Really? No Benefit Cuts?

Suzy Khimm questions how Paul Ryan’s anti-poverty plan will pay for itself without them:

While Ryan says his plan is budget neutral, it does not appear to account for the additional cost of hiring case managers, imposing new work requirements, and creating a new bureaucracy to administer them. That could mean less money for benefits and more for services to administer them, said Donna Pavetti of the Center on Budget and Policy Priorities (CBPP). “There are things about it that sound good, but when you get to the reality of it, it just falls apart,” she said, adding that federal agencies have often struggled to allocate limited resources to staffing and find enough skilled case workers.

“This individualized case management, the work requirements – all of that is really resource intensive. How you’d do that without pulling from resources that help people meet their basic needs?” said Pavetti, CBPP’s vice-president for family income support policy. She points to a state-level program called Building Nebraska Families, which proved effective at moving more welfare recipients to work through intensive home visits, but which was also costly, averaging $7,400 to $8,300 per participant.

In a more comprehensive critique of the plan, Pavetti faults Ryan for ignoring the tradeoffs and limitations it implies:

The case of “Steven,” whom Ryan also highlights, makes the point as well.  A single 19-year-old non-custodial father, Steven is jobless and needs help to get off drugs.

Ryan’s proposal indicates that the Opportunity Grant would help him get drug treatment, move him into transitional housing (a form of subsidized housing), and get him help with attending parenting classes, finding work, and pursuing further education. These are all needed services, and limited funding keeps many people, particularly adults not living with children and who have the same needs as Steven, from obtaining that help.  But the Opportunity Grant structure would not provide additional resources (and as my colleague Robert Greenstein points out, could well provide fewer resources), so the only way to provide this richer set of supports for Steven is to cut the help that other families receive.

Running down how Paul Ryan proposes to keep the plan revenue neutral, Chuck Marr criticizes the cuts he would make to existing programs:

First, he would pay for it in part by eliminating the refundable part of the Child Tax Credit for several million children in low-income immigrant working families, including citizen children and “Dreamers,” thereby pushing many of them into — or deeper into — poverty. He would also eliminate the Social Services Block Grant, a flexible funding source that helps states meet the specialized needs of their most vulnerable populations, primarily low- and moderate-income children and people who are elderly or disabled.  (This program provides the kind of services and state flexibility that Ryan says we need more of when he promotes other parts of his plan that would enable states to cut food stamps and rental assistance and shift the resources to services.)

Also among the programs that Ryan would end is one that provides fresh fruits and vegetables primarily to children in schools in low-income areas.  By contrast, the President would pay for his EITC expansion by closing tax loopholes for wealthy taxpayers.

In Jared Bernstein’s take, the plan is a potentially costly solution in search of a problem:

The broader reason his plan is misguided is because Ryan starts from the mistaken assumption that the current U.S. anti-poverty system is broken, when in fact it’s actually quite effective, and not just in lowering market-based poverty rates, which it does by almost half, but also by investing in the longer term well-being of its beneficiaries. (Bob Greenstein provides the details here.)  That’s not good enough by a long shot, but neither is it motivation to radically change the system in ways that introduce a dangerous set of new risks, as this new plan does, I fear. …

The implication here is that while a faceless bureaucrat in D.C. can’t possibly evaluate your nutritional needs, for example, a bureaucrat in Albany or Sacramento can easily and efficiently do so. And while the plan requires state officials to use the resources for poverty reduction, and not, say, tax reduction, consolidation also raises serious risks of diverting funds to areas of anti-poverty interventions that state officials favor vs. areas of need.