You can’t fix poverty by breaking the safety net

    Jared Bernstein Posted by Jared Bernstein.

    From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, executive director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team.

    You can’t fix poverty by breaking the safety net

    Source: CBPP

    Republican Speaker of the House Paul Ryan and Senator Tim Scott are hosting a poverty forum tomorrow for some of the R presidential candidates. In advance, they wrote a joint op-ed in the Wall Street Journal about how they’d fight poverty, and how the damn liberals keep getting it wrong (“A Republican Cure for Liberal Policy Failures on Poverty”). Jeb Bush also spoke on these issues at a recent town hall.

    Poverty’s a serious problem in America, and I of course welcome their interest. But because their diagnosis is fundamentally flawed, their prescriptions often risk increasing poverty and inequality, while restricting opportunities for millions of American children.

    Ryan’s theory of the case is that anti-poverty policy as crafted by liberals gives a person a fish, as it were, instead of teaching them to fish for themselves. He writes (with Scott) that, while safety net programs “prevent extreme deprivation,” they’re “not only putting a floor under people’s feet; [they’re] gluing their feet to it.”  Bush says, similarly, that “transfer payments to try to provide for people in poverty [are] actually putting limits on people’s possibilities.”

    The solution is…wait for it…less government (Ryan/Scott):

    “By limiting itself, government can actually expand opportunity when it gets out of the way and paves the road to collaboration—whether it’s between students and teachers, job seekers and employers, or people in need and people who can help. It is through that free, personal exchange that people learn the skills they need to succeed.”

    This is merely a gussied up version of “if your only tool is a hammer, then everything looks like a nail.” The idea, and Ryan’s budgets very much underscore this point, is that we can help the poor more by doing less for them.

    The evidence points strongly in the opposite direction. As CBPP’s Arloc Sherman noted yesterday (and Ben Spielberg and I have explained in detail), a large and growing body of high-quality research, like that described in the graph below, shows that the impact of income support and safety net programs like SNAP and Medicaid do not just occur upon receipt and immediately fade away. They have important, positive long-term benefits for children.

    Next, the idea that liberal policies have failed is belied by…you know…data. Ryan, Scott, and Bush use the badly designed official poverty measure, which fails to capture the effect of safety net programs. They then argue that safety net programs haven’t worked. An inclusive poverty measure shows that the safety net’s effectiveness at reducing poverty has grown nearly ten-fold since 1967, as Chad Stone explained today.


    OK, this next point is especially important. Bush says in a one-pager that he will eliminate SNAP (formerly food stamps), one of the nation’s most important anti-hunger programs, and replace it and other programs with block grants to states. That’s a big part of Ryan’s agenda as well.

    But when you block grant these federal programs, meaning you give states fixed funding to administer them, you tear out one of their most important functions: their counter-cyclicality, i.e. their ability to expand with need. That’s the veritable definition of a safety net program: to catch people when the market fails.

    Bob Greenstein documents why such a proposal will likely cause a reduction in food assistance, deprive SNAP of its important countercyclical properties, and increase poverty. The figure below tells a compelling part of that story. It shows how two anti-poverty programs responded in the last recession: SNAP—not a block grant—and TANF, which was block granted in the mid-90s. SNAP worked as it was designed to, expanding to catch those knocked out of work in the downturn. TANF hardly budged.

    Source: CBPP

    Basically, these guys want to turn SNAP into TANF.

    Ben S and I will have a longer piece out early next week when we hear what more these politicians have to say at their forum. And as I suggested, we’re wide open to good ideas (they’ve shown interest in expanding the EITC for childless workers, for example). But as it stands, my concern is that want to fix poverty by breaking the safety net. And that’s a really bad idea.