A Welfare Experiment: Paul Ryan’s Opportunity Grant

Representative Paul Ryan (R-WI)

Representative Paul Ryan released a new discussion draft through the House Budget Committee called “Expanding Opportunity in America”. This expansive paper focuses on plans to combat poverty by tackling several areas: welfare programs, tax code, public education, criminal justice and regulatory reform. Some of the ideas are more original than others, but the most interesting by far is Ryan’s “Opportunity Grant”. The Opportunity Grant strives to reform the welfare system by letting the states experiment on welfare programs—and, hopefully, simplify them.

The welfare system in America is pretty complicated. There are no fewer than 11 different safety net programs and despite good intentions, the cumbersome rules and forms sometimes make the system confusing and even ineffective. If a family is in need of government assistance, they must research and determine their eligibility for any of the following programs:

1. Negative income tax (EITC and child tax credit)
2. Supplemental Nutritional Assistance Program
3. Housing Assistance (Help finding affordable housing and paying rent)
4. Supplemental Security Income for the disabled, blind or elderly
5. Pell Grants (Money for students to help with room and board)
6. Temporary Assistance for Needy Families
7. Job Training (Employment support)
8. WIC (Nutrition for pregnant women, nursing moms, and children under 5)
9. Child care and after school programs
10. Low Income Home Energy Assistance (Help to heat or cool a home)
11. Lifeline (Phone subsidy, including cell phones)

Navigating all of these programs takes considerable effort and many people who are struggling just don’t have the time. Paul Ryan’s Opportunity Grant proposal would simply this system by allowing states to consolidate all federal welfare funds through one state office. This way benefits can be coordinated on the federal, state, and community level. After meeting with a welfare provider of their choice, low-income families would receive a single payment based on their specific needs.

The Opportunity Grant provides flexibility first and foremost. Poverty takes on so many different forms, from temporary assistance to long-term disability, that solutions must be adaptable. States can experiment with a system that can cater to specific situations. Case management, for example, can make social services so much more effective because the solution is based on the individual’s needs. This type of system would avoid the “one-size-fits-all approach” by customizing each aspect of the process. In the discussion draft, Ryan outlines a situation where this responsiveness would be important:

“For example, it makes little sense to provide a household with a consistent stream of SNAP benefits when what the household may need most is reliable transportation to and from work. Giving providers this kind of flexibility will allow them to intervene early on with targeted benefits in cases where short-term assistance can prevent someone from falling into deeper poverty.”

At first, Opportunity Grant would only be open to a test group of states. In order to protect the needs of low-income families and individuals, participating states will be required to follow several criteria: (1) Each state has to spend the federal money on people in need; (2) Welfare recipients must follow work requirements; (3) States should have to use at least two different providers so that the state social welfare office would not be overworked; and (4) There must be a third party observer (other than the state or federal government) to monitor progress. Within these parameters, states would be free to experiment and create a new organization.

The main goal of the Opportunity Grant is to gather research from each of the participating states and use that information to find an approach to welfare that can be used nationwide. This type of experimentation is not new. In 2006, the state of Massachusetts passed a health reform law with the goal of universal health care coverage. The law was unique because of its idea of health care exchanges, set up to facilitate the purchase of insurance policies throughout the state. In this case, state experimentation in Massachusetts influenced how the federal government approached health care reform. When Congress passed the Affordable Care Act, the 2010 health care reform bill borrowed this idea of health care exchanges.

Experimentation within the states is necessary for progress. Justice Louis D. Brandeis famously called states “laboratories for democracy”, meaning that the states are often better equipped to find solutions for policy challenges. Because the federal government is so large and cumbersome, it is much easier for states to do the bulk of political discovery. If five states participate in the Opportunity Grant program, there will be five different proposals for welfare reform and five sets of data showing the effectiveness of each system. This wealth of information can inform members of Congress. Instead of using untested theories to reform welfare, legislators can make informed decisions.

You can read Paul Ryan’s whole proposal here.

After you do, make sure to contact the House Budget Committee and let them know what you think: ExpandingOpportunity@mail.house.gov