Thursday, July 31, 2014

Paul Ryan fights Poverty?

Paul Ryan has a new Republican plan to fight poverty. It's getting some positive play because he finally stops advocating less spending on the social safety net in order to balance the budget. It's almost like he actually wants to help poor people.

Key to his plan is what he calls an Opportunity Grant, which ties all the social safety net programs  together and gives a lump sum to the states to spend as they wish. Federal money to be spent on behalf of the poor through programs developed and administered by the states.




Step right this way into the past ! 
A lot of federal programs are administered like by states. Unemployment benefits are administered by the states. Medicaid is administered by the states; each state sets it own eligibility and its own benefits level. As a result, Medicaid varies significantly across the country. Some say this is 'federalism', but it is about the worst idea in the history of public policy in the United States.

There is a large number of states who maintain a low-wage, low-benefit, low-tax and non-union economies. The states of the old Confederacy are foremost among them. These policies are locked in there because poor people were denied political power on account of race, and the political climate polarized against them. Some states in the Southwest, with smaller urban populations, have histories of structuring citizenship such that many of the poor do not have any political power.

There is a direct connection between the political exclusion of poor people, anti-poor, anti-worker social policies and the conservative dominance in state politics.  Federalism serves to perpetuate those conservative state strongholds.

There is a competitive economic advantage that accrues to states with such anti-poor people, anti-worker policies. Those policies both attract business and repel poor people.  Throughout most of the last century, the South has served as an internal colony where lower wages, a more meager safety net and anti-union laws made for a "better business climate." Companies were outsourcing to the South before they were outsourcing abroad.

Another effect of these 'federalist' public policies was to push internal migration from the South to the North, aggravating the economic disruptions of urbanization.

As the GOP becomes more based in the states of the Old Confederacy, its strategy is to keep the economic advantages that the Southern states have derived from the history of slavery and segregation. A plan like Paul Ryan's plan to fight poverty by consolidating federal safety net programs and letting the states administer them is part of that strategy and will the effect of perpetuating the rich state/poor state divide.

Notice that the most successful income support program in the United States is Social Security. It is administered on a national level with national formula for calculating benefit levels. (Still, someone who worked a lifetime in a low-wage state will get less than someone who worked a lifetime in a higher wage state, but that effect is limited by the income cap on social security taxes.) But retired people are more free to move about the country without loss of their benefits.

Paul Ryan likes to talk about "subsidiarity" as an essential social doctrine of the Catholic Church -- that powers should reside at the lowest level possible. That's worth a whole blog post in and of itself. But that is not what is at play here. Ryan is playing the old game of sectional politics in the USA: the struggle of once slave-owning South to preserve the power to maintain its exploitation of the poor as the basis of its wealth.




2 comments:

Steve LaBonne said...

This is what every proposal to shift programs to the states is about. Anything worth doing must be done by the federal government, otherwise millions of people will be deliberately and callously left out.

Elz Curtiss said...

So he has quit telling the blue states they cannot have funds, while telling the red states they can channel it to their power-holders. Smart man, using what we now have to call "The John Roberts Strategy." Oh, wait -- isn't this what used to be done to maintain one union half slave and half free? We're heading into Bleeding Kansas all over again.