Our welfare system began about five decades under President Lyndon B. Johnson in attempt to fight a war on poverty. Many Democrats believe that in order to improve poverty conditions, we should throw more money into welfare programs to help the poor. For example, under President Barack Obama, welfare spending has increased by 32 percent. Yet as you can see in the figure below, the poverty rate has increased slightly since President Barack Obama took office in 2008. Furthermore, the past fifty years have made it clear that increased welfare spending does not result in a decreased poverty rate.
President Ronald Reagan once stated, “Welfare’s purpose should be to eliminate, as far as possible, the need for its own existence.” Speaker Paul Ryan’s new agenda is aimed at doing exactly that. He knows that in order to actually break the cycle of poverty, we need to try something new, as the old means of fighting poverty are not working. So on Tuesday, June 7th, Paul Ryan released a 6-part agenda titled, A Better Way, which includes a comprehensive plan to fight poverty. The program will help the poor without costing taxpayers a dime. The plan will expand the American Dream by altering our current welfare system to better match individual needs while encouraging and rewarding work.
As the majority of those in poverty are unemployed, getting a job is the first step to moving out of poverty. The new program would require able-bodied and able-minded adults to work in order to receive welfare benefits. The states would be held accountable for helping welfare recipients find and keep these jobs. Under the current welfare system, it does not make sense for one to desire to work harder when if they do, they will lose a large portion of their benefits. The figure below demonstrates that as one earns a higher wage, they lose benefits and can potentially become even worse off financially than they were before. Thus, welfare is actually trapping people in poverty rather than lifting them up. To correct this, A Better Way would allow individuals to keep a portion of their benefits as they move up. This way, individuals will be better off financially even with reduced benefits.
Another issue with the current welfare system is that as the amount of people receiving welfare benefits in each state increases, that state will receive more federally funded tax dollars. Strictly speaking, states are actually benefiting from keeping the poor impoverished. To solve this issue, A Better Way would implement incentives to states that help their residents return to work or find work for the first time.
Maine recently carried out a program similar to parts of the Paul Ryan’s anti-poverty plan, as it required childless adults to work in order to receive welfare benefits. Unsurprisingly, the results have been nothing short of phenomenal. While the amount of welfare recipients decreased by 80 percent, those same adults who began working saw their income increase by an average of 114 percent. You may be thinking, “but Maine’s program only applied to childless adults rather than all work-capable adults.” Don’t worry, Paul Ryan has got that covered. A Better Way includes incentives for non-profits, such as the Boys and Girls Club, who work with local governments to offer child-support programs. This prevents people from having to choose between going to work and having their children cared for.
Over the past few days, there has been a mixed response to Paul Ryan’s anti-poverty proposal. While the Republicans have shown strong support, the Democrats are not having it.
Democratic Senator Elizabeth Warren recently bashed Paul Ryan’s plan on Facebook, stating, “it looks more like an agenda for creating poverty rather than reducing it.” However, she did not offer any factual evidence to back this claim.