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If Ryan Gets His Way on Poverty

Budget Would Widen Income Gap and Shred the Safety Net

SOURCE: AP/ Rich Pedroncelli

A sign announcing the acceptance of electronic benefit transfer cards, which allow for electronic food stamp payments, at a farmers market in Roseville, California.

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The latest House Republican budget plan asks low-income and middle-class Americans to shoulder the entire burden of deficit reduction while simultaneously delivering massive tax breaks to the richest 1 percent and preserving huge giveaways to Big Oil. It’s a recipe for repeating the mistakes of the Bush administration, during which middle-class incomes stagnated and only the privileged few enjoyed enormous gains.

Each component of the new House Republican budget threatens the middle class while doing nothing to add jobs or grow our economy. It ends the guarantee of decent insurance for senior citizens, breaking Medicare’s bedrock promise. It slashes investments in education, infrastructure, and basic research, all of which are key drivers of economic growth and mobility. And it cuts taxes for those at the top, asking the middle class to pick up the tab. It’s a budget designed to benefit the top 1 percent at everyone else’s expense.

Yesterday House Budget Committee Chairman Paul Ryan (R-WI) released a budget plan for fiscal year 2013. Quite simply, if Rep. Ryan gets his way the nation will never make a full commitment to solve major social problems and in many ways we will take giant steps backward to a time when there was virtually no safety net for those falling on hard times.

Consider how the Ryan budget would shape America’s next chapter and then decide whether it reflects our nation, or any nation, at its best.

Income inequality will grow

The Ryan budget will expand the gap between the haves and the have-nots. The middle class has already been disappearing along with the number of well-paying jobs, resulting in sinking wages for average workers.

How would Rep. Ryan take us further down that road? He proposes deep cuts to discretionary spending that would hurt programs like Pell Grants (which help low-income families access higher education), K-12 education, and job training. These programs help individuals secure a place in the middle class and remain there. When these cuts are coupled with Rep. Ryan’s continued significant tax breaks for the wealthiest Americans, the rich will get richer while ordinary Americans will face greater struggles to adequately provide for themselves and their families.

People who need help simply won’t get it

It’s true that our current safety net doesn’t fully serve everyone who needs it. But a future under Rep. Ryan’s plan would see even fewer people getting vital services. More individuals would experience outcomes such as hunger that makes it difficult to concentrate at school or work, and many would be forced to live in substandard, overcrowded housing or on the streets.

How would the Ryan budget move us in this direction? The aforementioned cuts to discretionary programs would also translate into deep cuts in a broad range of social services that ensure the most basic of needs such as the Supplemental Nutrition Assistance Program and housing vouchers. Also, Rep. Ryan’s efforts to convert programs like SNAP (formerly known as food stamps), into block grants would put a limit on the funds available for assistance and leave less flexibility for this program during emergencies like the recent Great Recession. Due to its current structure, SNAP was the most responsive social-services program during the recent downturn, temporarily expanding to serve 46 million participants and keeping more than 5 million people out of poverty in 2010.

All sides will come up losers in the war on the safety net

Following the lead of this budget proposal, it isn’t difficult to imagine a future where the poor and unemployed are regularly derided and punished for their status. And it would continue the dialogue that divides American against American over misperceptions tied to socioeconomic status and race.

How do we go even further down that path? Rep. Ryan’s budget is a part of a long-existing trend of promoting negative images of families relying on the safety net in order to justify plans for government inaction. His emphasizing of the need for work and alluding to new requirements for programs like SNAP and Medicaid demonizes and distorts the images of beneficiaries as being lazy working-age adults who simply don’t want to work.

This is a far cry from the following truths:

  • Most government benefits go to the elderly, people with disabilities, and those who are already working—not “lazy” working-age adults. Fifty-five percent of the money that the federal government pays out in benefits are targeted to senior citizens through Social Security and Medicare. Some beneficiaries are part of the 5.3 million families falling below the poverty line in 2010 even though they had at least one working member.

Consider the composition of those on two major government programs: Housing Choice Vouchers (55 percent are receiving retirement or disability payments, 33 percent have work earnings) and SNAP (21 percent are on Social Security, 21 percent are getting disability-related assistance, and 30 percent have work earnings).

  • Despite assertions to the contrary, many already rely on government benefits for only a limited period of time. For example, the most recent unemployment insurance data indicate that the average length of participation is 17.5 weeks, and for SNAP, 58 percent of beneficiaries end their participation in less than a year and 74 percent in less than two years.

This distorted image reflected in the Ryan budget is reminiscent of the nation’s history of race-baiting. The policy prescriptions conjure long-held stereotypes (not realities) of people of color and especially African Americans as being lazy or lacking work ethic. A foundation built on stereotypes, misperceptions, and demonization is not a solid one for solving real problems.

America will rack up unnecessary costs

Finally, Rep. Ryan’s plan to cut the federal budget will actually lead to increased societal costs, further straining the resources of the American people.

How, you ask? Insufficient investments in programs that get and keep people out of poverty will hinder the nation’s ability to significantly reduce poverty as it did following implementation of President Lyndon Johnson’s Great Society programs and during the Clinton years. And specific factors associated with poverty have heavy price tags. The societal cost of hunger, for example, is $167.5 billion per year as a result of factors such as lost economic productivity, the increased costs of poor educational outcomes, avoidable health care costs, and the increased costs of charitable assistance.

Bottom line

America will have to decide if it wants the future the Ryan budget is proposing. Rising income inequality, more people in need not being able to get help, a culture of demonizing and punishing the poor, and increased societal costs strongly suggest that this would not result in an era of shared prosperity and an America at its best.

Joy Moses is a Senior Policy Analyst at the Center for American Progress.

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