Innovation

Speaker Ryan’s Promising Vision for A Better America

Eighty federal welfare programs have been established to combat poverty. Government spending on programs for low-income people has risen by more than 7 percent per year in the past decade. Trillions of dollars have been spent since President Johnson declared the ‘War on Poverty’ in 1964. Yet the actual poverty rate has not budged at all, and the cost of current government efforts is only predicted to rise in the coming years. Even the Republican-led 1996 welfare reform, the Temporary Assistance to Needy Families Program, has languished due to the states’ lackluster efforts to engage recipients and enforce basic requirements. The welfare system is broken and needs serious reform.

This month, Speaker Paul Ryan (R-WI) launched “A Better Way,” which offers major improvements to the welfare system by applying free market principles to welfare programs. This will foster an environment of innovation and competition, and put America on the path to achieving a more desirable outcome at a lower cost for all.

Speaker Ryan’s plan offers several promising improvements to the current welfare system. For one thing, much of the state and local welfare spending is subsidized by the federal government. This lowers incentives for states to properly engage with recipients and make an effort to move them off welfare. By lowering the federal match rate, states would be more encouraged to quickly help recipients succeed. Another policy recommendation is to implement Social Impact Financing. Under SIF, the government would only pay for programs that actually reach a desirable outcome and succeed by lifting more people out of poverty. If the outcome is not achieved, then the government will not reimburse the private investors that originally funded the program and the states would be held more accountable. This would ensure that taxpayer dollars would be spent wisely, rather than allocating these dollars to programs that do not meet their expectations.

The current federal welfare system, which has more than 80 programs, results in a complicated web of wasteful duplication and overlap. The current federal guidelines are too rigid and do not allow for the amount of flexibility needed by the states to properly meet the diverse needs of individuals. State and local governments know what is best for their residents, and by opening more effective channels of communication between the various programs and streamlining the process, peoples’ needs will be met more quickly, efficiently, and at a lower administrative cost for the government. Federal guidelines should also promote the expectation of work and consolidate programs that are similar. This will not only save taxpayer money, but also strengthen the current programs by leveraging more power to the state and local governments.

Speaker Ryan’s vision also stresses the importance of data gathering. How can the government know if certain programs are successful without first gathering sufficient data and then disseminating the relevant information to the agencies and groups that need it most? But perhaps the first order of business is to change the definition of success itself – it should not be how the federal government currently defines it as, which is the amount of money spent on a program or the amount of people enrolled. Rather, success should be defined as the number of people that move off welfare and enter the labor force in the long-term. And it is clear the majority of programs are not successful. For every $100 spent on welfare, it is estimated that less than $1 is spent effectively. Barely any comprehensive reviews are even conducted of programs, and when they are, the majority of federal social programs are found to have no positive effects.

Calls for an increase in the minimum wage and more government spending conflict with the proven success of free market principles and limited government, yet the former are typically held in higher regard among most workers. Speaker Ryan’s vision for “A Better Way” seeks to spread the ideals of liberty and federalism by carefully explaining the application of these principles on the welfare system. These values will create more opportunities, reduce individual dependence on welfare, and ultimately result in a freer and more desirable society for all.


In Depth: Innovation

Whether improving processes, creating products or developing new ideas, the application of technology can enable real changes in how state government works, both in quality of services delivered to constituents, cost savings and quality of life. States have the opportunity in our national balance of government power, to address policy …

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