By: AIF Staff
Washington, DC – Earlier this week, American Idea Foundation President and former Speaker of the House Paul Ryan took part in a conversation with Public Private Strategies and the Niskanen Center about the implications of the midterms on key tax policies.
As part of the discussion moderated by Katie Viletstra Wonnenberg of Public Private Strategies, Ryan talked about reforming pro-growth programs like the Earned Income Tax Credit so they promote upward mobility and incentivize work. Ryan also detailed how bipartisan consensus could be found in divided government and outlined the need to reform our social safety net so it better supports Americans in-need.
Excerpts of the panel discussion follow.
Ryan’s long history working on the Earned Income Tax Credit (EITC):
“I have spent basically my entire adult life [working] in tax policy and on poverty policy like the EITC and those types of reforms. I chaired the Ways and Means Committee before I was Speaker, which obviously has this jurisdiction, so it’s an issue I’ve been involved in for a long, long time. It’s an issue that I still work at Notre Dame, at my foundation, and at the American Enterprise Institute where I’m a fellow so it’s something that is very near and dear to my heart.”
An example of Evidence-Based Policymaking working:
“Republicans and Democrats have very different opinions on how the safety net should be designed, what kind of incentives should exist, how programs should be structured and designed, and all the rest. I decided, let’s go down this evidence path and I created this Evidence-Based Policymaking Commission. Senator Patty Murray was my partner on it. I made it very bipartisan and we passed the Evidence Act into law and what we were trying to do was be one of the innovators with evidence-based policymaking… where we just use evidence to guide what we do, how we design programs, where we place money, and that is sort of post-partisan and non-partisan….
“The best example I can give is MIECHV, a women’s and early childhood intervention program. The Nurse-Family Partnership program, [which is part of MIECHV] was started under Bush, Obama continued it, and Trump reauthorized it. Why?
“Because it had really good data, evidence, and analytics that showed this program works extremely well. Going down the path of producing evidence using randomized controlled trials, using evidence, peer reviews, and all of the rest, I think can really be the secret sauce to how you can get things done with whomever is running Congress, but particularly in a divided government because one side is not going to be able to completely dominate the other side. The way to split the difference on the sort of partisan and ideological divides is through very clear evidence….”
How advocates can use evidence-based policymaking to advance sound policies:
“I think evidence-based policymaking and using evidence is the way to go. If people are coming in the door to talk to the new chairman of new committees, like the new Ways and Means Chairman in the next session, you have got to have evidence. You can’t just make an emotional appeal. You can’t just make a partisan appeal and an ideological appeal. You’re going to need to make an evidence-based appeal and bring people from both sides of the aisle with you to say: ‘Hey, we’re just following the evidence. This is proven to work. This works really well.’”
Reforming the EITC & CTC to promote work and upward mobility:
“There is a concern on my side of the aisle, among my sort of ideological brethren, that if you do not have work as a component of the benefit, you have a serious problem and you’re going to create people who are stuck in a cycle of dependency where they’re not going to have upward mobility.
“On my side of the aisle, talking with people who spend time in the poverty space, having work tied to benefits is extremely important. So, in the Child Tax Credit debate, there was a lot being proposed that severed the connection to work and that is where you’re going to have a problem with my side of the aisle.
“When you’re dealing with a Republican or conservative or whatever you want to call the person, you do not want to disincentivize work. You want to encourage work, because work works. Work creates upward mobility. Work gets people out of poverty. The last thing a person on my side of the aisle would want to sign up for- and I think this speaks to the Senator Joe Manchin point — was if you [reform the program] in such a way that severs the connection to work, you’re going backwards.”
Empowering states to experiment and scale evidence-based strategies:
“I think federalism is going to make a big difference. You’ve got to give states the ability to go out and experiment and come up with some new solutions and then contrast and compare them to one another. This is what we did with welfare in the 1990’s. I do think if you give states big enough waivers with a lot of their money to experiment with these ideas, you’re going to find some successes that can be scaled and replicated later on.
“That’s basically what my foundation worked on. We built a clearinghouse of scalable, replicable poverty solutions that can be expanded out. I’m actually excited. I think we’re on the cusp of a new form of poverty, fighting with evidence-based policymaking and proven scalable solutions that have just great track records of success. It kind of gets the partisanship and the ideology out of it.”
How to address inflation and prevent a debt crisis:
“I’m really worried about this. I’m worried we can lose our dollar’s status as the world’s reserve currency, which means we will not be able to afford the social contract that we have right now, let alone do more.
“Here’s where people may not like the answer: You’ve got to work on the big entitlements. If you want to free up fiscal space for other things that government is supposed to do like safety and security, you have to work on the health care entitlements, specifically Social Security, Medicare, Medicaid and the Affordable Care Act. You’ve got to get these things under control because they themselves will just chew up the rest of the budget and you literally cannot mathematically tax your way out of that. If you try, you’re going to kill the economy, you’ll slow down the economy, slow down wage growth, slow down productivity and jobs.
“You’ve got to have economic growth. If you want an escalator of upward mobility, we need to obviously have a better design for safety net programs to allow people to get on the escalator of upward mobility. But you have to deal with these big earned entitlements and get them under control….
“We know how to do it. We just never had the politics to do it but if you care about discretionary spending, or even the safety net and mandatory spending, you’ve got to get these big things under control this decade if we’re going to have a chance of getting out of a debt crisis and so, looking for new revenue, frankly, doesn’t make a whole lot of sense. It’s our spending that is really going off the charts.”