ConservativeHome's The Republican

The poverty rate under Obama, the community organizer, is at a historical high

Ryan Streeter
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I’m sure Obama will blame this on Bush, but here’s the stark reality: the poverty rate in America spiked to 15.1% this year. This is the highest the rate has been since 1993.

The numbers for minorities are especially bad. The Washington Post reports:

The poverty rate for Hispanics climbed to 26.6 percent from 25.3 percent, and for blacks it increased to 27.4 percent from 25.8 percent. For whites, the poverty rate in 2010 was 9.9 percent, a half percentage point increase from the previous year.

Here’s the statistic, though, that really caught my eye:

The black child poverty rate climbed to 39 percent, while the Hispanic child poverty rate reached 35 percent. The white child poverty rate was 12.4 percent.

Look at those variances.

We got hammered in the Bush administration for poverty rates much lower than this, and we never blamed Bill Clinton. Minority poverty rates are skyrocketing under Obama.

The Obama Democrats have lost all ability to connect their actions with the political economy all around them. The days of the creative solutions of the Democratic Leadership Council and Progressive Policy Institute are behind them. Unable to recognize how their own stimulus spending, health care boondoggle, and pervasive threat to increase regulations and tax rates discourages employers from hiring, they are left scratching their heads about why the poverty rate is climbing. They are also unable to recognize the systemic distortions in our education marketplace make us less competitive (they are too busy worrying about providing funds to their unionized special interest friends).

They know how to provide support through redistribution, but they seem completely unaware of how to address the underlying conditions of poverty. These are undoubtedly tough economic times, but unfortunately, Obama and his team will continue to see no relation between their actions and the economy - and therefore their actions and rising poverty.

In historical terms, the poverty rate is still not as bad as it has been. But it's clearly at a post-War on Poverty high.

The following chart from Dan Mitchell provides some perspective on when poverty rates have declined and risen.

Welfare reform worked: And has pointed the way to other challenges - such as welfare-like behavior in the middle class

Ryan Streeter
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Megan McArdle has had two good posts (here and here) the past couple of days on whether welfare reform worked.

Her first post is a good rebuttal to a recent claim by Ezra Klein that welfare reform hasn't really helped poor families. Decreasing dependency, as she shows, has been a success worth the effort.

In the second post, it wasn't her focus to draw our attention to the out-of-wedlock childbearing rates of women in their 20s and 30s when she included the following chart. Rather, her point was to show that the group targeted by welfare reform - teens who were having babies and then not working - has seen a drop in unmarried childbearing since welfare reform. Cleary, that's a good thing.

The other numbers are what are even more astonishing, in my view. Of course, one can argue that unmarried mothers who are older and have been working to some degree can provide a better life for their children. This is undoubtedly true.

But it's also true that a growing number of children born in the lower middle class are born to unmarried mothers. Charles Murray's latest research has shown just how dramatic the rise in single parenting has been among lower middle class homes in the past generation.

Some important percentage (I don't know what it is) of the births out of wedlock among the 20- and 30-somethings in the chart above are to women who, though not in poverty, will raise children who will start out life at a serious disadvantage.

This population by all accounts is growing enough to present a real challenge to policymakers. With welfare, we could change incentives in welfare programs. With a growing group of broken homes sitting above the boundaries of official poverty, the policy levers at our disposal are much fewer.

This problem, and not poverty per se, will be the big social policy challenge of the next generation.

Happy 15th anniversary, welfare reform: Amazing how easy it is to forget that historic achievement in 1996, isn't it?

Ryan Streeter
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If Jim Jordan, Chairman of the Republican Study Committee, hadn't sent out a message in honor of the 15th anniversary of the historic welfare reform bill of 1996, I would have missed it.

Which is pretty pathetic given that I cut my teeth in domestic policy in the wake of welfare reform in the 1990s and worked on the reauthorization of the bill while working in the Bush White House.

But in my defense, the anniversary hasn't exactly been on the frontburner in the news - which raises a related point. Extending welfare reform to most of the government's anti-poverty programs was a significant portion of the Ryan budget, and yet it, too, has received very little attention.

I think this shows how much welfare reform has gotten into the American bloodstream, and - more importantly - how small the issue seems compared to the entitlement reform in the budget.

Remember the images of poor children living on the streets and all of the controversy surrounding the bill, which many consider the main achievement of the Republican revolution of 1994?

All that pales in comparison to the consideration of having your Medicare benefits altered - doesn't it?

Given the far-reaching entitlement and tax reform aims of the GOP budget, no one has paid any attention to the welfare reform provisions in it.

Here is the text of Jordan's email:

15 years ago today, Congressional Republicans and President Clinton enacted welfare reforms that emphasized work as the path out of welfare dependence. That 1996 law replaced an older program with the Temporary Assistance for Needy Families program, also known as TANF. Clinton famously declared these changes would “end welfare as we know it,” and in fact millions of families have moved off TANF and into jobs and self-sufficiency. Despite these successes, more remains to be done.
 
According to a government report released this year, less than a third of work-eligible TANF recipients are actually meeting the program’s work requirements. More than half perform no work or job preparation at all. And while the 1996 reforms focused on TANF, there are actually more than 70 different federal programs that exist to provide assistance to low-income Americans.
 
That’s why earlier this year, members of the Republican Study Committee introduced H.R. 1167, the Welfare Reform Act of 2011. Our proposal builds on the reforms of 1996, applies new work requirements to the food stamp program, forces Washington to give taxpayers a clear picture of how much money they spend across all the different welfare programs, and returns the skyrocketing cost of welfare to its prerecession level once our economy has recovered.
 
I’ll close this week’s message with thoughts from two men who spent much of their careers focused on the issue of welfare:
“We should measure welfare's success by how many people leave welfare, not by how many are added.” – President Ronald Reagan

“We must preserve not only the bodies of the unemployed from destitution but also their self-respect, their self-reliance and courage and determination.” – President Franklin Roosevelt

In other news: The UN Millennium goal to halve global poverty was reached 3 years ago through globalization

Ryan Streeter
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This is incredible. Read this passage from an article by Laurence Chandy and Geoffery Gertz at Yale Global Online:

Today, we estimate that there are approximately 820 million people living on less than $1.25 a day. This means that the prime target of the Millennium Development Goals – to halve the rate of global poverty by 2015 from its 1990 level – was probably achieved around three years ago. Whereas it took 25 years to reduce poverty by half a billion people up to 2005, the same feat was likely achieved in the six years between then and now. Never before have so many people been lifted out of poverty over such a brief period of time. (emphasis added)

The article makes the case that "the rise of globalization, the spread of capitalism and the improving quality of economic governance...together have enabled the developing world to begin converging on advanced economy incomes after centuries of divergence."

The authors go on to write:

The fight against poverty has long been a moral and strategic goal of Western governments. But the record of the last few years is likely a surprise to them. In their eyes, the fate of the world’s poor largely depended on forging progress on three fronts: debt relief, more aid and freer trade.

But lo and behold, these goals were formed during an era when economic growth in the developing world was around 1, maybe 2, percent per year. Since 2003, developing world economy's have broken onto the stage of global trade, investment, and productivity, and they've been growing at around 5 percent.

Now that's some great news we've heard nothing about.

Here's the news in graph form:

h/t to Don Eberly for sending the article.

The letter Catholic academics sent to Boehner on poverty was misguided and unfortunate

Ryan Streeter
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John Boehner gave the commencement address at Catholic Univeristy today.

His speech was preceded earlier this week by a letter from numerous Catholic academics criticizing Boehner for "imperiling" programs for the poor.

It is unquestionably within the prophetic scope of religious leaders and intellectuals to challenge politicians on matters of social justice. The problem is that the letter in question uses qustionable judgment.

Defending programs that aren't too defenisble. There is only one real presupposition at work in the letter: public expenditures on poverty programs is inviolable. This, unfortunately, has a very weak empirical basis, and academics should know better. In the age of welfare reform, it's common to think we've been stingy on poverty programs, but the truth is that our spending in this area has been growing rapidly. And has it prevented poverty or demonstrated efficacy in lifting people out of poverty who have the ability not to be poor? Defending programs simply because they are "poverty programs" is indefensible. The authors of this letter take no steps to say why programs they want to put in "the circle of protection" are effective or necessary, or at least why they deserve funding at whatever the "right" level is.

Tone deaf on poverty. There's no definition of poverty in the letter. The authors just assume that government programs that say they help the poor do just as they say. But we know a lot more about poverty than when these programs were launched over 40 years ago. Out of wedlock childbearing, educational failure, a culture of non-work....these are empirically more responsible for poverty than the problems (lack of food, adequate housing, and so on) that most federal anti-poverty programs were designed to address. They preach Catholic social doctrine, but surely the Church has something to say about family breakdown and the importance of learning. Making Catholic social teaching subservient to whatever the U.S. federal government has decided is the right course of action is silly.

Fiscally weird. Citing a statement by Christian leaders to create a "circle of protection" around poverty programs, the letter says, "The statement of these Christian leaders recognizes the need for fiscal responsibility, 'but not at the expense of hungry and poor people.'" So does the Church advocate mortgaging all of its properties to spend more on its programs for the poor? How about asking parishoners to take out home equity loans and give the entire sum to the Church's anti-poverty programs? Or, why not install a credit card machine in the local parish church and ask people after mass to stop by and max it out in a contribution to the church's program for the poor? Why in the world would Catholic public intellectuals insinuate that continued debt financing is just fine so long as it's in the service of anti-poverty programs?

Ultimately, the authors of this letter were just plain lazy. They are stuck in a Great Society era with no clue, it appears, about how the world is changing. I support academic tenure, but this letter reads like it was written by a bunch of tenured professors who haven't given a thought in 30 years to what poverty is and how we should fight it.

Boehner was right to dust it to the side and just continue with his plans.

The percentage of able-bodied men working in America is lower than it is in Europe: two important points about this disquieting trend

Ryan Streeter
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David Brooks’ column today focuses on a topic that Ron Haskins talked about last week here at ConservativeHome: the declining percentage of able-bodied men who are actively working.  

Haskins says he “is really concerned about this trend.” Brooks says it is “a big problem.” They’re right. It’s a very disquieting trend.

As Haskins points out, it’s been underway for three decades, long before our latest recession. As Brooks points out, the percentage of working-age men who are not in work now stands at 20 percent. As they both point out, the American ratio of people of working age who are in fact working has long been higher than the European ratio, but that has now flipped. The ratio is higher in Europe.

This is especially troubling because the problem is structural, not cyclical, as Brooks says. Men with lower education levels are increasingly out of the work force. They are less interesting to employers. They become detached. That leads to more problems, and so on. Brooks calls this population the “missing fifth.”

There are two important points worth addressing here:

The first is that we don’t have a public policy response ready-made for this.

Brooks writes:

It can’t be addressed through the sort of short-term Keynesian stimulus some on the left are still fantasizing about. It can’t be solved by simply reducing the size of government, as some on the right imagine.

It will probably require a broad menu of policies attacking the problem all at once: expanding community colleges and online learning; changing the corporate tax code and labor market rules to stimulate investment; adopting German-style labor market practices like apprenticeship programs, wage subsidies and programs that extend benefits to the unemployed for six months as they start small businesses.

While it’s unclear how well these would work, since some aspect of this non-work trend is cultural, they certainly would be better than what we’re doing now.

The second important point is that our current entitlement problem means we have been shifting resources to support better-off, older portions of our population at the expense of the young – and, especially, this non-working population.

We’ve been making this point at ConservativeHome for awhile, namely that there’s something wrong about shifting resources through our entitlement programs to the affluent at the expense of poorer Americans.

Brooks makes the point with a closing rhetorical question:

The next time you see a politician demagoguing Medicare, ask this: Should we be using our resources in the manner of a nation in decline or one still committed to stoking the energy of its people and continuing its rise?  

Americans depended more on government assistance in 2010 than at any other time in US history

Natalie Gonnella

A new analysis of census data by USA Today reveals that nearly one-fifth of the nation's total personal income was made up of government payments in 2010, the highest proportion ever since the US began keeping track in 1929.

According to a summary of the study by Dennis Cauchon:

A record 18.3% of the nation’s total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs in 2010. Wages accounted for the lowest share of income — 51.0% — since the government began keeping track in 1929.

In comparison to previous decades, USA Today's latest study also shows that:

From 1980 to 2000, government aid was roughly constant at 12.5%. The sharp increase since then — especially since the start of 2008 — reflects several changes: the expansion of health care and federal programs generally, the aging population and lingering economic problems.

Total benefit payments are holding steady so far this year at a $2.3 trillion annual rate. A drop in unemployment benefits has been offset by rises in retirement and health care programs.

Americans got an average of $7,427 in benefits each in 2010, up from an inflation-adjusted $4,763 in 2000 and $3,686 in 1990. The federal government pays about 90% of the benefits.

When broken down by state, in 2010 New Yorkers received more in government aid than anywhere else in the US, with state Medicaid costs escalating the "average total of all government benefits in [the state] to $9,442 per person." Cauchon also notes that New York spent nearly $3,000 on Medicaid per person, equalling "a third more than any other state (the U.S. average is $1,364. Nevada spent the least: $666 per person.)"

Interestingly, the ten states who paid the highest amount in transfer payments per person in 2010 were all lead by Democratic governors.

Other key findings across the country include:

• West Virginia: The state gets 28% of its income from government programs, more than any other state. The state's residents are the second oldest, after Florida's, and 20% collect disability.
• Colorado: Residents get the least — 13.2% of income from social programs — and far below the U.S. average of 18.3%.
• Utah: Residents get the fewest dollars — $4,731 per person in 2010. The state, which has a young population, ranks low in dollars per person from Social Security, Medicare and Medicaid.

The full details of USA Today's latest analysis can be viewed here and here.

Four key issues separating how conservatives and liberals view poverty, the loss of opportunity, and what we should do in response

Ryan Streeter

Whether we recognize it or not, we as a country are engaged on the front end of what will be a protracted debate about the purpose of government.

Post-2008 Democratic overreach, the November elections, the spending debate, and our deficit debate – underneath all of this is a fundamental disagreement in America about the right role and purpose of government.

It seems that history has passed by the public institutions we spent so much time and money creating.

This can be seen perhaps most acutely in how we as a nation deal with poverty and the loss of opportunity in our most fragile communities.

The outdated nature of our welfare state is an underlying theme of three posts we ran this week in conjunction with The Clapham Group.

Tevi Troy’s essay showed just how outdated our poverty establishment is. While dropping out, out-of-wedlock childbearing, and poor levels of work preparation and attachment are driving poverty, our institutions focus on myriad other problems.

Jedd Medefind reinforced a key point that Tevi made: when it comes to the most vulnerable among us (orphans), our mass solutions have failed. Success comes at the micro-level by focusing on the individual, families, faith communities, and community. This creates challenges for policy and government.

Mark Rodgers kicked off the week by pointing out that it’s time to reformulate what it means to promote opportunity among the poor and disenfranchised. Very little that we are doing seems to be working.

We live in the 21st century with 20th century programmatic responses to vexing problems such as the sources of joblessness, educational failure, and criminality.

As conservatives and liberals debate stagnation, the loss of opportunity, and poverty, it's worth looking at four key differences in how they view these issues: the nature of the safety net, who's responsible for poverty, how we define "justice," and who controls what's possible under our various policy responses.

1. Safety net – what is it?

Left: Money-based, need-based. The left prefers large programs, large income transfers, with little variation in services. This explains everything from the Left’s advocacy of Head Start to ObamaCare.

Right: Community-based, expectation-based. Public funding should not be tied to some ideal amount, but to high standards that communities help define and meet. Service quality will vary by community, which is a good thing. Poor performers get less, not more, future help.

2. Agency – what is the prime mover of poverty?

Left: Circumstance. Institutions, discrimination, the inherent unfairness in market economies are most responsible for people’s poverty. Changing institutions is the solution.

Right: Behavior.  Culture matters more than institutions (e.g., families in a community affect behavior more than “the system” or employer discrimination).  Individual choices, embedded in communities as they are, open up or close down opportunities. Tying consequences to behavior is a key ingredient in overcoming poverty.

3. Justice – how do we define fairness, equity?

Left: Restrain the upper class. Making the “rich pay” is key, since they are part of the system that they rig to their advantage. This is just and fair.

Right: Elevate the lower class. Removing the barriers to upward mobility and allowing people to advance as far as they can on a merit basis is just and fair. Restraining the upper class in various ways, while not inherently unconservative, does little to remove barriers to the lower class and is therefore not all that related to justice in this regard.

4. Options – who defines what is possible under a given policy?

Left: The designers. The left trusts the experts, the bureaucracy. Liberals don’t really expect ordinary people to make the best choices for themselves. This explains their defense of unions, government workers, regulators.

Right: The doers. Conservatives trust parents to choose schools, patients their doctors, families their insurance providers. Not everyone will choose well. But this is one way of tying consequences to behavior (see Agency above).

The movement, or party, that wins the public's heart and mind in these four areas will have the most success implementing its anti-poverty agenda.

Five questions for liberals who pretend to be poor families' best friends but in reality are their worst enemies

Ryan Streeter

For years now, we have understood that poverty is much, much more than material deprivation. But we haven't been able to update our policies to make them current with what we know.

Poverty isn't just the absence of money. It's the absence of parenting, education, self-determination, and a few other intangibles. The tricky thing about the absence of money is that it is often the symptom of a deeper cause that is much more difficult to isolate and address.

Tevi Troy, in a second post in a series, boils down the poverty equation today, based on the work of Ron Haskins and Isabelle Sawhill. If you don't work at an entry level, don't finish high school, and have a child out of wedlock, you will be poor unless you get really lucky.

The trouble with poverty today is that the ability to understand and grasp the anti-poverty equation comes from sources - family, neighborhood, church, school, friendships - that government has a hard time affecting.

This raises some pertinent questions for liberals:

1. Do we really think that block-granting Medicaid to states is such a bad thing? There is no evidence that limiting spending and giving flexibility to states is going to cause a health coverage crisis. Running the program from Washington has created massive waste and inefficiencies. Putting states in charge allows them to adapt coverage to the needs of the communities which they know better than Washington.
2. How is protecting teacher unions and resisting education reform good for poor children? There is no evidence whatsoever that anything liberals are fighting for in education is good for the poor. This will, someday, be remembered as the greatest scandal of our day.
3. How is protecting the status quo in entitlements good for the poor? If they are to make it to the middle class, then Democrats are lower income families' worst friends. Anyone with ambition and a sense of hope will find their taxes insufferably high if they escape poverty, given the Left's determination to raise taxes rather than get serious about shrinking government costs.
4. Why do you resist the consolidation of numerous duplicative programs, such as Tevi Troy points out? Republicans have no constituencies in all of these programs. Liberals keep the poverty machine, job-training, teacher-training, and all varieties of special interest poverty programs afloat. Is there any evidence that consolidating, shrinking, and block-granting most programs would be any less effective than they currently are?
5. Why do you resist, against all the evidence, the claim that intact families are the biggest single poverty solution we know? It's utterly stunning how the Left is in denial about one of the most rock-solid pieces of social science research in the past 15 years. The Left loves to deride "creationists" and global warming skeptics as insufferable neanderthals, and yet they pretend the science about family health and formation doesn't exist. 

Conservatives have an opportunity to change the discussion about poverty, hope, opportunity and reform in America. Keeping these questions in mind will help somewhat along the way.

Freshman Congressman Tim Scott weighs in on his support for the Welfare Reform Act of 2011

Natalie Gonnella

Earlier in March, Congressman Jim Jordan spoke with ConservativeHome's Ryan Streeter about the recently introduced Welfare Reform Act of 2011, which "builds upon the successful 1996 welfare reform effort, which focused on only one of 77 welfare programs, by extending the same work-oriented policy to other means-tested federal programs."

In a statement on Friday via his congressional website, freshman Representative Tim Scott, who has signed on as a principal cosponsor of the legislation, discussed his own support for the bill and its "smarter approach to [breaking] the cycle of poverty."  Here's what Congressman Scott had to say:

I am proud to be a principal co-sponsor of the Welfare Reform Act of 2011 and will work with my colleagues to see this measure advance through the House.  This legislation builds upon the success of the 1996 reform that utilized a work-oriented policy to establish Temporary Assistance to Needy Families (TANF), by expanding it to the Food Stamp program.  It also requires full disclosure of welfare spending totals in the President’s Budget. 

In addition to implementing a spending cap at the level of 2007, the bill offers incentives for states to increase self-sufficiency with a grant program, funded through other spending cuts contained therein, to reward them for the number of families determined to be above the poverty line.  I fully recognize the number of Americans currently struggling to escape the bonds of poverty, and as such, emphasize that the spending caps contained in this legislation become effective on the first fiscal year after the unemployment rate is 6.5% or less. 

We have seen welfare spending continue to rise dramatically, while the number of Americans living at or below the poverty level increases. Programs such as those contained in the Welfare Reform Act of 2011 seek to break the cycle of poverty and offer a path to self-reliance, and with it, self-respect