American Idea Foundation

Measuring Results, Expanding Opportunity, Improving Lives.

In The News

Ways & Means Committee advances MIECHV reauthorization, honoring Rep. Walorski & promoting evidence-based policies

by

By: AIF Staff

Earlier this week, the House Committee on Ways and Means advanced legislation to reauthorize the Maternal, Infant, and Early Childhood Home Visitation (MIECHV) program   which supports expectant mothers and parents improve their lives and the lives of their young children through one-on-one home visits and intensive support.

The Committee honored the late Rep. Jackie Walorski, a long-time champion of the program, naming the legislation in her honor. As ranking Republican Rep. Kevin Brady of Texas noted during the Committee’s consideration of the bill:

“MIECHV is a critical program that supports vulnerable families and aims to improve the health of mothers and babies through pregnancy into the early years of a child’s life. It is a bipartisan bill and it reflects many of our Republican priorities, including increasing transparency about outcomes for families and targeting dollars to the neediest communities.

This bill would gradually increase funding from $400 million a year to $800 million a year over a five-year period, and introduce a state match as a way to expand overall service capacity across the country. The principle is simple: The federal government will invest where the states see value in investing.

It also ensures that new matching funds are allocated to states based on the number of children under five living below poverty – so funding goes where the greatest need exists.

The bill increases transparency by creating a state-by-state outcomes dashboard so we can see how interventions are impacting families, and maintains the current focus on high evidence standards.

Unlike many of our government programs, MIECHV is evidence-based – so we know the real impact on families and children and are able to direct funding toward what works.

The program has demonstrated success in supporting expecting families to increase healthy behaviors by coaching parents on child nutrition and development and mitigating risk factors to prevent child abuse and neglect.”

American Idea Foundation President Paul Ryan has long been an ardent supporter of the MIECHV program, which has been re-authorized under both Republican and Democratic Administrations.

The Ways and Means-passed legislation would build on the program’s strong base of evidence by increasing funding by $100 million and increasing the allocations for each state and territory. Given MIECHV has historically been funded by both federal and state governments, this reauthorization would increase the matching formula so for every $1 in state investments, the federal government would contribute $3.

It also would expand the transparency of data and evidence collected from the MIECHV program by adding additional reporting requirements and outcomes-based dashboards, which will help Congress track the impact of interventions over time. Even in a post COVID-19 environment, the legislation ensures that in-person, home visitations are required as part of the program which adds an important layer of accountability.

As Speaker Ryan stated during a visit to a Nurse-Family Partnership in South Carolina in 2021, MIECHV is changing lives and helping mothers, children, and communities across the country. It is an evidence-based success story  and the Ways and Means Committee should be commended for advancing this reauthorization which will help expand opportunities and fight poverty in a data-driven way.

Ryan leads conversation on how financial innovation can support workers amid inflationary periods

by

By: AIF Staff

Washington, DC – This week at the American Enterprise Institute, former Speaker of the House Paul Ryan led a panel discussion with entrepreneurs and policy experts focused on how innovations in the financial services industry can expand economic opportunities for more Americans. With inflation at its highest rate in decades, low-income families and households desperately need tools that provide them greater financial flexibility making it a timely discussion.

Conversing with the Brookings Institution’s Aaron Klein, CEO and Founder of Earnin Ram Palaniappan, and Ida Rademacher of the Aspen Institute, Ryan solicited ideas on how the American banking system could be modernized using 21st century technology to improve the economic well-being of low-income families. The panel detailed how government and the private sector can work in tandem to develop products and policies that provide Americans with more financial security as they grapple with rising costs.

Video of the panel discussion is accessible here and some notable excerpts follow.

Paul Ryan on how innovation can help during inflationary periods:

“Working Americans are facing a time of sustained and rising inflation. Energy costs, food costs, and just everyday life has gotten more expensive. While workers are all-to-often seeing their paychecks lag behind, businesses are also facing a difficult time hiring.

“As we enter into this time of economic hardship, we know that households will face financial hardship. And we also know that reducing that hardship will require policymakers, for-profit organizations, and non-profits to explore new and innovative ways to improve access to financial institutions….

“Too often, when individuals run short of money, they either have nowhere to turn, or the places they do turn end up costing them more than they can afford. As policymakers look towards reducing costs for Americans looking to access financial services, we know that new financial technologies can be helpful in this goal.”

Aaron Klein on how the financial system holds low-income earners back:

“40% to 50% of Americans are living paycheck to paycheck at some level. We’ve designed a [banking] system that assumes you always have money and you don’t care when the money comes in. And that assumption works great for the half of Americans who always have $1,000 in their accounts, who get free checking, and who have all these other benefits. Who is paying for that system are the people living paycheck to paycheck, who are paying overdrafts.

“One out of every 11 Americans has used a pay-day lender or paid overdraft fees. They’re the ones subsidizing free checking accounts… By my calculations over $100 billion of wealth has been transferred from people living paycheck to paycheck who use payday lenders and check-cashing operations….

“The private sector has developed some alternatives for wage access, real-time payment networks and other things, but we made a critical mistake when we put the Federal Reserve in charge of regulating the nation’s payment system [and determining] how fast that check clears when that money comes into your account. They’re also in charge of operating their own system called the automatic clearing house (ACH) system. So, they’re the operator and regulator.

“You wouldn’t put Blockbuster in charge of developing streaming. We have Netflix. That’s the mistake we’ve made [with the Federal Reserve’s role in our banking system] and the people that have suffered have been the people living paycheck to paycheck and the people that have prospered have been the banks regulated by the Federal Reserve, those who charge overdraft fees, check cashers, and payday lenders.

***

“Ultimately, I don’t think we’re going to get to a workable solution without a regulatory regime that puts people first and that is reordered. We have a financial system where the less money you have, the more money it costs you to access your own money.”

Ram Palaniappan on how Earnin is increasing financial well-being through innovation:

“The way Earnin started was quite by chance. I was running another company and I found out that some of my employees were getting overdraft fees and payday loans and it didn’t make any sense to me because I thought I was paying them well.

I spoke with one of them and the problem she had was she needed money the next day. She couldn’t wait until the following Friday. It was Wednesday, so I said I will pay you for the days you’ve already worked. I tried to get our payroll system to do that and the payroll system couldn’t do it.

So, out of frustration, I said I’ll give you the money for the days you’ve already worked and when the payroll system finally does its thing, then you can pay me back. And it started out with me doing that for a handful of my employees and it was always in person when they would see me in the office and then this would happen.

Then, I moved to Cincinnati and they wanted to know if I would continue doing this for them and I didn’t mind doing it because I knew how these systems worked and I could tell if they were working or not. So, I continued to do it for them and initially it was done over Messenger and that’s not the most convenient way because I’d be with someone and keep getting messages, so I built a really crude web function that said if you need money, you can fill out this form.

When I had this webpage up, people really started to use it and what I realized is that if you give somebody access to their money when they need it, their life is so much simpler. They’re paying their bills on time. No more late fees on bills. No more overdraft fees. No more payday loans. This is when I realized that if I didn’t try to scale this product to help more people, I’d always feel bad about myself.”

Ida Rademacher on the need for a Commission on Financial Inclusion:

“There are lots of people getting at understanding what it really takes to deliver well-being for households [and what it takes] to give them dignity and agency and choice but there’s still not a bird’s eye view of how all the different pieces connect because people’s financial lives aren’t siloed in payment pieces and savings pieces and what’s going on day-to-day and week-to-week is still not connected. So, we ended up supporting a call to action with what I like to call a National Financial Inclusion Commission and we wanted to see how much support was out there for what really is this idea of a north star for financial well-being for all households and what is the financial infrastructure that can deliver on that.

It certainly felt like this was needed during COVID when all of the payments to households and businesses encountering some of these “last mile” problems, and to our delight, over 110 companies and civil rights organizations from every industry, association, and finance sector signed on in support of the idea of a comprehensive, coordinated, government-quarterbacked Commission to help think about financial inclusion as a foundational piece of inclusive growth in this country. We think it’s the right time. There certainly seems to be public and private sector will to do this.”

***

“The whole vision for a Commission is that there is an ongoing, measured, structured place to have this conversation with rigor, and informing that conversation with data to come out with the answers to your question. We can’t fix financial inclusion, meaning helping with outcomes, unless we actually know what is the finance system is going to look like 10 years from now. Where does this disruption come from? What is going to mean for households, and let’s do that evaluation rigorously. I certainly don’t mean to imply that, you know, managing systemic risk is not a core piece of it but increasingly, if that is at odds with how the finance system facilitates people’s financial lives, we are not doing our jobs.” 

Ryan commends Notre Dame’s Lab for Economic Opportunities on 10 years of advancing the common good

by

By: AIF Staff

Janesville, WI – Upon leaving Congress in early 2019, American Idea Foundation President and former House Speaker Paul Ryan was named a Professor of the Practice at the University of Notre Dame. He also joined the board of Notre Dame’s Lab for Economic Opportunities (LEO) which shares a similar focus to the American Idea Foundation.

As the Lab for Economic Opportunities celebrates its 10th anniversary of helping address our nation’s most pressing challenges through academic research, evidence, and data, Ryan shared his thoughts on the impact that the Lab has had….  

A core part of Notre Dame’s mission is to “create a sense of human solidarity and a concern for the common good,” and there is no better embodiment of this principle than the Wilson Sheehan Lab for Economic Opportunities (LEO). Notre Dame’s mission further states that the University has a “responsibility to advance knowledge in a search for truth” and over the past decade, LEO has capably shouldered this heavy responsibility by advancing poverty-fighting strategies rooted in evidence and designed to actually help people who are in-need.

In today’s polarized age, LEO’s use of data and research to combat poverty has become more important than ever. And as the laboratory celebrates 10 years of advancing policies and solutions that help people realize their version of the American Dream, it’s important to take stock of their approach and why it matters.  

As a legislator in Congress, I was appalled and frankly surprised at the dearth of non-partisan research and the lack of basic evidence when it came to measuring the federal government’s poverty-fighting efforts. Despite a more than 50-year “War on Poverty,” the federal government myopically focused on dollars spent rather than outcomes achieved.

Because Congress lacked real-world evidence and data about how programs and strategies were actually impacting those they served, legislators were often flying blind when it came to allocating federal funds. Far too frequently, well-meaning debates about expanding upward mobility devolved into ideological fights. The end result of these partisan battles was sadly predictable: Real progress on fighting poverty remained elusive, solutions delivering real results were not prioritized, and Americans continued to struggle.

It was clear Congress had to act if we were ever going to make progress and one day break the endless cycles of poverty in our communities.

That is why, working with Democratic Senator Patty Murray of Washington and the Sheehan Lab for Economic Opportunities, we developed the Evidence-Based Policymaking Commission Act of 2016, which brought a bipartisan group of experts together to address the federal government’s data and evidence gap in the poverty-fighting space. This bipartisan Commission offered recommendations that were worked into legislation called the Foundations for Evidence-Based Policymaking Act of 2018.

This law, signed right after my time as Speaker of the House concluded, modernized the government’s data collection, sharing, protection, and dissemination practices. And over the long-term, it will help the federal government share data more robustly and more regularly with practitioners, legislators, and academics around the country.

The underlying theory of the law was simple: If well-intentioned policymakers and researchers are able to access more data and better understand what strategies are working, the federal government could allocate funds and develop interventions based on evidence and outcomes. We could avoid those ideological cul-de-sacs when it came to fighting poverty and simply follow the data to determine what works.

In many ways, this approach is one that LEO has adopted and mastered over the last decade. Working on the front-lines of communities around the country, LEO has actively buttressed programs and promoted strategies making tangible differences in people’s lives. They are backing this tactical support up with randomized controlled trials, pilot programs, and qualitative and quantitative studies. This hands-on, data-driven approach should, in my view, take a lot of the partisanship out of fighting poverty.

Poverty is persistent. It won’t be solved overnight, but we need organizations like LEO to shine a spotlight on the transformative efforts underway in our country. We need to consistently collect evidence and data to objectively determine how we can best help more Americans who are struggling. We need to encourage everyone – from policymakers in Congress, to leaders in our communities, and to researchers at universities like Notre Dame – to move off partisan talking points and onto unassailable evidence and objective data. This is how we can actually win the “War on Poverty.”

I have every confidence that LEO will remain at the foreground of this battle. They have amassed a 10-year track record of showing how we can successfully fight poverty and change lives for the better. LEO has created a model that not only works in our polarized environment but also makes a tangible, real-world impact. Their efforts are simply amazing and I cannot wait to see what LEO will accomplish in its next decade.

To learn more about Notre Dame’s Lab for Economic Opportunities, please visit: https://leo.nd.edu/mission/.