Ryan Plan 3.0 Versus Reality

Mother Jones reporter Stephanie Mencimer calls out Rep. Paul Ryan's poverty plan for what it is: a massive scam that's impossible and prohibitively expensive to implement.

Consider, as a hypothetical, the food stamp program, which Ryan thinks should require people to work as a condition of receiving the benefit (ignoring, for the moment, that nearly 60 percent of working-age adults getting food stamps already work). More than 40 million Americans get food stamps. Providing all them with a hand-holding caseworker with whom, under Ryan's plan, they'd draft long-term plans and contracts outlining their responsibilities and goals before they'd be allowed to eat, would require a fleet of roughly more than 700,000 social workers, assuming a reasonable caseload of about 55 clients per caseworker. Social workers don't make much money, with a median salary of about $44,000 a year. Even so, 700,000 of them would cost more than $30 billion a year, not including benefits. That's nearly 40 percent of what the country currently spends on food stamps and nearly twice the entire federal welfare budget. By comparison, the current food stamp program delivers 92 percent of its funding directly to people in need; only 5 percent goes to administrative costs.

Somehow, I'm doubting that conservatives are going to be super excited to pay for 700,000 new government employees.  But wait, what if these are all private sector or non-profit organization hires? Surely somebody has tried the Ryan Plan 3.0 before, right?

Turns out the state of Nebraska did just that.

Here are some numbers that aren't hypothetical: As part of its welfare reform overhaul, the state of Nebraska for several years attempted to do what Ryan seems to be proposing. Masters degree-level social workers, with tiny caseloads, delivered intensive personalized services, including home visits, to a group of welfare recipients, including a batch of extremely hard to employ single mothers. They attempted to get the women into the workforce and self-sufficient for the long haul. 

The program produced better results than any such program ever had. Almost half of the study participants went to work for at least a year, double the rate of the group without the individualized attention, and their earnings increased significantly. The clients who got the individual casework were less depressed, less likely to lose custody of a child, and more likely to receive child support. But they still faced food and housing hardship; they were still poor, if working poor. And again, only half the study participants went to work. 

So the program was a success.  But how much did it cost for all this specialized, attentive service?

Providing all those individualized services cost the state $8,300 per client—so much that researchers who evaluated the program concluded that the "benefits to society did not outweigh its costs during the study." The researchers speculated that if the successful program participants stayed employed for another two years, the effort might pay off, but individually helping these folks cost about $5,000 more than what those clients earned by entering the workforce.

The families might have been ended up in a slightly better place, at least for a while, but the state of Nebraska would have been better off writing them a $5,000 check and calling it a day.

So again, we come down to investing more money in the safety net instead of what Ryan wants to do: somehow getting states to give all these tailored, direct services by hiring private sector contractors, but to do all this with less money in a block grant.  It's impossible, and to do it right would be more expensive than it is now.

Which is precisely why the safety net today really doesn't deliver the kind of customized service that Ryan thinks it should. It's just too expensive, too hard to provide on a large scale, and in the end, not all that more effective than simply giving people money they need to keep the lights on until they can get back on their feet on their own. Is Ryan, whose budgets have proposed deep cuts to the food stamp and other poverty programs, really going to advocate spending billions to help all the nation's low-income people identify their "opportunities for growth" and craft long-term goals as a condition of getting federal aid? It seems unlikely.

Which is the point.  Ryan knows his plan is impossible to implement correctly.  When it doesn't work, the problem will be that government isn't capable of helping anyone, and that we'll of course need to make cuts to eliminate the waste.

When you design a government program to fail, it fails.  Ryan's trick is that he's programming in a catastrophic failure while making it look like it's a good idea.