Press Release

By: AIF Staff

Washington, DC – Yesterday, American Idea Foundation President and former Speaker of the House Paul Ryan talked with Fox Business’ Larry Kudlow about how our nation’s growing debt will have real economic consequences for Americans over the short-term and long-term.

On Kudlow, Ryan reflected on the pro-growth economic policies passed during his time as House Speaker and his efforts to promote upward mobility. In discussing the looming insolvency of our entitlement programs and the need to get ahead of it, Ryan foreshadowed a forthcoming project with the American Enterprise Institute focused on modernizing our nation’s social safety net for the 21^st century.

Ryan’s full conversation on ‘Kudlow’ is accessible here and excerpts follow.  

How can we have a pro-growth, balanced budget?

“This is what I’m working on at the American Enterprise Institute, today, putting together a plan to do this.

Everybody forgets – probably not you, Larry – but most people forget about growth. You have to have a growing GDP and you need pro-growth policies: pro-growth regulatory policy, pro-growth tax policies, and sound money policies from the Fed, but that’s another conversation.

But you’ve got to deal with these entitlements and for the big three entitlements, we’re at the beginning of the boomer retirement so we haven’t even seen the big bulge of boomers retiring.  And so, we have to pass entitlement reform once and for all in this country if we’re ever going to get this under control.

You can’t tax your way out of this problem. Frankly, you can’t grow your way out of this problem. Growth helps a lot but you have to reform these entitlement programs.

Right now, they are open-ended defined-benefit programs that grow far faster than our ability to pay for them. Medicare is already more than half bond-financed. The Medicare HI Trust Fund goes bankrupt in 2030, Social Security goes bankrupt in 2035, and across the board benefit cuts kick in right then and there. Not to mention the fact that I think our reserve currency status will be put in great peril and be in jeopardy. Meaning, the sooner we get a handle on this problem, the better off we’re going to be.”

How can leaders alter our debt trajectory & save these critical programs?

“If you think we’re a polarized country today, wait until the day comes where we can’t actually finance our social safety net or can’t fulfill the social contract and we have to cut these programs in real-time for real people who have organized their lives around these benefits.  

I always quote my late mother-in-law: “A stitch in time saves nine.” If you pass the right reforms now that are phased out over time, you can really dodge this debt bullet and get the debt under control.

By the way, in the House, when we had the majority, we passed budgets in the House of Representatives that balanced the budget and paid off the debt. We did it for 8 years.

When I first was a Chairman of the Budget Committee, we passed [balanced budgets] and subsequent to my chairmanship, Tom Price & Diane Black passed budgets that actually laid out how to balance the budget and how to have a pro-growth budget.

Tax reform, entitlement reform, and spending caps can get you to a balanced budget and fulfill the mission of these programs – health and retirement security, upward mobility, a social safety net built toward work. Those things can be done and we can still have these things that we’ve come to a consensus that we want in America in the 21^st century but you have to reform these programs to get there. “

How can we expand upward mobility?

“I really believe that you can rework our safety net to focus on upward mobility, helping people who cannot help themselves and getting people into lives of self-sufficiency by having work requirements.

“It does work. We are proposing a dramatic overhaul of our safety net at AEI that we’re going to release later this Fall to do just this, to show how you can have a very good, vibrant safety net that gets people up and on in life and helps them find work.

“Skills and work – it totally works. We have experimented with these ideas for 30 years. We now know what does and doesn’t work. We have so much data and analysis. There have been hundreds of randomized controlled trials from economists on what works and what doesn’t work in poverty and we do know that work works. Encouraging work is the way to get people out of poverty.” 

*Note: Ryan is a member of the board of Fox Corporation*

By: AIF Staff

Washington, DC – In March at the American Enterprise Institute, former Speaker of the House and American Idea Foundation President Paul Ryan spoke with a dozen high school students from Janesville, Wisconsin as part of the “Discovering Democracy” program.

Every year, AP government students from Ryan’s hometown of Janesville engage in an intensive, academic study of pressing public policy issues. During his time in Congress and after, Ryan has addressed these students and answered questions about their research topics.

In addition to answering questions about fixing our immigration system and reducing student loan debt, Ryan discussed his ongoing work in reforming poverty programs and expanding upward mobility through evidence-based policies and strategies.

Excerpts of Ryan’s conversation with this year’s Discovering Democracy students follow.

On the American Idea Foundation’s Efforts to promote Evidence-Based Solutions:

“My foundation, which is located in downtown Janesville right on Main Street, is focused on “poverty economics” and a big goal of the Foundation is promoting and expanding one of the last laws I wrote, the Foundations for Evidence-Based Policymaking Act.

“When I was head of the House Budget Committee, I had put this giant proposal together that was kind of like one of those comprehensive immigration bills. I put that proposal together to get the conversation going on fighting poverty. I knew I wasn’t going to be able to pass that massive bill so when I was Speaker of the House, we broke that bill up into a dozen pieces. We got Opportunity Zones through the Tax Cuts and Jobs Act. We passed Social Impact Bonds into law.

“And a big piece that we passed was the Evidence Act, which started with the creation of a bipartisan commission and a law that I passed with Patty Murray, a Democratic Senator from Washington State. The goal with the commission was to determine how we could integrate and release data from federal poverty programs in a privacy-compliant way so that government and researchers could get access to this data and determine what works and what doesn’t work.

“In the 50-year War on Poverty, we’ve spent over $15 trillion but we have never really measured whether we were actually really making a difference. We saw that basic, material poverty rates improved because the federal government just gave people money but in terms of upward mobility, in terms of people getting themselves out of poverty, we didn’t do that well.

“What we have learned is that the federal government measures success based on effort, inputs, and dollars spent. It doesn’t measure success based on outcomes and results. We learned that the government never has really had a tool to do this, let alone one to share with the private sector, so we created a Commission to get ideas on how to do precisely that. The Commission came back with their findings and those findings were largely what we put into the Evidence-Based Policymaking Act of 2018 and it was the last thing I passed in the beginning of 2019.

“The result is that the government now has to release all this data on government programs, namely poverty programs, so that researchers in academia, foundations, and within the rest of government can get the data on our poverty-fighting programs to track and measure the evidence of what works and what doesn’t work.

“My Foundation’s primary goal is to make sure this law is well-implemented and executed. It is also focused on advancing those evidence-based strategies that have been demonstrated to show real results. One way we’re doing that is through a user-designed, evidence-based clearinghouse that evaluates the research done on various child welfare strategies around the country. The goal of the clearinghouse is if you want to solve a particular problem, say homelessness, and you’re in Janesville, Wisconsin, you can use this clearinghouse to determine what has been tried in other cities and localities around the country.

“The clearinghouse would have all the evidence, all the literature, and all the program information to show what works and what doesn’t work, so you don’t have to reinvent the wheel. Our goal is to take models that are successful, scalable, and replicable and encourage people to expand them.”

On modernizing the safety net to better assist Americans in-need:

“I’m actually working on a proposal with some scholars here at AEI, which will be released in a book later this year, that is focused on fixing the social safety net so it works better and so it utilizes 21^st century technologies.

“Our goal is to smooth out some of the problems in our existing system. The way Americans get benefits from the government is from a mixture of county government, state government, federal government agencies. None of these agencies can coordinate with one another, all of them have different kinds of benefit requirements and cut-off limits which makes it really hard for a person to navigate.

“What’s worse is that when you have a person who is going through life and they start rising and doing well, making money, and obtaining an education, the government has all these arbitrary benefit cliffs that can end up knocking you back further than you would otherwise be if you continued to receive the existing benefits. This is because these programs are sort of “one-size-fits-all” and they don’t comport with an individual’s situation or circumstances or even their family structure.

“We are saying that this approach isn’t working. There are a lot of good charities and organizations out there that have proven solutions – like using wrap-around benefits and a case-management “navigator” who works with a person for years to help them walk their way out of poverty. This approach utilizes the government and fills in some of the benefit gaps with private, charitable funds. Groups like Catholic Charities, Lutheran Social Services, the Salvation Army are doing amazing work so let’s break up the government being a single-source provider of benefits, which it doesn’t do very well, and let’s let these other groups get more involved and have resources more closely connected to outcomes….

 “What we’re doing here at AEI is we’re designing a concept of digitizing the social safety net so that you can have a personalized benefit structure for people in poverty. You can have a benefit structure, maybe even one with digital money, that is customized so each person has a different set of resources to meet their unique situation, whether it’s a single mom with three kids or a single guy who may have addiction problems, job problems, or transportation problems.

“Because the government treats everybody the same, it’s a cookie-cutter approach that doesn’t work well. If you digitized the social safety net, you could eliminate a whole bunch of bureaucracy and customize benefits based on a person’s issues. You could also algorithmically phase the benefits off as people rise out of poverty so that each step out of poverty makes financial sense for that person. It sounds far-fetched but I really think you can revolutionize the social safety net with digital technology and programmable money.”