Press Release

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.” 

By: AIF Staff

Janesville, WI: Last week, American Idea Foundation President Paul Ryan discussed the future of health care on Health 2049, a podcast hosted by Bisi Williams and Jason Helgerson. The podcast features thought leaders sharing their recommendations, perspectives, and views on what health care might look like in the year 2049.

 In a wide-ranging conversation, Ryan discussed his experiences trying to advance health care reforms during two decades in Congress. He also detailed his preferences for reforming the social safety net and for moving to a more patient-centered health care system that promotes universal access to quality, affordable care and focuses on innovation, competition, and choice.

To listen to Speaker Ryan’s entire interview on Health 2049, click here. Excerpts of Ryan’s responses, edited lightly for clarity, follows.

Breaking the policy gridlock by putting ‘ideological sabers aside’:

“We spend two times what anybody else spends per person on health care in the world, but we don’t have a system twice as good as anybody else. It’s nothing close, so I think we can get to that. I think we spend enough money. I think it’s the way we spend our money that needs to be changed and I think we need to have a system that accommodates and encourages competition and choice.

“This also means we have to put the ideological sabers aside. From my side, let’s accept universality. Let’s accept that the government is going to be involved. On the left, let’s accept the private sector is going to be involved as well. This cannot be a government granted right where the government decides, controls and rationalizes healthcare.

“I think both sides of ideological extremes need to be pushed to the side. And I think there’s a center, I’d like to say center-right, but a center-based system that can be had.”

Developing an initial interest in health care policy:  

“I was primarily a fiscal policy guy concerned about debt, deficits, and the dollar as the world’s reserve currency. When you dig into those issues, it basically takes you to the entitlement programs and when you dig into that, it takes you to health care. So, I walked into the health care issue a little later, about two terms into my tenure in Congress because it became very clear to me that this was the biggest fiscal challenge of our country. And I was representing Southern Wisconsin where this was a big concern, a big issue for my constituents, so it became really clear to me that I needed to learn more about health care.

“I spent a number of years just trying to learn about health care from providers, from consumers, from economists, and then I spent a lot of time with the Committees, with the Joint Committee on Taxation, with the Congressional Budget Office, the think tanks, and in the Budget Committee. I was Chairman of Budget and Chairman of Ways and Means, which are the primary health care committees, so I spent a great deal of my time on this issue….

“I produced a number of different bills: Some passed, many didn’t. I had, with Senator Tom Coburn, the conservative alternative to the Affordable Care Act in 2010 and then I built budgets around health care proposals. I’m currently working on something right now with Jim Capretta at the American Enterprise Institute, to be released later in 2022, so I still spend time on the issue.”

What health care might look like in 2049:

“I hope that we have a fully-funded system that does not have trillions of unfunded liabilities and that is not saddling the next generation with insurmountable debt. I hope this system is characterized as one where everyone has healthcare coverage and you have a system where the health inflation rate is nothing like what it is now and it’s closer to the actual nominal inflation rate, which, frankly, is kind of high right now.

“it’s a system known for and driven by innovation, choice and competition, where markets work. It’s a system where markets are designed in such a way to protect those with pre-existing conditions, and that the preferences and fiscal policy are aimed towards helping the sick and the poor, but that everyone has access to a system where they are guaranteed coverage. It is also a system where those with tough health conditions don’t go bankrupt if they get sick. I believe that this is absolutely achievable.”

Two paths for the future of American health care:  

“I think we currently have a system right now that is a fiscal train wreck and we are piling on top of the system unfunded liabilities, which will make for a very, very difficult moment fiscally, right around 2049 actually.

“I look at 2049 and I see either a fiscal train wreck where we lose the dollar’s status as a reserve currency and we have to do immediate budget surgery to the budget where we have to cut benefits back in real time for real beneficiaries, and people who are dependent on these programs and who organize their lives around these promises that have been made by government.

“Or, and this is the glass half-full side of things, things that I think and hope will happen, which is we have a system that doesn’t have a fiscal train wreck, that doesn’t bankrupt the country or our entitlement programs, that is market-based, and that takes taxpayer dollars and puts them where they ought to be, which is toward the sick and the poor.

“As I mentioned, I hope we have a system where you have legitimate health insurance competition and innovation. A system where the American system of innovation is alive and well and we come up with new drugs and new therapies to make our lives healthier, happier, longer. I believe that that’s eminently achievable.

Advancing Patient-Centered reforms to improve health care:

“I have a few white whales in my career that I wanted to slay, that I could never get, one of which is the tax preference for health insurance. The tax exclusion is upside down. We give the biggest tax benefit to the highest income earner and the lowest tax benefit to the lowest income earner. By excluding health care benefits from your job from taxation, the higher the tax rate you have, the bigger the subsidy you get. That is completely wrong. It is the biggest tax expenditure in the tax code. I tried to cap it when I was Speaker and I couldn’t even get the votes for that among Republicans. And the Democrats tried it with the Cadillac Tax, which is very controversial on their side as well and keeps getting pushed around, but so I think Obama was going at it the wrong way with the right idea with the Cadillac Tax. 

“What I wanted to do is repeal that tax exclusion. I wanted to convert it to a fixed, refundable tax credit so that more of the money goes to low-income individuals and families, less to upper-income individuals. We should throw a deduction on top for those people and allow people to take that refundable tax credit to buy health insurance….

“And when you roll into retirement, I’m a big believer in a premium-support model for Medicare. They should be set on a bid-based pricing system so that market bids are what set the rates. Even the Congressional Budget Office, under Doug Elmendorf, built a model that showed it’s the smartest way to reform Medicare. I think this would put Medicare on a much better footing. It reduces the unfunded liability and if we go to a premium-support model with Medicare — with more for the poor, more for the sick, less for the healthy and the wealthy within the Medicare system, where you have a number of plans to choose from, to a premium support model, much like the federal employee health benefit plan, I think you can mitigate or avoid a debt crisis.

“The fee-for-service system, which is more than half debt-financed, is tumbling toward a debt crisis in about the year 2049 and, frankly, if you would convert our system to a premium support system, with the kind of system for the under 65 population that brings in choice and innovation, it would hopefully have a mitigating effect on inflation. Then, I think you’ll have a system for under 65 and for over 65 that works quite well.”

Preserving the Social Contract in a bipartisan way:

“It’s going to be ugly for a while, politically speaking, but I think the math is going to get us. I think the realization that these programs are running into fiscal reality, which jeopardizes their own viability, will spur action.

“The social contract is an important concept. It’s very important…. I see the social contract as extremely important — a viable safety net for the poor, health and retirement security for those who are in old age, and then all the other things we talked about in between.

“For that to be sustained in this century and on, it will have to change. These were designed in the 20th century with 20th century economics, and 20th century debt demographics, all of that is changing for the reasons we just discussed and I think Congress will get there because they will have no choice but to get there. And the bond markets will make them do it.

“I think the only real viable way in the mid-term, not this year, this session, or even probably the next session of Congress, is a commission. I hate it. Like I said, I was on Bowles-Simpson, I served on some of these commissions, but I’m not a big fan of them because I think it’s Congress ducking its responsibility, but Congress is just too broken to take all of this on on their own.

“My buddy, Senator Mitt Romney has a bill with a commission where I think he has an equal number of Democrats and an equal number of Republicans to take on these entitlements and to have a forced up or down vote, like the base closing commission…. I believe the rightly-formed commission in the right Congress with the right President can put before Congress a solution to this problem that can buy us decades and really chip away at this problem and pass Congress in the medium term. I think that’s probably the best and easiest most viable path forward to solve this problem.”