Ryan Plan Helps the Poor

James Pethokoukis writes a very interesting column at The Enterprise Blog on No, Paul Ryan’s new budget wouldn’t ‘hurt the poor’. In it he insists that the primary goal of Paul Ryan’s Path to Prosperity is to help the poor, and that how well it lifts the poor out of poverty is the measure on which it should be judged. As Pethokoukis states, “The goal here … is to create a culture of empowerment rather than dependency.”

Pethokoukis notes several efforts which led to the decline in poverty rates and the rise in self-sufficiency. In particular, citing Did Welfare Reform Work for Everyone? A Look at Young Single Mothers, he notes that “child poverty rates fell 1 percent per year in the five years following the passage of TANF in 1996.” You can see the proof of this statistic in the graph US Poverty rate by age at Wikipedia.

The emphasis on the success of the TANF program is well-placed. TANF was the bipartisan welfare reform project signed into law in 1996 to great concern among left-leaning politicians and welfare advocates, who expected the reform to increase levels of poverty. But as the graph in Pethokoukis’ article clearly shows, the decline in caseloads which began in 1992 continued after passage in 1996 right through until 2001.

The study on single mothers which Pethokoukis quotes and which is cited above, shows that single mothers have fared pretty well since the welfare reform. As employment among women has increased, and as the number of families led by single mothers has increased as a percentage of all families, so has the percentage of single mothers in the workforce. As the study notes, not only has this improved the financial circumstances of single mothers during good economic times, it has also in recessionary times “better positioned them to fall onto a different part of the social safety net–unemployment insurance.”

Pethokoukis ends by saying that “the tax reform in the Ryan plan would boost economic growth, incomes, and jobs. That’s a pretty powerful poverty-fighting agenda.” During the strong economic growth of the 60’s and 90’s, as the US poverty rate chart referenced above clearly shows, poverty decreased. If the Ryan plan mirrors those good economic times, he can truly say that he has achieved his primary goal, the reduction of poverty.