To his credit, House Budget Committee Chairman Paul Ryan (R-Wis.) is trying to start a conversation about poverty. The test of his seriousness will be whether he ends up talking about spending. On March 3 he issued a lengthy study evaluating the U.S. welfare state that was refreshingly free of the hyperbolic rhetoric that marked his 2011 Path to Prosperity budget (that’s the one that claimed the U.S. was “on the brink of bankruptcy”).
For Ryan, federal antipoverty programs suffer from two main defects. The normative problem is that many programs “penalize families for getting ahead.” Financial aid is withdrawn, sometimes abruptly, as family income rises. “The complex web of federal programs and sudden drop-off in benefits create extraordinarily high effective marginal tax rates,” the report notes, “which reduce the incentive to work.” Practically speaking, there is a confusing maze of programs with too little evaluation of effectiveness.