Poverty programs not working, GOP Rep. Ryan says

U.S. Rep. Paul Ryan, the House Budget Committee chairman, on Friday made the case at a Las Vegas convention of political leaders and investors for reforming America’s poverty programs as the nation suffers the highest poverty rate in a generation.

Ryan, R-Wis., said there is “untapped potential” among the poor because U.S. programs don’t focus on helping individuals and instead keep increasing funding, now $800 billion a year for 92 programs to fight poverty.

“The numbers sure don’t look very good,” Ryan said. “You take a look at the results and they’re not what they need to be.”

Ryan said the government measures success in battling poverty by looking at increasing funding. He said that instead the country should look at outcomes, or how many people are overcoming poverty.

“There is an untapped potential among the poor,” Ryan said. “There are people in the country fighting against amazing odds, doing heroic things. … There are people who are changing the status quo.”

Ryan said the federal government ought to partner with local program leaders who have been studying poor neighborhoods to identify people who are succeeding despite their circumstances.

Ryan called such successful poor, who manage to work and put their children through college, “social entrepreneurs” who can serve as examples to their peers.

Ryan noted that the No. 1 solution to decreasing poverty is higher employment for the poor, who sometimes are reluctant to take low-paying jobs because they bring less income than government aid, he said.

“First, the bridge to a better life is a job,” Ryan said. “There is no substitute for real economic growth.”

As for poverty programs, he said, “Aid to the poor needs to be direct; it needs to be personalized” instead of a mish-mash of programs “that aren’t tethered with one another” and can be difficult to navigate.

“When some poor try to get out of poverty, they end up losing money if they go to work,” Ryan said, adding that even those with low incomes have to pay marginal tax rates as high as 80 percent. “If they lose more when they do that (go to work), that doesn’t make a lot of sense. We need to make sure that it always pays to work.”

Ryan, who was GOP presidential candidate Mitt Romney’s running mate in 2012 and is a potential White House hopeful for 2016, said Republicans and Democrats have to stop fighting about how to deal with rising poverty and need to cut wasteful programs. Over the years, Ryan’s GOP budgets have been rejected outright by Democrats in Congress.

“We want to detoxify the politics of this issue and not make this a big left-versus-right battle royal,” he said. “This isn’t a budget-cutting exercise. This is a reform exercise. For people who are able-bodied, who are not hitting their potential, government needs to refocus its efforts so they actually get their life together.”

Ryan was speaking to the SkyBridge Alternatives Conference, an annual meeting of hedge fund managers, political and business leaders and celebrities. It’s an invitation-only event with most forums off the record so participants — about 1,800 this year at Bellagio — can speak freely.

Ryan appeared onstage with Robert Woodson Sr., founder and president of the Center for Neighborhood Enterprise. A civil rights activist in the 1960s, Woodson is the driver of the movement to empower neighborhood-based organizations to fight drugs, violence and poverty.

Woodson agreed politics needs to be removed from the poverty debate.

“People on the political left, when they see poor people they see a sea of victims,” he said, adding that “people on the right” say the system isn’t working so why not cut programs and let free enterprise determine people’s fate.

“The poor are the net losers between the bipolar debate between the left and the right,” Woodson said. “We need a third way. … We must go into low-income communities and look for social entrepreneurs. You can learn nothing from studying failure except to create more failure.”

Ryan said that more than 50 years after the U.S. government declared a “war on poverty” the nation has had the deepest poverty rates in decades, demonstrating that the current system isn’t working.

“The government has done some bad things” in addressing poverty and has erected barriers to success, he said.

“We want to clear the barriers so entrepreneurs can succeed,” he said. “If we’re going to be spending nearly $1 trillion a year” it must be “done in an effective way. We want to partner with people making a difference.”

Ryan gave the example of an inner-city high school in Milwaukee that had a huge problem with violence. Hiring more police officers and installing security cameras wasn’t working, he said.

So the school partnered with a program that provided mentors to troubled students, including former gang members and addicts who share their personal stories of overcoming adversity, he said.

“They have absolute credibility in those schools,” he said of the mentors, who tell students “don’t make the mistakes I made.”

Since the mentor program began, school suspensions are down 60 percent, attendance is up “and violence has all but disappeared,” he said.

“That’s an idea that should be invested in,” Ryan said. “Seeing all of these young lives being transformed.”

Ryan ended his 20-minute speech by urging several hundred investors in the audience to get involved, not rely on a government fix.

Contact Laura Myers at lmyers@reviewjournal.com or 702-387-2919. Find her on Twitter: @lmyerslvrj.