Fighting poverty at the local level

Overview

It’s time to take a careful look at our numerous and expensive federal antipoverty programs and implement reforms that enable us to better help our friends and neighbors get out of poverty — and stay out.  Instead of continuing the big government status quo, federal welfare policy should be focused on empowering those who are currently fighting poverty effectively in our nation’s states, cities and communities.  

Woman holding heart in the city.

Our aim should be to support local innovators, reduce unnecessary regulation and, when appropriate, support local civil society groups that are providing material support (i.e. food and housing assistance) with targeted grants.

  • Poverty looks different all across America, but Washington tries to fight it with a one-size-fits-all approach

  • Give states more flexibility to help the poor

    In recent years, there has been an increased focus on the problems with trying to fight poverty primarily from within federal government programs run out of Washington D.C. -- and on how to move antipoverty efforts to state and local governments, where leaders have better visibility to the unique needs of the people who need help.

    One idea that has gained traction in the Senate -- which was introduced by Senator Marco Rubio in 2014 -- is to consolidate federal programs into a "flex fund."  Senator Rubio explains the idea:

    "Our anti-poverty programs should be replaced with a revenue neutral Flex Fund. We would streamline most of our existing federal anti-poverty funding into one single agency. Then each year, these Flex Funds would be transferred to the states so they can design and fund creative initiatives that address the factors behind inequality of opportunity." 

    House Republicans outlined a similar idea in the antipoverty section of their "A Better Way" initiative.  The document featuring their best ideas to help people in poverty includes the following:

    "State and local governments should be allowed to develop new ways of addressing incentives for all stakeholders. Instead of the federal government continuing to develop policies separately for each of the more than 80 welfare programs, states should be allowed to link these programs in a way that provides a more holistic approach for families they serve. When someone faces disincentives to work or marry, states should test ways of repackaging welfare benefits to reward desired outcomes. In exchange for more flexibility, states must also be held accountable, and each demonstration should be paired with an evaluation to determine whether state policies are achieving real results for those in need."

     

     

  • Reform and improve one of the most successful federal anti-poverty programs, the Earned Income Tax Credit

    American Enterprise Institute economist Angela Rachidi explores the benefits and costs of expanding the Earned Income Tax Credit (EITC) to be more generous to childless workers. Such a proposal would help many struggling Americans, particularly younger workers, as the EITC overall has helped single mothers and families.

    However, any expansion raises concerns about extending government assistance to many people without dependents who should be able to adequately provide for themselves. And the cost of expanding the EITC could eventually reach billions of dollars a year.

    Among Rachidi's key findings:

    • "Proposals for an earned income tax credit (EITC) expansion for childless workers vary in terms of the size of the credit, the earnings limits for eligibility, and eligibility exclusions. These variations have important implications for who benefits and the associated costs.
    • An expansion of the EITC for childless workers could reach 8-14 million workers and cost $5-8 billion in new spending, depending on whether students are excluded and work requirements are adopted. A more generous option could reach 21 million workers but would require as much as $22 billion in new spending.
    • Young people (ages 21–24) are the primary beneficiaries of proposed expansions, as are men, who would receive approximately 55–60 percent of benefits from any expansion. Women, older workers, and married couples also benefit, but to a lesser extent.
    • Student exclusions and work requirements would lower costs but may be difficult to administer."

    Read Angela Rachidi's full briefing on the Earned Income Tax Credit here.

    Additionally, American Enterprise Institute economist Michael Strain in a column for Tribune Media breaks down the problems with the simplistic approach of raising the minimum wage. While some impacts, including job losses, are widely discussed as the policy debate continues, Strain highlights other problems.

    For example, only 19 percent of the expected earnings increase for those working at the minimum wage would actually go to households living in poverty. Almost 30 percent would go to households with an income level three times the federal poverty limit. Because many of the workers earning minimum wages are young people living at home with their parents and are middle class already, the minimum wage is a deeply flawed anti-poverty solution.

    A much more targeted approach would be to raise the Earned Income Tax Credit, which is targeted at workers with low wages. It incentivizes work, doesn't destroy jobs and impacts those who need it most.

    Read Michael Strains column on the advantages of the EITC over a minimum wage hike here.

  • Heather Reynolds
    President & CEO of Catholic Charities Fort Worth - implementing best practices on the ground to help families escape poverty once and for all

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    “...Individualized, holistic case management is the critical element in moving someone from a place of dependence on government or charity ...

    “...Individualized, holistic case management is the critical element in moving someone from a place of dependence on government or charity to a place of self- sufficiency.”
    Why They Matter

    From her bio at Catholic Charities Forth Worth:

    Heather Reynolds is the President and CEO at Catholic Charities Fort Worth (CCFW). Reynolds, 36, oversees the strategic direction for the Fort Worth based, $27 million non-profit. With nearly 400 employees and four locations throughout the 28-county diocese, CCFW served over 100,000 people last year, up from 55,112 when she took the helm as CEO at only 25.

    A 14-year veteran at Catholic Charities Fort Worth, Reynolds has extensive ...

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  • Paul Ryan
    Speaker of the House dedicated to doing more to help the poor

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    "We have to work on restructuring our welfare programs so they aren’t trapping people in poverty."

    Why They Matter

    From his official website bio:

    Born and raised in the community of Janesville, Paul Ryan is a fifth-generation Wisconsin native. Currently serving his ninth term as a member of Congress, Paul works on many important issues affecting Wisconsin residents and is an effective advocate for the First Congressional District. 

    In October 2015, after then-House Speaker John Boehner retired from Congress, Paul was elected House Speaker. A committed conservative and public servant, Paul has spent ...

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  • House GOP’s Anti-Poverty Plan Draws From State Successes in Kansas, Maine

    (House Speaker Paul Ryan, R-Wis. / Photo: AP) Earlier this summer, Speaker of the House Paul Ryan (R-Wis.) released “A Better Way,” the congressional Republicans’ agenda for moving Americans out of poverty and welfare dependency and into independence and success. The document was “developed with input from around the country, …

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