadership that people in this country are begging for that we are endeavoring to try and offer.”
Cross-posted from OpportunityLives
Carrie Sheffield is the founder of Bold. She is passionate about storytelling to empower and connect others. A founding POLITICO reporter, Carrie contributed on political economy at Forbes and wrote editorials for The Washington Times. After earning a master’s in public policy from Harvard University, she managed credit risk at Goldman Sachs and researched for Edward Conard, Bain Capital founding partner and American Enterprise Institute scholar. She earned a B.A. in communications at Brigham Young University and completed a Fulbright fellowship in Berlin.