By Paul Ryan
This week, our economy received some bad news: The International Monetary Fund revised its projection for U.S. economic growth this year to just 1.7%. Working families will pay the price. Real median household income is still lower than before the recession. Deep poverty in America has reached record levels over the past three years.
We need to expand opportunity in this country. And to do that, we need Washington to get its act together. Each year, the federal government spends almost $800 billion on 92 programs to help struggling families. Yet the poverty rate is the highest in a generation.
The problem with all these federal programs is that they're fragmented and formulaic. They don't see how people's needs interact. And what's worse, they measure success by how much they spend, not how much good they do. Instead, we need to measure success by results -- that is, by how many people we're helping get out of poverty.
I don't have all the answers. Nobody does. But I'd like to get the conversation going by offering an idea to repair the safety net. I'd start a pilot program, which I'd call the Opportunity Grant. It would consolidate up to 11 federal programs into one stream of funding to participating states. The idea would be to let states try different ways of providing aid and then to test the results -- in short, more flexibility in exchange for more accountability.
Participation would be voluntary; no state would have to join. And we would not expand the program until all the evidence was in. The point is, don't just pass a law and hope for the best. If you've got an idea, let's test it and see the results.
Here's how the program would work: 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 to combine things such as food stamps, housing subsidies, child care assistance and cash welfare. This simpler Opportunity Grant would include the same money as current law.
Plans would be approved on four conditions: The state would have to spend all funding on people in need. Second, the state would have to hold people accountable through work requirements and time limits for every able-bodied recipient just as there are for cash welfare today.
Third, the state would have to offer at least two service providers. The state welfare agency couldn't be the only game in town. And fourth, the state would have to measure progress through a neutral third party to keep track of key metrics.
If approved, the state could use that money to expand state programs and to partner with local service providers. Families in need would have a choice. There wouldn't just be a state agency. Instead, they could choose from approved non-profits, for-profits or even community groups unique to their neighborhood. These groups could provide a more personalized form of aid through case management.
Right now, you have to go to a bunch of different offices to enroll in a bunch of different programs, often with different paperwork requirements and eligibility standards. Under the Opportunity Grant, you could go to one office and work with one person. That person would give you financial assistance, but could also act as a personal resource. Maybe you're struggling with addiction and you need counseling. Maybe you come from a broken family and you need a network of support. The point is, you would work together to get from where you are to where you want to go.
And all this time, a neutral third party would keep tabs on each provider and its success rate, looking at key metrics: How many people are finding jobs? How many people are getting off assistance? How many people are moving out of poverty? Any provider who came up short could no longer participate. And at the end of the program, we would pool the results and go from there.
In short, we would re-conceive the federal government's role in the fight against poverty. Instead of trying to supplant local communities, the federal government would support them. Communities have to lead this effort, and Washington should follow.
This is just one idea to expand opportunity in America. In the coming weeks, I want to talk about a number of ideas that my colleagues in the House and Senate have put forward, such as reforms in the earned income tax credit, education, criminal justice and regressive regulation.
Our country has had enough of politics. Let's talk solutions.
Rep. Paul Ryan, a Wisconsin Republican, is chairman of the House Budget Committee. He will speak on poverty at the American Enterprise Institute today.