Rep. Paul Ryan (R-Crazy) has a new plan to fight poverty. There is actually a chapter on criminal justice that is worth some attention. Why is there a piece on criminal justice in an anti-poverty report? C’mon, you know! Also there are pieces on job training, regulation, and education.
My interest is in the chapters on the Earned Income Tax Credit and the safety net, but the common theme throughout the report is to convert Federal programs into block grants. A block grant is a fixed pot of money provided to a state or local government for broadly-defined purposes. Ryan’s report is at pains to assert that the conversion would not entail spending cuts. This could not be further from the truth.
The story goes back to the days of Richard Nixon. I told it here. I was not the first to figure out the deal. The short version is that a program or programs converted to a block grant is being set up to wither away. Block grants are designed through formulas to grow slowly or not at all, despite the likelihood that whatever the included programs were aimed at typically costs more to deal with every year. There are also two malignant political dynamics at work. One is that Congress doesn’t like to spend money without a say in what happens to the money. Block grants transfer control to state governments. They have the fun of spending the money, Congress has the fun of raising the taxes to pay for it. The other is that the more vague — “flexible” — the purposes of the grant, the less focused is its political support.
State officials are always happy to play this game because the money is front-loaded. In the initial years the grant is close to what they were getting before, and by the time the grant shrinks, they will be out of office anyway.
The transfer of program responsibility from the Federal government to the states is known as devolution. It is the standard way of attacking domestic spending for social purposes, going back to Richard Nixon’s dismantling of the original, more interesting War on Poverty launched by Lyndon Johnson.
Monday I will go into the plan’s specific anti-poverty provisions.