Here is What Speaker Ryan’s Plan to Fight Poverty Should Look Like
In February, House Speaker Paul Ryan formed a Task Force on Poverty, Opportunity, and Upward Mobility to help combat poverty in the United States. As members of Congress on both sides of the aisle are taking interest in addressing poverty, what they decide could make a huge difference in the lives of low-income Americans – for better or for worse. This is a chance for lawmakers to expand and strengthen some of the country’s most effective programs on poverty, including the Earned Income Tax Credit (EITC) and SNAP (formerly Food Stamps).
Last December, Republicans and Democrats came together to send a lifeline to millions of Americans, cementing into law key provisions of the EITC, a refundable tax credit for low-wage workers. Unfortunately there is still work to do, as today millions of Americans are being taxed into poverty every year. Both Speaker Ryan and President Obama have come out in support of expanding the EITC to address this. This should be a key part of the Poverty Task Force’s recommendations.
While both Speaker Ryan and President Obama support expanding the EITC, the Speaker has taken aim at other effective anti-poverty programs, including SNAP. As we look to find new, innovative ways to tackle poverty in this country, we should be building on our progress to-date, not dismantling it. With nearly one in seven Americans living in poverty today, now is the time to strengthen and expand what we know works — not to undo years of progress that could push people into poverty or even deeper into it.
Taxed into Poverty
No one should be taxed into poverty, but that is exactly what is happening now to 8 million low wage workers without children. While the Earned Income Tax Credit (EITC) has been remarkably successful at reducing poverty — and in fact lifts more than 9 million people out of poverty every year — it does little to nothing for adult workers without children, who are only eligible to receive a maximum EITC of $500. They usually end up receiving much less than that. For comparison, the maximum EITC for households with one child is over $3000.
In addition, workers without children under the age of 25 are completely ineligible for the EITC, even though a full-time minimum wage salary delivers an annual income of just $14,500 before taxes. That is hardly livable in 2016. This means that instead of supporting these young people just starting out in their careers, we’re taxing them into poverty.
Luckily, both President Obama and Speaker Ryan understand that this situation has to change. Both support a plan to double the credit available to childless workers and to lower the age of eligibility from 25 to 21. The Treasury Department estimates the Ryan and Obama proposals would benefit 13.5 million Americans, lift 500,000 hardworking Americans out of poverty, and reduce the depth of poverty for another 10.1 million.
The time to act is now. Every American who works full-time should be able to afford the basic expenses of life, and the EITC has wide ranging benefits. When people are able to keep more of their salary, they spend more in their local communities, giving the economy a boost. They are able to get on more solid financial footing, progressing in their studies and careers. They can pursue their dreams without worrying about whether they can afford rent or food.
Congress should get behind this plan and urge their colleagues to do so, too. This is the kind of bipartisan legislation we need if we are going to end poverty in this country. Speaker Ryan should be supported for taking a bold stance on expanding the EITC. His Poverty Task Force should now work towards protecting all federal anti-poverty programs that act as a lifeline for millions of people all around the country.
SNAP Lifts Millions Out of Poverty — Let’s Protect it
Because of the ongoing effects of the Great Recession and stagnant wages, millions of Americans are struggling to pay their bills and can’t afford nutritious food for their families. In 2014, almost 1 in 5 children in the U.S. were at risk of going to bed hungry at night. That’s where the Supplemental Nutrition Assistance Program (SNAP) comes in. Currently, 45 million people — almost half of them children — receive SNAP benefits. SNAP lifted 4.7 million people out of poverty in 2014 and significantly reduces hunger and poor health in children.
SNAP doesn’t just help people in need, it also stimulates the economy. According to the USDA, every five dollars spent creates nine dollars in economic activity. People who receive SNAP benefits also have an incentive to look for work or a better paying job: for every extra dollar a SNAP recipient earns, SNAP benefits go down by only 24 or 36 cents. And during an economic downturn, SNAP is flexible and can respond immediately. That means that even if someone finds themselves suddenly out of work, they don’t have to worry about losing their only dependable source of food as well.
Despite the effectiveness of SNAP, and the millions of families who depend on it to survive, members of the Poverty Task Force have supported major cuts and structural changes to the program in the past. Speaker Ryan has spoken about converting SNAP into a block grant (disguised as a “merged funding stream”), which means it would no longer be a federally administered program. Instead, the money would be given directly to states to spend as they see fit. While some argue that this allows states to respond to the unique needs of their own communities, the reality is that block grants take away the very aspects of SNAP that make it so effective: its ability to increase in emergencies and to adjust over time for inflation.
Before finalizing his own plan to fight poverty, Speaker Ryan should think about the millions of children who depend on SNAP for their daily meals. What will happen to them if SNAP is restructured and made into a block grant? Instead the Poverty Task Force should look to strengthen SNAP as a core part of their proposal. We should increase the monthly benefits so that families can afford to buy healthy food like fresh fruits and vegetables. We should also extend SNAP benefits over a longer period of time so people can more easily transition into the work force or a better paying job. These types of changes will make SNAP better and stronger, and in turn, recipients will be healthier and better equipped to study, work, and reach their full potential.
Contact:
Colin Smith
(202) 783-4800 X139