Quick Thoughts on Ryan's Poverty Plan: What Are the Risks?

Jul 25, 2014Mike Konczal

Paul Ryan released his anti-poverty plan yesterday, and lots of people have written about it. Bob Greenstein has a great overview of the block-granting portion of the plan.

Paul Ryan released his anti-poverty plan yesterday, and lots of people have written about it. Bob Greenstein has a great overview of the block-granting portion of the plan. I'm still reading and thinking about it, but in the interest of answering the call for constructive criticism, a few points jump out that I haven't seen others make yet.

How did we get here?

Republicans obviously have an interest in branding themselves as a "party of ideas." And many liberals and Democrats also have an interest in trying to make the GOP seem like it's been devoid of any ideas in the past several years.

But it's worth noting that within a year of Democrats and liberal thinkers getting actively behind a serious increase in the minimum wage, and many activists making strides toward it on the local level, Paul Ryan just wholesale adopted President Obama's EITC expansion program. That demonstrates the value of pushing the envelope.

Complexity and the EITC

Ryan's plan, correctly, makes a big deal out of the complexity of receiving the EITC. The difficulty of navigating the system, the large number of improper payments, people not receiving what they should, people having to use tax-prep services to get the credit, and so on.

This is why I'm a huge fan of higher minimum wages as a complement to the EITC. Instead of 40 pages of rules and a dozen potential forms to fill out, you just put a sign that reads "$10.10 an hour" on the wall. Bosses and workers can't trick each other or get confused about this, and nobody has to pay a tax-prep service to figure it out. Easy peasy.

Ryan wants to "direct the Treasury Department to investigate further" how to fix this, but in practice Treasury just turns around and yells at the IRS. And if the IRS knew how to fix it, they'd probably be on it.

There is also a simpler plan to fix this issue: just have the government mail people their tax forms already filled out, for them to either sign or correct. When a trial version of this, "Ready Return," was tried in California, people immediately saw the potential for this to fix EITC delivery issues. Perhaps anti-poverty advocates can help provide momentum on this front.

Bosses and the EITC

Both Ryan and Marco Rubio have referred to putting the ETIC credit directly into workers' paychecks. Ryan: "[A]nother potential area of reform should focus upon EITC simplicity and delivery. If families received the credit with their paychecks, the link between work and the EITC would be that much clearer."

I'd be worried if employers were the ones responsible for adding this wage subsidy. I don't think there's a convincing argument that the EITC or food stamps lower wages directly (though there is one indirectly for the EITC), but if employers got a wage subsidy themselves to pass to their workers, it's easy to imagine them pocketing part of it through lower wages, especially in the monopsony of low-wage labor markets.

A discussion of welfare reform

Rather than a "welfare reform -- yay or nay?" conversation, it would be really useful if people arguing for the block-granting of the entire anti-poverty agenda would point out what they do and do not like about what happened in the 1990s. Especially as proponents hold up welfare reform as the model.

As Matt Bruenig notes, the work requirements and other restrictions go against the concept of subsidiarity. Greenstein writes, "the block grant would afford state and local officials tantalizing opportunities to use some block grant funds to replace state and local funds now going for similar services...That’s what happened under the Temporary Assistance for Needy Families (TANF) block grant." In retrospect, TANF didn't survive the business cycle, and it clearly has cut spending by cutting the rolls. Is that what people want to accomplish with food stamps, which have done wonders to boost childhood life outcomes? If not, what can be done other than assert that this time will be different?

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Mike Mathieu: Big Data is Watching You

Jul 25, 2014

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. In today's video, tech entrepreneur Mike Mathieu imagines what happens when data-mining is done directly to the human brain.

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. In today's video, tech entrepreneur Mike Mathieu imagines what happens when data-mining is done directly to the human brain.

Mike Mathieu, entrepreneur and founder of high-tech business incubator Front Seat, speculates on the future of technology, imagining a 100-million-fold increase in computer power that leads to a revolution in data and the "sensor-fication" of the entire world. By 2040, he says, we can wire computers directly to the brain to capture data. The economy grows, but some suggest "data becomes America's Dutch Disease." In a darker turn, we begin to see a loss of human freedoms as behavior is increasingly predicted, tracked, and incentivized according to data models.

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Daily Digest - July 25: The Bad Science Behind the Anti-Woman Agenda

Jul 25, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Debunking the Bad Science on Abortion and Women's Health (The Hill)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Debunking the Bad Science on Abortion and Women's Health (The Hill)

Roosevelt Institute Fellow Andrea Flynn explains the truth behind the anti-abortion myths that are presented as fact by lawmakers who pass legislation that harms women's health.

Setting the Table for Housing Reform (Progressive Massachusetts)

Alex Lessin summarizes Roosevelt Institute | Boston's deep dive into housing policy, which led them to focus on increasing public participation at zoning meetings as a key step for fair housing.

Some Republicans Push Compassionate, Anti-Poverty Agenda Ahead of 2016 Contest (WaPo)

Zachary Goldfarb speaks to Roosevelt Institute Fellow Mike Konczal, who says many of these Republican reform ideas only put a nicer spin on radical proposals like the Ryan budget plan.

Parts of Paul Ryan's Poverty Plan Even a Liberal Can Love (U.S. News & World Report)

Fixing mandatory minimum sentencing guidelines and limiting unnecessary professional licensing in some occupations are opportunities for bipartisan agreement, writes Pat Garofalo.

United Airlines' Outsourcing Jobs to Company That Pays Near-Poverty Wages Is Shameful (HuffPo)

Robert Creamer decries United for eliminating hundreds of middle-class jobs for the sake of financial performance. He writes that companies can't be permitted to put stock performance ahead of people.

Forget Too Big to Fail. Banks Bro-down to Borrow, and It May Cause a New Crash (The Guardian)

Heidi Moore calls on regulators to push new requirements on banks for their short-term lending, which she sees as a key piece of financial regulation to keep banks from failing.

New on Next New Deal

White House Summit Speakers: Look Beyond Congress for Action on Working Families

With Congress in gridlock, Julius Goldberg-Lewis, Midwest Regional Coordinator for Roosevelt Institute | Campus Network, praises the White House Summit on Working Families' focus on states and businesses.

Big Data is Watching You

In his speculation on the future for the Next American Economy initiative, Mike Mathieu, founder of high-tech business incubator Front Seat, says data-mining is coming for the human brain.

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White House Summit Speakers: Look Beyond Congress for Action on Working Families

Jul 24, 2014Julius Goldberg-Lewis

The White House Summit on Working Families showed paths to creating change that work around a gridlocked Congress.

The White House Summit on Working Families showed paths to creating change that work around a gridlocked Congress.

On Monday, June 23, Roosevelt Institute Fellows and Campus Network members attended the White House Summit on Working Families in Washington, DC. The Summit, which was the culmination of months of town halls across the United States, presented the audience with the stark reality that in order to truly help working families, there must be a dramatic culture shift. The day was filled with speakers like the President, the Vice President, and both their wives, and the CEOs of multibillion-dollar companies and startups alike, all of whom shared anecdotes about their experiences as the breadwinners of working families.

The focus of the conference was the need to change the outdated laws and culture that govern the modern-day workforce. Today, women make up 47% of the labor force, and 60% of children grow up in a family where both parents work. The status quo, however, leaves most Americans without access to any form of guaranteed leave, and even fewer with basic necessities such as paid maternity leave. Everyone has endured challenges finding a work/life balance, and as Vice President Biden explained in his own experience, not all employers are as forgiving as the people of Delaware when one needs to miss work to take care of a child. He pointed out that in his first years in the Senate he had the lowest attendance rate — but that his constituents gave him a chance. The summit challenged its participants to bring that kind of culture of flexibility and empathy to the workplace.

The Summit illuminated the two mutually reinforcing paths that are necessary to ensure that working families have the ability to support themselves and care for their children and elderly parents. On a policy front, there is already the Family and Medical Leave Act, which stands as one of the few policy solutions in place to alleviate the burden on working families. However, this only covers 60% of workers and only guarantees unpaid leave, which is often an unworkable option for families that rely on a daily wage. The United States is alone among OECD countries in that we do not guarantee paid parental leave. Paid leave is necessary not only to soften the financial burden associated with having children, but also, as was repeated throughout breakout groups and panels, because parents who take maternity/paternity leave are far more likely to reenter the workforce than those who don’t. There also need to be long-term policy solutions that will ensure that a working family can earn a living wage. The Summit reiterated the push for a $10.10 minimum wage, and invited several business owners who pay a living wage and provide paid leave to share their success stories.

Legislative change is not the only means of tackling this issue, and the Summit pointed out that as long as Congress remains gridlocked, it is up to businesses to implement higher wages and better leave policies on their own. Change at the business level requires that companies change both their explicit policies and their workplace cultures. Both in multinational companies and small businesses, it’s just as important for managers to offer paid leave as it is for them to take it themselves. While many workers in the US do, in fact, have access to some form of leave, workers often do not take full advantage of these benefits because of stigma or because no one else in the office uses all of their leave. The private sector must lead by proving that businesses can provide paid leave without hurting their bottom line (and sometimes even helping it), and by ensuring that people feel comfortable using that leave.

Working families in the United States face numerous challenges, from providing care to their families when they need it to having the resources to do so, but if there was one message that was repeated throughout the Summit it was that there is a tremendous amount of energy to work with. On the legislative front, vast majorities of voters support a higher minimum wage and family leave. While Congress has not taken up the call to action, cities like New York and Seattle have taken it upon themselves to raise wages and ensure time off. The energy around this issue must be channeled in every way possible: by pressuring elected officials to pass laws, by encouraging business to raise their wages, and by fostering a culture where everyone feels comfortable putting their family first. 

Julius Goldberg-Lewis is the Roosevelt Institute | Campus Network Regional Coordinator for the Midwest and a Summer Academy Fellow in Washington, DC.

Photo by Pete Souza.

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Daily Digest - July 24: All the Performance Pay, None of the Performance

Jul 24, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

The Pay-for-Performance Myth (Bloomberg Businessweek)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

The Pay-for-Performance Myth (Bloomberg Businessweek)

Eric Chemi and Ariana Giorgi report on a new analysis of data on the relationship between company performance and CEO pay, which shows no relationship between the two factors.

  • Roosevelt Take: In his white paper, William Lazonick explains how stock-based performance pay incentivizes CEOs toward business practices that manipulate stock prices.

Elizabeth Warren to Help Propose Senate Bill to Tackle Part-Time Schedules (The Guardian)

Jana Kasperkevic writes that the Schedules That Work Act would establish a right to request a predictable schedule, payment for cancelled shifts, and two weeks' notice of schedule changes.

Technology, Aided by Recession, Is Polarizing the Work World (NYT)

Claire Cain Miller says a new study explains how the recession has accelerated the loss of "routine" jobs, which follow well-defined procedures and used to go primarily to men and people with less education.

Even After Open Enrollment, Activity Remains Unexpectedly High on Federal Health Insurance Exchange (ProPublica)

There have been nearly 1 million transactions on the federal exchange since the April 19 enrollment deadline, writes Charles Ornstein, as people continue to sign up for and switch insurance plans.

Paul Ryan's Anti-Poverty Plan Should Support Minimum-Wage Hike, But Don't Count on It (The Hill)

Raising the minimum wage is one of the best ways to fight poverty today, writes Shawn Fremstad, but Paul Ryan ignores research that shows higher wages wouldn't impact employment.

Highway to Hell (The Economist)

The Economist says Congress's solution to funding the Highway Trust Fund through budget tricks around pensions creates risk of greater costs on taxpayers if those underfunded pensions go bust.

New on Next New Deal

The Future Economy Will Pit Man vs. Machine

Andy Stern, president emeritus of the SEIU, presents a speculation on the future for the Next American Economy project in which technology replaces the vast majority of jobs.

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Andy Stern: The Future Economy Will Pit Man vs. Machine

Jul 24, 2014

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. In today's video, SEIU's Andy Stern offers a darker take on a future in which continued technological innovation has had a devastating impact on the job market.

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. In today's video, SEIU's Andy Stern offers a darker take on a future in which continued technological innovation has had a devastating impact on the job market.

Andy Stern, president emeritus of SEIU, speculates that by 2040 technological advancement will have unleashed a tsunami of job loss. "The intellectuals who long served up education, entrepreurial tendencies, and innovation as the answer to all our job problems joined the union leaders, market fundamentalists, and the conservative economists in the Flat Earth Society," says Stern.

But in the 2042 election, a new coalition will rise, securing the policies needed for us to live in a future defined by abundance and equality.

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Carl Camden: Full-Time Employment May Give Way to a Free Agent Economy

Jul 23, 2014

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. In today's video, Kelly Services CEO Carl Camden speculates about a future workforce dominated by temporary employees.

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. In today's video, Kelly Services CEO Carl Camden speculates about a future workforce dominated by temporary employees.

The CEO of employment firm Kelly Services speculates that in 20 years, less than a third of the American workforce will be directly employed by corporations or governments. Rather, the majority of the population will work as free agents. Kelly Services placed 540,000 temporary employees in 2013, and can serve as a model for human resources firms of the future. In place of government or full-time employers, firms like Kelly Services will become the purveyor of social services on behalf of the freelancers they represent, including insurance, education, and retirement benefits.

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Live at TNR: Dodd-Frank at Year Four

Jul 23, 2014Mike Konczal

Live at The New Republic, I have a piece describing Year Four of Dodd-Frank, which celebrates its birthday this week. The news coverage of the past year has had a "stuck, spinning its wheels" argument to it. I argue that this past year saw some major and important advancements, directions on where to go next, and also made what will be the biggest challenges going forward very clear. I hope you check it out.

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Live at The New Republic, I have a piece describing Year Four of Dodd-Frank, which celebrates its birthday this week. The news coverage of the past year has had a "stuck, spinning its wheels" argument to it. I argue that this past year saw some major and important advancements, directions on where to go next, and also made what will be the biggest challenges going forward very clear. I hope you check it out.

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Daily Digest - July 23: It's Been a Good Year for Financial Reform

Jul 23, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Ignore the Naysayers: Dodd-Frank Reforms Are Finally Paying Off (TNR)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Ignore the Naysayers: Dodd-Frank Reforms Are Finally Paying Off (TNR)

The past year has seen important successes, like higher capital requirements, writes Roosevelt Institute Fellow Mike Konczal, and the next steps for financial reform are getting clearer.

We’re Arresting Poor Mothers for Our Own Failures (The Nation)

Bryce Covert points to the policy failures of welfare reform, which requires parents to work or look for work to receive benefits but hasn't provided for child care, leading to recent high-profile arrests.

Obama to Sign Bill Improving Worker Training (Time)

In the first significant legislative reform to job training in a decade, Maya Rhodan says the Obama administration and Congress put training programs on a more forward-looking path.

SEC Is Set to Approve Money-Fund Rules (WSJ)

The new rules target institutional investors over individuals, says Andrew Ackerman, aiming to train investors to accept fluctuations and prevent panicked mass sell-offs.

TaskRabbit Redux (New Yorker)

Adrienne Raphel writes that TaskRabbit's recent relaunch makes it more clear that for all their marketing, online tools for hiring labor or transportation are about commerce, not community.

New on Next New Deal

Dr. Strangelove and the Halbig Decision

Roosevelt Institute Fellow Mike Konczal points out the fallacy in right-wing claims that there is a "doomsday machine" in the Affordable Care Act: doomsday machines only work if you tell people about them.

Full-Time Employment May Give Way to a Free Agent Economy

In his speculation on the future for the Next American Economy project, Carl Camden, CEO of Kelly Services, suggests that temporary employment firms like his will become the purveyors of social services.

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Dr. Strangelove and the Halbig Decision

Jul 22, 2014Mike Konczal

"Yes, but the whole point of a doomsday machine is lost if you keep it a secret! Why didn't you tell the world, eh?" - Dr. Strangelove

So the DC Circuit Court ruled in Halbig v. Burwell hat health care subsidies can only go to states that set up their own health care exchanges rather than use the federal ones. That means indivdiuals from the 34 states who get subsidized health care from the federal exchange would no longer be able to get subsidies. (Another court ruled against this logic today.) I don't normally do health care stuff, but I've read a lot about this case and something strikes me as very odd.

As I understand it, those on the right who are pushing the Halbig case argue that there's a doomsday machine built into Obamacare. (Adam Serwer at MSNBC also caught this doomsday machine analogy.) If states don't set up their health care exchanges then they don't receive subsidies for health care from the federal government. According to this theory, the liberals who designed health care reform did this knowing that if subsidies were pulled, the system would collapse for states that didn't set up their exchanges.

It's important to note that those on the right are not arguing that this is a typo in the bill, because that wouldn't necessarily be sufficient to overturn the subsidies. They are arguing that Congress intentionally put this language in there to compel, bribe, incentivize, and otherwise threaten states that didn't set up their own exchanges. In the rightwing argument, liberals were saying "we are making the citizens of your state purchase health care, and if you don't set up an exchange they won't get the subsidies necessary to make the system work, so you'd better set up an exchange."

The right's argument hinges on the idea that since there's no evidence that this isn't the intent, it must be the intent. As the two authors of the legal challenge put it, Obamacare "supporters’ approval of this text reveals that their intent was indeed to enact a bill that restricts tax credits to state-run Exchanges. At no point have defenders of the rule identified anything in the legislative history that contradicts" their reading.

Here's the thing, though: like Strangelove notes, a doomsday machine only works if you tell others about it. So, why weren't the people in the vast network associated with Obamacare telling everyone about this threatening doomsday device after the bill passed?

If this was actually the intent, you'd expect that during the period where states were debating whether to set up exchanges, this would have been a major threat raised by somebody. Anyone, from President Obama to congressional leaders to health care experts and lawyers to activist groups on the ground in red states fighting for implementation, would have been saying, "if your state doesn't set up a health care exchange, your citizens are screwed. At the very least, you'll be leaving money on the table." ("Leaving money on the table" is always a good point to bring up, and if this doomsday machine really were the intent of the law, it would be true.)

I know of no evidence of this being the case. Does anybody? Numerous people are arguing that the legislative intent is clearly on providing subsidies to the federal exchange users. No wonder the dissent argued that the Halbig ruling was "a fiction, a post hoc narrative concocted to provide a colorable explanation for the otherwise risible notion that Congress would have wanted insurance markets to collapse in States that elected not to create their own Exchanges."

That doesn't change what the DC Circuit did, of course, but it should make a random person stop and wonder how much of a cynical ploy this whole thing is.

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"Yes, but the whole point of a doomsday machine is lost if you keep it a secret! Why didn't you tell the world, eh?" - Dr. Strangelove

So the DC Circuit Court ruled in Halbig v. Burwell hat health care subsidies can only go to states that set up their own health care exchanges rather than use the federal ones. That means indivdiuals from the 34 states who get subsidized health care from the federal exchange would no longer be able to get subsidies. (Another court ruled against this logic today.) I don't normally do health care stuff, but I've read a lot about this case and something strikes me as very odd.

As I understand it, those on the right who are pushing the Halbig case argue that there's a doomsday machine built into Obamacare. (Adam Serwer at MSNBC also caught this doomsday machine analogy.) If states don't set up their health care exchanges then they don't receive subsidies for health care from the federal government. According to this theory, the liberals who designed health care reform did this knowing that if subsidies were pulled, the system would collapse for states that didn't set up their exchanges.

It's important to note that those on the right are not arguing that this is a typo in the bill, because that wouldn't necessarily be sufficient to overturn the subsidies. They are arguing that Congress intentionally put this language in there to compel, bribe, incentivize, and otherwise threaten states that didn't set up their own exchanges. In the rightwing argument, liberals were saying "we are making the citizens of your state purchase health care, and if you don't set up an exchange they won't get the subsidies necessary to make the system work, so you'd better set up an exchange."

The right's argument hinges on the idea that since there's no evidence that this isn't the intent, it must be the intent. As the two authors of the legal challenge put it, Obamacare "supporters’ approval of this text reveals that their intent was indeed to enact a bill that restricts tax credits to state-run Exchanges. At no point have defenders of the rule identified anything in the legislative history that contradicts" their reading.

Here's the thing, though: like Strangelove notes, a doomsday machine only works if you tell others about it. So, why weren't the people in the vast network associated with Obamacare telling everyone about this threatening doomsday device after the bill passed?

If this was actually the intent, you'd expect that during the period where states were debating whether to set up exchanges, this would have been a major threat raised by somebody. Anyone, from President Obama to congressional leaders to health care experts and lawyers to activist groups on the ground in red states fighting for implementation, would have been saying, "if your state doesn't set up a health care exchange, your citizens are screwed. At the very least, you'll be leaving money on the table." ("Leaving money on the table" is always a good point to bring up, and if this doomsday machine really were the intent of the law, it would be true.)

I know of no evidence of this being the case. Does anybody? Numerous people are arguing that the legislative intent is clearly on providing subsidies to the federal exchange users. No wonder the dissent argued that the Halbig ruling was "a fiction, a post hoc narrative concocted to provide a colorable explanation for the otherwise risible notion that Congress would have wanted insurance markets to collapse in States that elected not to create their own Exchanges."

That doesn't change what the DC Circuit did, of course, but it should make a random person stop and wonder how much of a cynical ploy this whole thing is.

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