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Panel: The COVID-19 Economic Recovery, Inequities, and helping Working Americans

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By: AIF Staff

Earlier this week, American Idea Foundation President Paul Ryan took part in a bipartisan panel discussion hosted by the Brookings Institution’s Hamilton Project. The conversation, entitled Resilience After Recession: The Emerging Landscape for American workers and families, centered on how the COVID-19 pandemic has exacerbated economic disparities and how policymakers can ensure that workers, families, and children have the support necessary to thrive and prosper.

Along with experts and thought-leaders from across the ideological spectrum, Speaker Ryan shared his thoughts on the Democrats’ proposed reconciliation package and discussed provisions of the legislation that will, and in some cases, will not, assist lower-income Americans in successfully navigating the post-COVID economy. He also touched on how evidence and data provide opportunities to cut through partisan gridlock that is leaving too many Americans struggling economically.

The panel discussion is accessible below. Excerpts of Speaker Ryan’s remarks, edited slightly for clarity, follow.

Concerns with the Democrats’ reconciliation bill and its potential economic impact:

“It should come as no surprise that I think this reconciliation bill would be a big mistake for a couple of reasons, but I’ll try to say something positive about it at the end.

“Number one, I think it’s going to do a lot of harm to our economy. Just with these tax provisions alone, you’re going to reignite inversions. You’re going to bring the business tax rate for corporations and pass-throughs back to the highest in the industrialized world when you add state taxes on top of it. As a result, you’re going to make American workers and companies much, much less competitive.

“New inversions are going to start. You’re going to slow down job growth and slow down economic growth and at a very basic level, where we should start with is [agreeing] that we want economic growth. You cannot have upward mobility without economic growth. I like the fact that our labor markets are tight, but I want to make sure that we have jobs that can pull people into the workforce at higher-paying jobs and that depends on economic growth. If you make it harder for the job-producers and smaller businesses to expand and grow, as this bill does, then I think you’re going to be self-defeating in that area. Then the fiscal effects from this, you take a look at this bill, and I spent my career doing reconciliation, it’s kind of a fiscal train wreck.

“The Democrats are disguising the true cost of the bill and they’re disguising how much money you’re going to actually raise in revenue from the pay-fors, so I don’t think it is paid for and it’s going to give us a huge fiscal headache. Our debt and deficits are going to get out of control. This will put pressure on our dollar as a world reserve currency and our economy is going to slow down with bad tax policies.

“If we lose sight of the debt and deficits and the cost of financing our social contract, it becomes really difficult to finance and think of the social chaos and the political chaos that would occur with a debt crisis. First, let’s focus on getting this economy growing and, like I said, before COVID, the bottom two quintiles of income earners were getting the biggest wage increases they’ve ever had, so we had real standard of living increases.

“In addition to this, I think this [reconciliation bill] is going to increase inflation in the economy.  I think a lot of these spending programs will convert inflation from what was hopefully temporary to more structural, so I think this bill is going to give us the wrong kind of pressure on inflation. I think that the reconciliation bill would be a big mistake.

Finding specific policies within reconciliation that both parties can embrace:

“Let me try and find something positive to say about it: I think the Earned Income Tax Credit (EITC) reforms are good reforms and that is something I’d like to see both parties embracing. I tried doing an EITC expansion for childless adults and I think that’s just a no-brainer. The data is really clear on this….

“We also need to have it embedded in the first paycheck on a monthly basis. There’s a systems problem at Treasury that we need to overcome but the Childcare Tax Credit and the EITC should not be a lump sum at the end of the year, it should be embedded in the paycheck. I think that’s something that everybody should come together on because the data is really clear that that really works.

“There are some discrete points I think that could be passed and that people on both sides could embrace, but I just think the reconciliation bill, particularly because the tax policy and the fiscal time-bomb and nature of these entitlement programs will actually give us a worse situation and slow down economic growth.”

What policymakers can do to ensure a more robust and equitable economic recovery:

“One thing I think we should focus on is data. My foundation is focused on making sure that the Evidence Act is well executed. The Office of Management and Budget is leading on this and I think there’s a lot of room to improve data collection, especially since COVID, because blue collar workers were harmed so much more than white collar workers.

“And so, I think there’s a lot of room for data collection and room to improve the evidence around these policies around workforce training. There are a lot of workforce training programs out there, but the problem is we haven’t really tracked the evidence of success. There are some that have been done using randomized control trials (RCTs) that show where success can be had, so my argument at this moment is: Let’s use data to find out what works and to find out what doesn’t work. I think there’s an opportunity to follow the data.”

Rethinking and customizing our social insurance system:

“I think in the 21st century with data and digital advances and with the economics field that we have currently, we can re-think how we design our social insurance system. I mean, look at my own experience with EITC and just trying to make it monthly. I didn’t have any problems with my side of the aisle. I didn’t have any problems with Democrats. I couldn’t do it because the federal government just couldn’t do it. This stuff is just ridiculous.

“And so, I really believe we need to rethink the way our systems work and the way we design our benefits. We just paint everyone with the same brush. We treat everybody the same and as a result of this bad macroeconomic policy, we have bad micro-economic policies with benefit offsets and with benefit cliffs and that really sets people back.”

The need to modernize the social safety net:

“We have a 20th century social insurance system that we need to turn into a 21st century social insurance system… I really do think our entire social insurance safety net is due for an overhaul. It should be based on data, based on evidence, based on what is proven to work, and yes, we should do some experimentation. We should run some RCTs across the board but I think adding new programs on top of old failed programs and hoping that it’s going to be done differently or produce new results is just not going to work and is the same mistake that we’ve been making.

“Frankly, given what we have in technology, in data and analytics, and in digital technology, I really believe we can streamline our social insurance system with an eye toward proven methods of upward mobility to help those people who historically have not gotten ahead. I think the pandemic hurt the least among us the most and I think Michelle was right about the post-2008 recession, it was the wealth effect by the Federal Reserve which helped people at the top do extremely well and we had stagnation below that because of bad fiscal and regulatory policy.

“I think there are better policies to get us faster economic growth, faster wage growth, better living standards, but throwing on top of it brand new ideas that are untested and putting them on top of a creaky social insurance infrastructure from the 20th century that is not meeting its potential, I just don’t think it is a smart move and I think it’s going to give us a huge debt hangover. I think it’s going to be bad for our economy.

“I would take today’s technology, overhaul the social insurance system, focus on getting the incentives right, the benefit mixes right, and the thing that always bothered me when I studied all of this stuff is the benefit offsets….

“I think there’s a way of dealing with the benefit cliffs so you can customize benefits on a per person basis using technology and using good economics so that it always pays to move ahead. You’re always making sure that the benefit mix – whether it’s job training, childcare, transportation, I’m in Wisconsin so heating, is designed properly so that a person is always on the curve on the way up and you don’t have all these benefit cliffs knocking them back. That’s what I would be focusing on right now to try and build a 21st century social insurance system that is durable, effective, and by the way, affordable, and that doesn’t bankrupt the country.”

Panel: Ryan, Practitioners, & Experts on Promoting Entrepreneurship & a 21st Century Workforce

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By: AIF Staff

Last week, as part of its quarterly policy panel series, the American Idea Foundation hosted a conversation with leaders of evidence-based workplace training and education programs to discuss how policymakers can work with community-organizations and philanthropies to help Americans reach their economic potential.

Detailing customized adult-education models, innovations in venture philanthropy, and data-driving job-training models, experts from Per Scholas, Goodwill Industries, New Profit, and the American Enterprise Institute discussed their successes and their challenges as they assist adults who want to further their education and develop vocational skills.

The panel conversation showcased how data-drive efforts are being deployed around the country to assist more Americans realize their version of the American Dream. Joining Speaker Ryan for a conversation about promoting entrepreneurship and a thriving 21st century workforce were:

–          Betsy Delgado, Vice President of Mission & Education, Goodwill of Indiana

–          Plinio Ayala, President & CEO of Per Scholas

–          Brent Orrell, Senior Fellow at the American Enterprise Institute

–          Jeff Nelson, Entrepreneur in Residence at New Profit

The panel discussion is available below and some notable excerpts follow.

Speaker Ryan on the importance of evidence-based workforce training & education models:

“The professional class in America has weathered COVID pretty well. Higher-income people didn’t see a huge income decline and we didn’t see lots of lost jobs, but that is not the case with working-class Americans, who are getting really hard with COVID. Policymakers at the federal, state and local level have been grappling with how best to help these individuals and grappling with what’s the right policy mix. So today, we want to talk about one area that is vital to supporting these individuals who are trying to get through COVID, who are looking for employment, or looking to improve their employment position, and that is the workforce development and the job training space…

“Specifically, the panel is going to discuss three areas that matter as we try to ensure that these programs are working and that they are working well.

1)      Very little evidence surrounding the efficacy of most job training or vocational programs actually exists, so what works, what doesn’t work, and what can we do to better identify solutions?

2)      How do you scale things up? How do you see huge differences in trying to scale effective social programs or deal with a situation where one program might work very well, but is unable to be replicated in other places? How do you build something that has proven evidence to work and then how do you scale it?

3)      What are the structural impediments or issues from a government involvement standpoint and what can be done at the policy level to assure that we can scale up effective evidence-based programs?

“As an example of why this issue matters, the American Idea Foundation recently visited the Nurse-Family Partnership Program in South Carolina. I’ve been enamored with MIECHV and the Nurse-Family Partnership program for many years. This program solved a lot of issues. They developed an evidence base. They scaled their programs and they have federal legislation that helps to fund and continue identifying evidence-based programs, and they’ve got metrics that show the program works. They have success they can point to and several of our panelists today are at the very beginning stages of a very similar journey.”

Betsy Delgado on the Excel Center’s evidence-based “secret sauce” & scalability:

“We decided to work with the Laboratory for Economic Opportunities (LEO) because we knew it was really important to have evidence on the results of the Excel Center. We know that 2 out of 3 people who don’t complete a high school diploma are low-income and they make 70% less than those with a high school diploma. So, we know, in our walls, with our 10,000 plus students that we serve across the country that we are working with the most vulnerable, marginalized families and we wanted to make sure that by working with LEO, they would help us understand how a high school diploma from the Excel Center translates into post-secondary career success for our graduates and our families.

“The other thing that was interesting to us is our General Assembly [in Indiana] really wants to make sure that we’re coming back and demonstrating to them these results so they can understand the return on investment of state dollars in our students….

“We use these results from LEO to make improvements to the model so we can better serve our students and their families. And also, as we help the Excel Center network open schools, we want to make sure to maintain fidelity to our work as we scale and replicate. We just launched our RCT that is going to look at our justice-involved students to make sure that our coaching model is wrapping around to these students and their families to demonstrate the same outcomes that we expect to see from the entire model. It has been an incredible partnership. It’s hard but it’s incredibly important but we want to serve our families well…

“Some of our team would say that the secret sauce is our coaching model and that wraps around services for our students, their children and their families. Over 50% of our students have young, school-aged children, so we have to consider the whole family in this model and in the services that we provide. Our services include life-coaching, housing, food, technology, health and employment. Also, we have free childcare on site and we offer free transportation. When we enroll, every student is provided with a life coach that stays with them for their entire educational experience, and their job is to make sure that the students can actually experience economic, educational outcomes that we are striving for them and their families.

“I think the second [secret sauce] would be that it’s the rigorous curriculum that we offer at the Excel Center: in-person learning, all of it meets the state standards, and we only employ highly-qualified teachers. This results in adults earning a state-certified, high school diploma that is recognized…

“And then my final thought on the ‘secret sauce’ is we take the two-generation approach. We think of the whole family. We want full families to thrive. And so, we know that the children of parents who have not completed their high school diploma are 50% more likely to drop out themselves. We know, because of our research, the children of our graduates now have a parent who just graduated from high school, which makes it more likely that their child will graduate themselves. And then finally, we know we’re helping families change their economic trajectory for this generation and then generations to follow.”

Per Scholas’ Plinio Ayala on why more non-profits don’t utilize Randomized Control Trials (RCTs):

“I would answer that by saying that the risk is significant and the reward is negligible. And so, an organization that goes through an RCT and doesn’t show impact, there is a fear of reputational hits and a possible loss of funding. I think as a space, we need to get better to allow organizations that go through evaluations to use them to improve the quality of their work as opposed to punishing them.

“I think Betsy alluded to this as well, but the cost of an RCT is significant and not just in the study itself, but the cost that an organization has to bear to build the infrastructure to conduct an RCT is usually not accounted for in any of these budgets. And lastly, to the reward piece, we have gone through two RCTs and I have not found a channel for funding, at least on the government side, that allows me to scale and scale pretty significantly. The question here is how do we incentivize organizations to participate in this with the understanding that if you show positive results, there will be some investments ready to be made in you at the conclusion.

New Profit’s Jeff Nelson on how philanthropic investments can incentivize successful-models:

“New Profit is a venture philanthropy that started 23 years ago with social entrepreneurs, like Betsy and Plinio, to try to tackle major poverty issues in the United States with unrestricted funding, a lot of capacity building, and then we try to parlay it into federal policy change. I have a couple pieces of advice around trying to create better incentives for quality evidence in the state.

“Needless to say, all sourcing and selection efforts should integrate and prioritize evidence as the central tenant to the investment selection, but way more than that, a couple things that we’ve seen in the last five years:

“One is that evidence planning really matters. Both Betsy and Plinio referenced this. This is not something you wake up on a Wednesday and say we’re going to start doing this next week and we’re going to hire a great team at Notre Dame and we’re going to integrate it. Philanthropies can create incentives in their process to bring in technical assistance for evidence planning and to actually track and support entrepreneurs to make progress on their plans throughout a multi-year gift.

“The second thing would be to integrate return on investment calculations into the process so that you’re taking costs into account in parallel with evidence.

“Third would be to really consider a holistic approach to building evidence. Evidence is both an ongoing commitment to the external evaluations with RCTs or well-designed, quasi experimentals, but it’s also about building good data systems and processes to continuously improve and to create a data-rich environment. And when funders are making investments and elections, they should consider what we call a “preponderance of evidence….”

“We would advocate strongly that you bring on social entrepreneurs like Betsy or Plinio, and you pay them well as Executives in Residence — like an hour a month, two hours a month to be advisors in the process, because they’ve actually gone through what is honestly a really hard thing to tackle, which is to integrate evidence-building into a high-scaled organization.

And then the last thing would just be that, like we are suggesting that there are structural issues at the federal and state government level, we would also advocate that philanthropy needs to have a proportional approach to its investment portfolio.

“If you have an organization like Per Scholas that has a body of evidence and a pathway to scale, there should be proportional investments for something like that. In other words, if it’s taking a while for government to catch up or to create the incentives, at least philanthropy should be able to move quicker to be rewarding those entrepreneurs like Plinio or Betsy, who are undertaking what they are undertaking now.”

AEI’s Brent Orrell on the proper role of government to promote upward mobility:

“You were talking about Nurse-Family Partnership and NFP is not just the gold standard for what it does in terms of short circuiting inter-generational poverty. It’s also the first item on everybody’s list of evidence-based practices because they have been building it for 30 years. They have collected 30 years of longitudinal data and they are so insistent on following this model of pairing registered nurses with first-time, single moms. It is just the example of how to do this right and it has gotten amazing results and we’ve all been in favor of all of its expansion over time.

“The problem is that it’s a unicorn in federally-funded services programs in terms of those kinds of results. So why don’t we get better results from other programs?

“It’s a multifaceted problem. We’ve got a lot of people claiming great results for their programs, because, in fact, intentionally or not, they’re creaming the population. They’re getting the most able people into their programs, whether they mean to or not, and so, when you put that back in to the general population, it doesn’t work. You don’t get the same kinds of results….

“Counter-intuitively, I think that no results or negative results are actually pointing us towards something that’s really important and that is that sometimes people do better with less intervention. This cuts against our desire to be activists in the lives of others and we all want that. We all want to make a difference but if our evaluations are showing us that either we’re not making a difference or, in some cases, the control groups and people who don’t get services do as well or better than the people who are getting services, I think that should speak to us. 

“What it says to me is we really need to focus on approaches that build agency in the lives of people, rather than build our agencies. We’re not investing in programs. We should be investing in building the agency of people to take advantage of opportunity.

“There are good examples of this. In the workforce realm, we have these things called “Individual Training Accounts,” which are essentially vouchers for people who go out and get training so they go get the job that they think they need. These work very well and most of the time it is a fairly light touch from the government, so it is providing resources but we’re not intervening in the lives of individuals. There’s a fantastic project in the Bay Area called the “Family Independence Initiative,” which has a no-helping rule. What they mean by “no-helping” is that they’re coaching families to identify the resources that are already available to them through other members of their families or the community to solve their problems rather than always turning to a government agency and it has had some interesting and profound effects in communities where it’s operating. What connects all this stuff is they focus on freedom and the development of personal agency rather than on surrendering that agency to a government or a non-profit organization….

“What I’d like to see is an expansion of incentives for programs that focus on the development of personal agency and autonomy, along with rigorous evaluation so we can tell: “Is this a real thing? If by providing a lighter touch, are we helping people more?” I agree with Paul that good case-management is always an element of success but it has to be good case-management but that means having a coaching model that promotes a pathway towards independence.”

Note: Former Speaker Paul Ryan serves as a policy fellow at the American Enterprise Institute and is a visiting lecturer at the University of Notre Dame.

Former Speaker Paul Ryan on Bob Woodson’s decades-long effort to improve communities

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By: AIF Staff

In early September, one of former Speaker Paul Ryan’s mentors, Bob Woodson, announced his retirement after 40 years of leading the Woodson Center, an organization dedicated to changing lives and communities from the ground-up. Speaker Ryan paid tribute to Woodson’s impact and his legacy, stating in part:  

“The positive impact Bob has made in countless people’s lives and in communities across the country is simply profound.

“Bob has been so effective because he believes in the inherent good of every person he meets. He has an unbending faith in people’s tenacity and determination to better themselves; he believes in the power of redemption; and he is an eternal optimist. There is a generation of community leaders who owe their success to Bob and who will undoubtedly continue evangelizing his belief in free markets and the principles of the Gospel.”

Woodson’s career and impact were recently detailed by the Washington Examiner’s Salena Zito, in a piece titled: Robert Woodson retires after 40 years of empowering communities. Among the notable excerpts from the piece:

When Paul Ryan and Robert Woodson first came here nearly 10 years ago, the Republican congressman from Janesville and the civil rights icon had something in common. They both believed that poverty and generational crime in black communities was best remedied not by big government programs, the monies of which typically go more to staff than those in need, but instead by the community members themselves…

The former speaker of the house said in an interview with the Washington Examiner that what Woodson showed him was life-changing. “One of the best things I did in my career was ask Bob Woodson to teach me about poverty,” he said.

Ryan said he spent about four or five years touring poverty-stricken areas on a monthly basis, making connections with people who can make a difference. “I did this with no media or anything like that, just to learn, and it was transformational to me,” he said. “And it’s helpful to what I do now….”

Woodson’s approach was based in experience, he said. He understood that just because people were living in a community on the edge, it didn’t mean they weren’t looking around it for examples of integrity, dignity, and honor. “My approach was to be that vehicle to provide those examples,” he said.

Woodson said he began his career at the height of the civil rights movement in the 1960s in Philadelphia…. Eventually, in 1981, he founded the center to guide residents of low-income neighborhoods so that they could address the problems of their communities themselves.

“The man made a mold for using foundational principles to attack the problem of poverty at its root cause and to empower individual people to take control of their lives and their neighborhoods,” said Ryan. “And he never lost sight of his principles. He never lost sight of his goal. And he always, every time, thought about how we can make lives better for people in transformational ways.”

Ryan said Woodson moved the needle on poverty to where it is much more effective. “And he’s done it in a way by applying these timeless principles that we as conservatives believe in,” he said. “There’s just nobody else who has done anything like it. And he’s just a man who sees truth for how he sees it. And he speaks passionately about his sense of truth. And he’s always on a quest to learn….”

“I am trying to get more people to take the Woodson model and replicate it so that we can make a huge difference,” he explained. He is also trying to get young conservative policymakers to focus on poverty and do the same thing.

Woodson said his retirement doesn’t mean the public will not hear from him. “Well, you retire from a job, but you expire from a calling,” he said. “I’m never going to fully disengage.”

Learn more about Speaker Ryan and Bob Woodson’s efforts to empower communities and expand economic opportunities here.