03/03/2014 04:36 pm ET Updated May 03, 2014

Paul Ryan Criticizes 'Haphazard' And Ineffective Anti-Poverty Programs

By David Lawder

WASHINGTON, March 3 (Reuters) - The U.S. government has barely made a dent in poverty in the past 50 years despite massive spending on programs to aid the poor, House of Representatives Budget Committee Chairman Paul Ryan said in a report on Monday.

The Wisconsin Republican, a potential presidential contender in 2016, released the report a day before President Barack Obama sends Congress his own annual budget proposals, expected to include several provisions for helping the poor.

By releasing the report, Ryan, a fiscal hawk who was his party's unsuccessful vice-presidential candidate in 2012, appeared to be presenting himself as being more committed to helping poor Americans hoist themselves into the middle class.

He said many of the 92 federal programs aimed at fighting poverty were "haphazard" and ineffective, despite a cost of $799 billion in fiscal 2012.

The report, compiled by the Republican staff of Ryan's committee, said the U.S. poverty rate of 15 percent in 2012 was down only slightly from the 17.3 percent in 1965, the year after President Lyndon Johnson launched his "war on poverty" with new spending on aid programs.

"A large problem is the 'poverty trap,'" the report said. "There are so many anti-poverty programs - and there is so little coordination between them - that they often work at cross-purposes and penalize families for getting ahead."

The report did not recommend specific cuts to individual programs, but Ryan said it was meant to launch a public debate about anti-poverty spending. He was expected to outline his proposals in a Republican budget plan due out in a few weeks.


Obama's 2015 budget request is expected to include expansion of a tax credit for the working poor and an expansion of Head Start, the pre-school education program for poor children launched by Johnson.

Ryan's report sharply criticized Head Start, which cost $8 billion in fiscal 2012, for "failing to prepare children for school."

It cited two studies done for the Department of Health and Human Services that found the three- and four-year-olds who participated in the program showed little to no evidence of cognitive improvements over non-Head Start students by the time they reached the end of first grade and third grades. In some cases they had lower math scores, the studies showed.

Ryan's report was largely supportive of the $59 billion Earned Income Tax Credit, which Obama wants to expand, citing several studies that found it largely met its aim of encouraging work among low income people by providing them with a refundable tax credit.

The report did cite problems with non-compliance from people who fail to take advantage of the credit, tax preparation costs that eat into the benefits, and improper payments that reached $11 billion last year.

Obama in his State of the Union speech in January called for expanding this credit to childless workers, who benefit far less than those with children. But the Ryan report cited a study that showed that expansion of the credit in the 1980s and 1990s tended to discourage workforce participation by married women, while increasing participation by others.

Ryan's budgets have previously proposed reaping savings by turning the Medicaid health care program for the poor into a block grant for states, which is opposed by Democrats.

The report cites numerous problems with the fee-for-service program, which cost $265 billion in fiscal 2013 and was significantly expanded by Obama's health insurance reform law.

It cited findings of worse health outcomes for Medicaid patients compared to those with private insurance and Medicare, fewer physicians who accept Medicaid, lower reimbursement rates and increases in unnecessary and expensive visits to hospital emergency rooms.

The Ryan study identified nearly $300 billion spent on health care for the poor annually, over $200 billion on cash aid, over $100 billion on food aid, over $90 billion on education and job training and nearly $50 billion spent on housing. (Reporting By David Lawder; Editing by David Storey and Chris Reese)



Paul Ryan Has Deep Thoughts