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Marco Rubio's Cure For Poverty? Subsidize Crummy Jobs, Make Massive Block Grants

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WASHINGTON -- Florida Sen. Marco Rubio joined the Republican chorus declaring Lyndon Johnson's "War on Poverty" a failure Wednesday and proposed his own cures, which include subsidizing work that doesn't pay a living wage and shifting all poverty programs to the states.

Rubio, one of the lead GOP prospects for the 2016 presidential contest, unveiled his plans in a speech sponsored by the American Enterprise Institute. The talk seemed aimed at convincing people that he and his fellow Republicans do hold the concerns of the poor close to their hearts, despite what Democrats may say, and perhaps getting a jump on the kind of arguments about the "47 percent" that helped sink Mitt Romney's 2012 campaign.

The senator argued that poverty remains a major problem in America and cited numerous statistics, including the country's soaring income inequality since 1980. He said those numbers show that LBJ's "big government" philosophy simply doesn't work and that America needs to be more concerned about "opportunity inequality."

"These economic, social, cultural and educational causes of opportunity inequality are complex. And they will not be solved by continuing with the same stale Washington ideas," Rubio said. "Five decades and trillions of dollars after President Johnson waged his War on Poverty, the results of this big-government approach are in."

But Rubio insisted that pursuing Democratic goals such as raising the minimum wage was not part of the solution.

"Our current president and his liberal allies propose that we address this by spending more on these failed programs and increasing the minimum wage to $10.10," Rubio said, mocking the idea. "Really? That is their solution to what President Obama has identified as the defining issue of our time? Raising the minimum wage may poll well, but having a job that pays $10 an hour is not the American Dream."

Instead of requiring employers to pay something closer to a living wage, Rubio proposed having the government supplement the stingy pay at many companies.

"We should pursue reforms that encourage and reward work. That’s why I am developing legislation to replace the earned income tax credit with a federal wage enhancement for qualifying low-wage jobs," Rubio said. "This would allow an unemployed individual to take a job that pays, say, $18,000 a year -– which on its own is not enough to make ends meet –- but then receive a federal enhancement to make the job a more enticing alternative to collecting unemployment insurance."

While Rubio cast his idea as a way to help individuals, it could also be a boon to corporations such as Walmart and McDonald's, which both rely on the taxpayer-funded federal safety net to support their low-paid workers to the tune of billions of dollars.

Rubio added that the point was not just to support those people, but to give them tools to advance. "The only solution that will achieve meaningful and lasting results is to provide those who are stuck in low-paying jobs the real opportunity to move up to better-paying jobs," he said.

Yet in the past, the senator hasn't been the most robust supporter of the sorts of educational programs that help people advance themselves.

Although he did not propose any other specific solutions beyond subsidizing crummy jobs, Rubio did say that the federal government should shift the responsibility for dealing with poverty to the states.

"Our anti-poverty programs should be replaced with a revenue-neutral flex fund," he said. "We would streamline most of our existing federal anti-poverty funding into one single agency. Then each year, these flex funds would be transferred to the states so they can design and fund creative initiatives that address the factors behind inequality of opportunity."

He accounted for his lack of specificity by suggesting the detailed solutions should be left to the states.

"Instead of continuing to pour money into our existing programs, we need to reform them through innovative and highly targeted solutions. But that is something the federal government is incapable of delivering," Rubio said. "Washington is too bureaucratic and resistant to change. And its one-size-fits-all approach to policy is not conducive to solving a problem as diverse as this one."

Some progressive economists were not impressed with Rubio's speech, suggesting that he hadn't actually thought that carefully about the problem.

"This sounds like he has no idea of the structure of programs and how they took the shape they did," said Dean Baker, co-founder of the Center for Economic and Policy Research.

"His 'wage enhancement' would run into real problems for people working multiple jobs. Does he want to subsidize wages for people earning $36,000 a year by the same amount as someone earning $18,000 a year?" Baker said in an email. "And, since it won't depend on family size, does he intend to cut his EITC [earned income tax credit] equivalent for workers with 2-3 kids? If not, then we will have to spend more, not less on this program."

"This is not close to being a serious plan to address poverty," Baker added.

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