Each state that wanted to participate would submit a plan to the federal government. That plan would lay out in detail the state’s proposed alternative. If everything passed muster, the federal government would give the green light. And the state would get more flexibility; it would get to combine into one stream of funding up to eleven different programs—things like food stamps, housing assistance, child care, cash welfare. This new, simpler stream of funding would become the Opportunity Grant, and it would be budget neutral. The state would get the same amount of money as under current law—not a penny less.
In effect, the state would say, “Give us some space, and we can figure this out.” And the federal government would say, “Go to it—on four conditions”: First, you’ve got to spend that money on people in need—not roads, not bridges, no funny business. Second, every person who can work should work. Third, you’ve got to give people choices. The state welfare agency can’t be the only game in town. People must have at least one other option, whether it’s a non-profit, a for-profit, what have you. And fourth, you’ve got to test the results. The federal government and the state must agree on a neutral third party to keep track of progress. That’s the deal.
There is much more here. I will read it and get back to you. Meanwhile, some first thoughts:
1. Devolving responsibility to the state level is a very defensible idea. The most-admired welfare states, from Sweden to Singapore, are much smaller than the United States.
2. My initial reaction to this is much more favorable than my initial reaction to “Room to Grow.” “Room to Grow” involved too much political positioning and gesturing for my taste. Instead Ryan’s proposals are designed to repair a set of programs that have become incoherent, rigid, and dysfunctional.
One would think that the first thing you could do to fight poverty would be to stop importing poor people. The I-word did not appear once.
“Room to Grow,” and the rest of the Reform Conservativism movement, is not really about addressing poverty, as valid a goal as that is, but about addressing the distress of the middle class and upper working class — people who, unlike the vast majority of the poor, are potential Republican voters. So comparing Room to Grow with Paul Ryan’s politically irrelevant anti-poverty agenda is comparing apples with oranges. One thing that the corporate/free-market/libertarian elites seem to have in common with “progressive” elites is an utter contempt for the middle class and its problems.
It’s a good point that running welfare in the states sounds interesting.
In all sincerity, what is stopping them? If New York wants to have a public health service that gives a certain low guaranteed health care to everyone, can’t they just pull in the taxes and start offering the programs? What will the feds realistically do if New York were to try?
What would an Economist says about the fungibility of money in regard to this ‘condition’, “First, you’ve got to spend that money on people in need—not roads, not bridges, no funny business?”
That will ensure the state does not pay a dime less than the federal grant money on helping people in need, but it does nothing to ensure it does not set off what would have been countefactual state spending on those people and diverts it instead to … roads and bridges and so on.
Overturning the ban on state durational residency requirements for welfare benefits (for instance as held in Shapiro v. Thompson) would go a long way to making states willing to experiment and even be more generous in certain cases. As it is, fear of the welfare magnet effect that is a consequence of the Court’s holding is very discouraging of innovation. It also creates the possible perverse incentive in which in the name of ‘experimentation’, hard-up States actually develop plausibly deniable and strategic ways to encourage their welfare cases to emigrate and move to other states.
It seems like “anti-poverty” must not mean anti-poverty considering we still have tons of poverty. Paying for poverty should get more poverty. In fact, what if a state had a magic bullet at fixing poverty. Then all the poor should move to that state and the poverty should skyrocket and we should all rejoice. But that isn’t going to happen. So how do you structure incentives like how we wish healthcare incentives were structured but aren’t?
Federalism of that nature (where the funds come from the feds and are spent by the states) has kind of a mixed track record in my experience. The problems I see are that state governments have any number of means to redirect the funds away from their intended purpose, state governments don’t seem as concerned about spending the money wisely since it doesn’t come from the taxes they impose, and the federal agencies handing out the cash don’t really seem inclined to hold anyone’s feet to the fire on either of the former issues. Their only real leverage is is to threaten to turn off the spigot, which would of course hurt the intended beneficiaries of these funds (ie, the poor), which they don’t want to do, so they’re basically toothless.
I’m thinking of Medicare vs Medicaid here, since that’s my area of expertise. Medicare is, of course, a disaster zone of waste, fraud, and abuse, but bring Medicaid reimbursement rates in line with Medicare, and it’s just as big of a mess, if not more so. And with Medicaid, the situation is potentially even worse because in relatively poor states like Alabama, where most of the funding comes from the federal level, states arguably have a disincentive to reform the program in a way that reduces spending because for every one dollar you save in state funds, you’re losing two or three federal dollars. Don’t think for a second that state governors and agency directors don’t know that, and a kind of block grant system which Ryan has proposed in the past probably makes that problem worse.
One part that worries me is ‘passing muster’. Seems like yet another way for Federal government to auction off rent-seeking power.
Daniel Hannan wrote in his book how localism does help keep the very important shame/gratitude-for-help feedback loop in a welfare system because it’s your neighbors who you depend on and have to look in the eye. However, when funds are sourced from the Federal government, even the local administrators don’t have much incentive to keep those feedbacks in place.
What good is getting ahead if it requires a Masters’ Degree or a 20-year-internship or a suit that we’ve got
to constantly polish and check the oil on. Dennis Rodman,Dominique Wilkins, Karl Malone, Jerry Stockton. Sometimes you can see them in a few roles each year
and rarely, if ever, do they choose to take a lead role and even when they do they usually end up back in the supporting roles where they are most comfortable.
Self-assessment of problem areas of your life is the first step. A conclusion eliminated is undoubtedly an opportunity skipped when it comes to personal development. s approval first before we can consider ourselves a success.