Representative Paul Ryan has a bold, ambitious proposal “Expanding Opportunity in America,” to completely remake the American welfare state. Along the way he would also change the federal government’s approach to education, revamp what we are doing in our prison system and much more.
Here is a surprise. Although Ryan’s approach is based on well-known conservative ideas, some on the left are actually praising parts of the proposal – including the editorial page of the Washington Post.
Ryan’s plan shows something I have believed for a long time. All the innovative thinking on how to solve public policy problems for the past 25 years has come from the right. Even ObamaCare started out as a conservative health reform before liberals in Congress completely botched it. Liberals just don’t seem interested in solving problems any more.
Welfare reform. It’s certainly no secret that our welfare system is dysfunctional. There are 185 means tested welfare programs and government at all levels is spending more than $1 trillion on them. Yet the poverty rate today is about as high as it’s been in 45 years.
$1 trillion, by the way, is almost $22,000 for every poor person in America, or $88,000 for a family of four.
There is a reason for the dysfunction. Instead of helping people become self-sufficient and independent, we are paying them to stay poor. We penalize those who work and produce. We reward those who remain idle. Low-income families face the highest effective tax rates in the country – higher than those faces by the very rich. That’s because every time they earn a dollar, they lose welfare benefits.
According to a Congressional Budget Office study [Foot note 17 cited in Ryan’s report] and additional calculations by the House Budget Committee staff [foot note 18]:
John C. Goodman is President of the Goodman Institute and a Senior Fellow at The Independent Institute. He is the author of the widely acclaimed book, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and National Journal, among other media, have called him the "Father of Health Savings Accounts.”