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Ryan advises lawmakers to channel President Coolidge & tackle America’s fiscal problems

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By: AIF Staff

This week, American Idea Foundation President Paul Ryan served as a keynote speaker at the Calvin Coolidge Presidential Foundation’s conference entitled: America in Debt. Held at the Library of Congress, the conference gathered a bipartisan array of elected officials, senior leaders in recent Administrations, noted historians, policy experts, and economists for a discussion on how the lessons learned from America’s 30th President, Calvin Coolidge, could help solve our nation’s 21st fiscal challenges.

Concluding the conference with a panel on “Looking to the Future: Solutions to America’s Debt Challenge,” Ryan, along with Steve Forbes and Romina Boccia of the CATO Institute, outlined ways that policymakers can channel Coolidge’s approach to a fiscal discipline and balancing the budget. 

In his remarks, excerpts of which are below, Ryan shared his experiences passing revolutionary balanced budget proposals through the House, making the case for sensible entitlement reforms, and developing a consensus on how to avoid a debt crisis.  

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I sincerely appreciate Amity Schlaes, Bill Beach, and the Coolidge Foundation convening this gathering. It is amazing to see old friends like Congressmen Chris Cox and Jeb Hensarling, with whom I spent years working on these big, fiscal issues.  The numbers have grown since then, but the fact remains that this is the most predictable economic crisis we’ve ever had. 

We all know our debt is out of control. We all see a debt crisis coming. We don’t know exactly when it’s coming due. We don’t know the exact inflection point. If you ask an economist or a bond trader, they will give you different theories, but they all agree America’s fiscal path is unsustainable.

The problem that our nation has is, despite knowing a debt crisis is coming and would do bad things to our economy, our politics remain fundamentally unserious. It’s why I am glad you have focused on solutions today. I am hopeful that Steve and Romina will present some more because we have a backslid on this issue. 

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In the good old days, like just ten years ago, Republicans used to offer comprehensive proposals to solve this problem. During the Tea Party era and after, there were different plans to balance the budget and save our safety net programs on the Republican side of the aisle. In the House Budget Committee, Jeb Hensarling and I helped author proposals every year, from 2007 to 2018, that paid off the debt and strengthened entitlement programs by putting premium support into Medicare and block grants into Medicaid. The proposals showed, using CBO supported baseline-scoring, that America could balance its budget. It took a major lift to communicate these policies and gain the support of our colleagues, but Congressional Republicans have done this before. 

Those budgets had so many different elements to it, but in the interest of time, I’ll try to simplify the equation. 

Basically, entitlement programs are driving out debt. Obviously, the federal government needs a discretionary cap number so there is a clear budget level set, year in and year out, for discretionary spending. Ideally, this topline discretionary cap number is set at the beginning of a year so Congress can have a budget process – and there was a failed attempt at doing that this year – but with that level set, Congress can focus on mandatory spending, which is the heart of the problem. 

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Since we are at the Coolidge Foundation’s Conference, I would argue that many of the debates in America, from around the Coolidge Administration to the end of the 20th century, were debates over policies like the New Deal and the Great Society. At this point, it is safe to say that those debates are momentarily settled. Both parties tend to agree that the social contract, which can be described as health and retirement security and a safety net for those who slip through the cracks, is something America wants, needs, and wants to preserve. 

Neither the Democratic Party or the Republican Party are looking to abolish this social contract. Republicans aren’t proposing to get rid of Medicare and retirement security programs. 

So, knowing there is a consensus on having this social contract and safety net, policymakers need to also accept these programs were designed in the 20th century in a way that is unsustainable in the 21st century. Policymakers should accept that since these programs’ founding, we have had massive advancements in economics and technology, and we should apply those lessons so these programs can continue fulfilling their missions without bankrupting the country. 

I believe there is a lot that technology and the markets can do to help with this, particularly as it relates to health care entitlements. Private competition and choice can do a lot to make these programs work better, deliver better services and lower costs. Congress also should consider converting these programs into effectively, defined-contribution programs that grow at fixed rates. Pick your rate, but this, in and of itself, can wipe out trillions in unfunded liabilities on an accrual basis.

On the policy side, our proposals were clear: Address challenges in Medicare by grandfathering the grandparents. Congress can grandfather existing seniors into the current program, so the government keeps the current promises made to them – promises which are unfundable right now. It can then put reforms in prospectively, for future seniors, allowing these new systems to grow at set rates and harnessing the power of choice, competition, and market delivery systems. 

If programs are growing at fixed rates and utilizing better services and technologies at lower costs, America can avert a debt crisis. The bond markets would reward Congress for the effort, even though the debt would increase as Baby Boomers retire because it will come down once those defined-contribution programs kick in. This trend was always supported in our budgets and shows one way to step in front of a debt crisis and solve this problem. 

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There are a few other closing points: 

First, America can’t solve its fiscal challenges without economic growth. Congress needs to be careful what it does on economic and tax policy because economic growth is critical to fixing our problems. Growth is a necessary ingredient to America’s continued prosperity. 

Second, America needs presidential leadership on this issue. Both frontrunners for the White House are actively campaigning against doing anything on the debt problem. Both Presidents Biden and Trump are campaigning against legislators who propose to solve this problem. This is not helpful and increases the possibility that, after the Federal Reserve is done cutting interest rates and after debt comes due in 1st world countries facing similar demographic issues as America’s, there could be an auction failure. I shudder to think what happens then, but this could happen in the next presidency. Either way, Presidential leadership is likely required to seriously tackle this problem.  

Third, both parties have backslid on this issue in Congress so the most likely way to solve these programs’ looming insolvency and avert a debt crisis is through a Commission. As a former Member, it pains me to abdicate responsibility, but history has shown that a statutory Commission, which has teeth and enforcing mechanisms, is the most realistic way to solve this problem. 

Women’s Bean Project offering 2nd chances by promoting entrepreneurship

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By: AIF Staff

In 2023, the American Idea Foundation provided grants and support to 7 amazing organizations  that are making a difference in their communities through evidence-based programs and strategies aimed at reducing poverty and promoting opportunity. One of those organizations is the Women’s Bean Project, located in Denver, Colorado.

The Women’s Bean Project started with one relentless volunteer, Jossy Eyre, who recognized a need in her community and who possessed an innovative and determined spirit. In 1989, Jossy observed that homeless shelters in Colorado were providing temporary housing for women in-need, but they lacked programs and services to help women turn their lives around. So, Jossy went out and bought $500 worth of beans, gave these women a job of turning beans into soup, and then sold it commercially. With that simple act, the Women’s Bean Project was born.

Because of Jossy’s leadership and determination, the $500 purchase of beans has grown into a nationally-recognized program which has helped over 1,000 women change the trajectory of their lives. In the 35 years since its founding, the Women’s Bean Project never lost sight of Jossy’s founding principle: It is possible to change women’s lives by providing a pathway to self-sufficiency through work.

The approach of the Women’s Bean Project is straightforward: Participants – many of whom are battling substance abuse, chronic employment, or reentering society following interactions with the criminal justice system — complete a 6-9 month vocational and educational program.

This program utilizes a wrap-around care model whereby the women complete 60 hours of classroom work with instruction on topics like financial literacy, computer skills, and dressing for success. The Women’s Bean Project also offers supplemental courses on health and wellness practices, navigating workplaces, and job-coaching to assist those trying to regain a foothold in the workforce. This accounts for 30% of the women’s time and the other 70% is spent working on the production, packaging, shipping, and other processes required to manufacture the food products produced by the Women’s Bean’s project. These women are paid for their time and effort in the program and upon graduation, the women receive a full-time job as a production assistant in the Women’s Bean Project’s food manufacturing business.

From its humble beginnings in 1989, the Women’s Bean Project has grown substantially and it now sells products in 1,000 stores nationwide. Equally impressive, the products made by the Women’s Bean Project generated over $2 million in revenue last year.

The anecdotal stories of success are backed up by the Women’s Bean Project’s internal data: Their historic employment rate is 92% and the average wage for graduates is nearly $15 per hour. Of those who complete the post-program survey, 95% report having remained employed (and not re-incarcerated) a year after the program.

The Women’s Bean Project has found an innovative and sustainable way to help chronically employed women achieve self-respect and long-term success. They are providing a heavy battery of services and combining it with practical work experience, and it’s having a massive impact in people’s lives. As the Women’s Bean Project looks to develop additional evidence in support of their wrap-around service model, the American Idea Foundation is proud to partner with an organization with such a rich history and impressive track-record of success.

Bottom Line: Helping 1st Generation College Students Grow & Thrive

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By: AIF Staff

For two decades in Congress, former Speaker Paul Ryan worked to advance solutions that reduced poverty and expanded economic opportunities for all Americans. All too often though, debates about how the federal government could effectively reduce poverty became partisan food-fights and ended in ideological stalemates.

In Ryan’s mind, one way to mitigate this partisan paralysis when it comes to fighting poverty is to use evidence and data to measure the efficacy of a particular program and solution. If policymakers used objective analyses when determining what strategies were working and what ones were not, the federal government could finally make meaningful progress in the War on Poverty.

This is why Ryan’s American Idea Foundation has provided funding and institutional support to front-line organizations around the country who are developing evidence-based solutions to our major challenges. In 2023, the American Idea Foundation issued grants to 7 groups who are united in their belief that every person deserves the opportunity to achieve their version of the American Dream. These groups are making a tangible difference in people’s lives and, with the Foundation’s help, will develop new and additional evidence evaluating the impact of their programs.

One of the 2023 grant recipients is Bottom Line, which was founded in Boston, Massachusetts. Bottom Line partners with degree-aspiring students of color from under-resourced communities to help them get into and through college and successfully launch a career. They do this by providing hands-on mentors and guides for students throughout their journey in higher education.

Since 1997, Bottom Line has helped thousands of degree-aspiring students access the expert advice and relationship-based support they deserve to select an affordable college, complete their degrees, and enter the workforce with minimal debt.

Most of those served by Bottom Line are first-generation college students from low-income backgrounds. The organization’s mentors shepherd students through the college application process, stick with them throughout college, and offer one-on-one support through graduation. Bottom Line starts supporting students in their senior year of high school, continues from the application process to graduation, and includes a student’s entry into the workforce.

Bottom Line’s goal is to create a far-reaching ripple effect by helping first-generation college students use the transformative power of a college degree to mobilize a career that ultimately lifts up individuals, families, and communities. Bottom Line expects their students to earn a bachelor’s degree, accumulate no more than $31,000 in debt, and be employed or continuing their education following their graduation.

The early evidence in support of Bottom Line’s approach is promising. In 2021, the organization participated in an extensive randomized controlled trial to demonstrate the program’s impact on attaining a college degree. Among the trial’s key findings were:

–          Students enrolled in Bottom Line programming were 7.6% more likely to earn a bachelor’s degree within 5-6 years of high school.

–          Students enrolled in Bottom Line programs were 9.1% percentage points more likely to attend four-year institutions.The 2021 trial results show that Bottom Line’s hands-on, time-intensive mentorship model can and does help students from under-served communities get into college and succeed. With the American Idea Foundation’s assistance, Bottom Line will continue rigorously evaluating the effects of its program and, if the evidence merits, expand their strategy to other communities around the country to serve more students from under-served communities.