Press Release

Washington, DC – Earlier this spring, American Idea Foundation President Paul Ryan (R-WI) took part in a podcast with former Governor Deval Patrick (D-MA) focused on mobilizing capital to improve the lives of Americans in need.

The “Workforce Realigned” podcast , which was produced by Social Finance and the Federal Reserves of Atlanta, Philadelphia, and San Francisco, is part of a larger initiative promoting outcome-based financing strategies that effectively “Pay for Success” and drawing attention to those initiatives that are demonstrating tangible results for the people they serve.

In connection with the podcast, Social Finance also published a book, available here, containing a series of case studies about how results-based financing can create benefits to the government, employers, service providers, and participants, which ultimately expand economic opportunity.

Speaker Ryan authored a chapter focused specifically on the mixed results of past performance-based programs and on a promising new innovation in this space, Social Impact Bonds. Ryan also touched on a 2018 law, the Social Impact Partnership to Pay for Results Act (SIPPRA), which in his view is an encouraging federal tool to tackle specific challenges like recidivism, homeless, and early childhood development.

Speaker Ryan’s chapter is accessible here: Buying Outcomes: Lessons from the Past and some highlights from the podcast interview with Governor Patrick follow. To listen to the podcast in its entirety, click  here.  

The mixed history of performance-based contracting & reasons for optimism:

“The truth is there’s a pretty long history of performance-based contracting in American civic life and, you know, a lot of it hasn’t really worked all that well. We looked at a few examples over the past 40 years of programs that we were trying to achieve these kinds of goals: linking payments and performance, and frankly, we found that there was a lot of struggle. This is a little harder than it seems it should be.

“There seems to be some repeated issues though, when you dig into this. Many [performance-based contracting programs] don’t do a good job of differentiating between the different risk levels and the people being served so what happens is providers get penalized for serving people with greater needs.

“Program providers basically want to cook the books by picking the best-performing people in their pool so that they can look good and that does not give us the right kind of data that we want to rely on to make sound decisions and create the right kind of goals. Other people were allowed in evaluations that weren’t really trustworthy or they paid for outcomes that didn’t really reflect policy goals. So, I think what we can take away from this and what we’ve learned from this and what the Pay for Success movement has tried to solve is that like very many other tools, you can build performance-based contracts well or you can build them poorly.

“You have to be careful with how you design these things and you’ve got to be mindful of just the typical human errors and the mistakes of the past. If you take that into consideration, then I really believe you can build a really good Pay-for-Performance model and then we can get evidence and we can get outcomes. Then, we can use those to scale and replicate [solutions] and really move the needle on poverty.”

Developing an Evidence-Based Clearinghouse to spread awareness about successful solutions:

“One initiative that I’m really excited about is a project we are launching at the American idea Foundation, which is the non-profit foundation that I started, and that is the Evidence-Based Clearinghouse.

“What you have is all these disparate efforts around the country that are engaged in evidence-based policymaking and are using data and analytics and randomized controlled trials to figure out what works, what doesn’t, and to find evidence on how best to fight poverty. The problem is there is so much evidence and data out there and it’s in all these disparate places. It’s in various universities, in various think tanks, in various non-profit centers.

“And so, what the American Idea foundation is going to do is create a clearinghouse for all of the evidence-based policy on poverty programs so that you have a one-stop shop. So, if you’re sitting in Spokane, Washington, or Houston, Texas, or Janesville, Wisconsin, or Brooklyn, New York, and you want to design a program to solve some problem related to juvenile justice, recidivism, homelessness, addiction, or job training, you go to the American idea Foundation’s Clearinghouse on Evidence Based Policy and you find out what’s been done, what trial and error has already occurred, how you learn from the mistakes that other people made so that you don’t repeat those mistakes, and [how you] can build a successful poverty fighting effort based upon all the latest available data and science that has been conducted in America so that you can move forward with success.

“In our view, this is how you scale solutions: You measure, you replicate, and you move. And that is what the American idea Foundation’s Data Clearinghouse on Evidence-Based Policymaking is going to do. It’s never been done before. It’s one of its kind, and I’m really excited about the impact it’s going to have on fighting poverty.”

SIPPRA can bridge partisan divides and improve outcomes for people in need:

“The federal government has sort of dipped their toe in the water here a little bit. It has sporadically supported Pay for Success projects. I can think of projects at the Department of Labor, Justice, HUD, and I think even USAID. I think they all have dipped their toes in this space in the last five years. But in 2018, we started to try to chart a more unified approach towards strengthening this tool and as part of one of the bills I passed back in that year, Congress passed the Social Impact Partnerships to Pay for Results Act that we call “SIPPRA.”

“It has a $100 million fund, administered by the Treasury Department, to support state and local pay-for-success projects. This was a huge part of a bipartisan bill and it turns out there is a constituency for making government smarter or more effective. Republicans and Democrats agree on this!

“The idea behind SIPPRA is to get more states and counties to experiment with outcome-based funding. If they develop projects with strong, evidence-based interventions that are evaluated properly and evaluated well, then the federal government will do its fair share, paying for part of the social outcomes achieved and for part of the cost of evaluation. I’m really excited and I think we’re turning the corner. We’re getting better at this.”

Removing partisanship from poverty-fighting, focusing on evidence and outcomes:

“I’m hopeful that the Biden Administration will focus on this and get this right….so that we truly are using SIPPRA as a tool to leverage local Pay for Success programs. We’ve learned from trial and error in the past. We’ve got lots of takeaways about how to build these things successfully now. We know how to build pay-for-success models and I really believe that this law will be the seed corn that can grow and germinate into replicating pay-for-success programs across the country, at all levels of government, and in the private sector.

“Frankly, I think we’re on the cusp of something new and big which is to move towards evidence-based, outcome-based policymaking and what we will learn is what needs to be scaled and replicated so we can build it out.

“As a person who fought these [partisan fights in Congress], you end up getting into these ideological, partisan battles over how to get people out of poverty and there’s a status quo that wants to keep things the way there are. There are ideologues that want to make these programs and fights political and ideological.

“What Evidence-Based policymaking and pay-for-success does is it bypasses all of that. It leapfrogs the partisanship, the status quo, the ideological battles, and just goes with what works. Are we getting people out of poverty or not? And by getting to that level of debate, I really believe we’re going to move the needle on poverty.

“We’re more or less on the cusp of a new sense of social science and economics, which is evidence-based policymaking and outcome-based policymaking. We shouldn’t measure success based on effort and input; we should measure success based on outcome and results. This can help reduce partisanship and polarization in America and get people of both sides of the aisle — people of goodwill, focusing on the actual objective, which is getting people out of poverty. I’m excited about this work. I’m excited about the outcomes. I’m excited about this phase of this debate and I really think we’re on the cusp of something big here.”

By: AIF Staff

Washington, DC – Last week, Paul Ryan, the President of the American Idea Foundation and a long-time admirer of British Prime Minister Winston Churchill, delivered remarks as part of the Churchill Centre’s Leadership Series. In a conversation moderated by the Churchill Centre’s Program Director, Justin Reash, Speaker Ryan discussed the leadership, legacy, and lessons of Winston Churchill and how the wisdom of Churchill can help elected officials meet the challenges of our day.

Ryan also detailed how the American Idea Foundation is channeling Churchill to make an impact in communities around the country. He provided an update on the Foundation’s efforts to advance evidence-based public policies and to harness the ingenuity of community leaders, researchers, and legislators towards solutions with a track record of improving outcomes.

Video of the conversation is accessible here and some excerpts, edited slightly for clarity, follow.

Developing an early appreciation for Prime Minister Churchill and his leadership:

“I’m a big, big believer in the meritocracy of Congress and the meritocracy of ideas and policymaking. This means doing your homework, knowing your principles, understanding your philosophy, being able to debate and converse with people and being able to persuade. This is really what I got from Winston Churchill. That is so much more durable. You’re not going to be Icarus. You’re not going to be fleeting. You’re going to have a much more durable, meaningful career and that’s kind of the way I chose to do it….

“Jack Kemp kind of got me into Churchill. He was a huge Churchill fan, so I read and quickly chewed through [William] Manchester’s books when I was 23 or 24.  I just read Andrew Roberts’ book, Walking with Destiny. I re-read that a year ago. My dad had that book. My dad had all the Churchill books on our bookshelf and he had read them. My dad died when I was a kid, but he was a big Churchill fan so there was a reverence for Winston Churchill in my family….

“I read a lot of Churchill when I was a young man and was inspired by my mentor and it just so resonated with me. His wit, his intellect, his courage, his confidence, his ability to lead, and all the skills and the trials and tribulations. He went through his wilderness years and what he had to endure until he was the man for the moment who arguably saved Western civilization, I think it’s a history worth understanding and repeating if one can. And so, I just became consumed with all things Churchill because I thought if you want to aspire to be a leader, this is a great role model to have. I don’t drink like he did, but I just admire the man.”

Learning from mistakes and developing resiliency:

“The best takeaway that I got out of Churchill was to try and have a good, even-handed temperament, a sunny disposition, and look at things optimistically even when it is a tough time or you’ve had a large string of losses. I mean, surely it couldn’t be as bad as Great Britain in World War Two when Winston Churchill summoned his country to respond and to deserve victory. That kind of inspiration in the toughest of times and the most difficult circumstances pales in comparison to the kind of the trials and tribulations we go through these days.

“I’ve just drawn inspiration from that and I just think that this is what leaders should be like. These are the qualities that make a person a good leader when times are good and when times are bad. You know Churchill lost. He lost his election after World War Two. It’s just an amazing thing and then he came back here to Missouri to give us the Iron Curtain speech.

“The only other thing I’d say is try to see around corners. I’m worried, really worried, about our being a reserve currency and I’m concerned about our debt, our deficits, and our monetary policy. What got me into that was not just my love of economics, but my sort-of Churchillian sense of duty to look on the horizon and see those gathering storms. I always recommend to look at the storm clouds and see if you can do everything you can to get your country to improve its trajectory and to prevent horrible things from happening….

“I always sort of trained my mind: Don’t just get sucked in and focused on the here and the now, the politics of the day, or the cultural war of the moment. Look at what are those true, gathering storms on the horizon that are existential to democratic capitalism and to our American experiment and [focus on] what you can do to prepare people and policymakers in the country for these things to avert a crisis and steer around these problems. The lessons of Churchill are what got me focused on those things that I focused on in Congress.”

Providing advice for those looking to become Churchillian-type leaders:

“To a young person, I would say: Read the classics, learn the classics, understand the classics. Understand your philosophical argument, boil it down to an irreducible primary understanding of what you think and understand why you believe what you believe. Understand your opponent’s arguments extremely well so that you can make the case on both sides and so you can win your case. Be extremely resilient when you get knocked down. Fight for your cause and do it articulately. Do it effectively, do it with good cheer and when you get knocked down, get back up.

If you know Churchill, he had just as many losses as wins…. We think only that Winston Churchill won World War Two. We don’t [think of] the string of losses that he had, so the way I look at it is just never get demoralized. I mean look at what Churchill went through. It’s a lesson in adversity and tenacity and resilience and endurance.”

Detailing the genesis of the American Idea Foundation’s mission:

“I very much believe in this country’s founding. I believe in its principles, natural law, and natural rights. The motto of our Foundation is: The condition of your birth doesn’t determine the outcome of your life.

“I’m a big believer in democratic capitalism and natural rights and upper mobility. I worry that we’re going into this era of what I guess you could call “woke capitalism” where you have this new emotional attachment by young people to socialism, to zero-sum thinking, zero-sum economics, and a belief that life is not dynamic. There is such a thing as a win-win situation, positive sum economics, positive sum societies. And so, the American Idea Foundation seeks to explore this and prove it out by fighting poverty with center-right, market-based, poverty solutions and proving that the best way to make the most difference for the poor and the best way to get people out of poverty are center-right, free-market based solutions.

“We have a number of research projects and grassroots projects ongoing to try and reconnect people with the poor and to test ideas and prove that free-market solutions are the best way to get people out of poverty. It really is a poverty foundation for poverty solutions, but it also is a vindication of capitalism. It’s a vindication of free enterprise economics and it’s also a vindication of the political attitude and temperament that is inclusive and aspirational and is the polar opposite of identity politics.”

Focusing on evidence-based solutions, removing partisanship from poverty fighting debates:

“I got into a bunch of political battles in Congress, which ended up becoming ideological, partisan stalemates on poverty solutions. Every now and then when government lined up, we’d win something like a work requirement for welfare reform but more often than not, because we had divided government, we just had these stalemates on poverty policy because it became about ideology.

“So, I stepped back and rationally wrote a law with Patty Murray called the Evidence Act to use data and analytics to get access to all the data and statistics of government poverty programs and to measure the outcome of poverty programs and use scientific data and analytics and randomized control trials to see what works and what doesn’t work. We want to prove what works to get people out of poverty versus what doesn’t work and invariably, you find these principles that we believe in are validated.

“You can win an argument about the best way to get people out of poverty not by making an argument based on political rhetoric or political philosophy or ideology but making a fact-based argument using irrefutable statistics and that leapfrogs this ideological stalemate that we tend to get wrapped around the axle on.

“It gets to: Let’s agree on the front end. Do we want fewer poor people? Do we want the poor to get out of poverty? Yes. Okay, great. Let’s now find out what does that? How does that work? What is proven to work? And that is what we’re advancing through our data projects, so that we can more or less bypass these ideological stalemates and go with what actually works.

“I’m confident our principles of personal responsibility, of upward mobility, of free enterprise, of incentives, those principles work. And so, I think you can you can advance these ideas using data and statistics, instead of ideology and partisanship.”

Real world examples of the Foundation’s efforts to link practitioners, policymakers, and validators:

“We work with frontline fighters in the poverty space. One of them just passed away, a good friend of ours, Omar Jawhar, a black pastor down in North Dallas. He had COVID-19 and just passed away. He and his partner, Antong Lucky, a former gang member, said: “We’re basically going to get kids out of gangs and preventing them from joining gangs. They were doing a great job in the inner city of Dallas and making a big difference, so we brought some rigorous data and evaluation to the program to show how you can measure it, scale it, and replicate it.

“We work with academics. We work with Notre Dame’s Lab for Economic Opportunities (LEO) in their Economics department and we’re running randomized control trials on poverty solutions in Fort Worth, Texas, which is just one town over from Dallas. Catholic Charities has a program there called the Padua Program, which is creating a case-manager navigator to work with the poor, to develop a plan with incentives and disincentives to get people to help get themselves out of poverty. We’re doing rigorous analysis on how and why this works and how it works and what doesn’t work and what does work, so that we can build scale and replicate this across the country.

“We then work on scaling and replicating these programs around the country, getting people to see that if this is what you’re trying to achieve in your community whether the problem is homelessness, addiction, keeping people in technical college, or getting people just literally out of poverty, then here is what works. The Foundation connects grassroots leaders and poverty fighters who are working with the poor with academics, with problem solvers, and with resources and then helps prove a concept and tell the story.”

Future site visits in formation by the American Idea Foundation:

“COVID-19 threw a wrench in our gears. We had a big grassroots outreach plan for 2020. We were going to do Dallas. We were going to do South Carolina. We were going to do Indiana and we had plans with legislators to go into inner-city communities to meet with local leaders and local elected officials. COVID-19 put all that on the back burner, so then we put our research projects up front, like this Evidence-Based Clearinghouse that I’m talking about. We’re also doing a research project on Opportunity Zones, so we’ve been in more of the research mode because we have been in our homes.

“This summer, we’re going to start the grassroots wing of the Foundation back up. We are doing South Carolina with Tim Scott in Columbia and we’re just starting to do that kind of an outreach.”

Advice for those in younger democracies on how to achieve positive policy outcomes:

“To a Ukrainian, I would say that you’ve got to build your institutions because if you have a government based on the power of a personality, it will never work. You have to build up your institutions. I won’t prescribe specifically what kind of government [Ukraine] ought to have or how their democracy should work, but you’ve got to have separation of powers. You have to divide and separate the powers of your government in such a way that they work in healthy tension with one another, so that one cannot usurp the others. Then you have to build up those institutions like an independent judiciary, an independent legislature, an independent executive, and you have to build those institutions. Then you have to have transparency.”

By: AIF Staff

Washington, DC – Earlier this week, former Speaker of the House Paul Ryan delivered the closing address at a virtual conference, hosted by the Brookings Institution and the American Enterprise Institute, on the recent policy developments surrounding the Earned Income Tax Credit.

Ryan, who took questions and was introduced by Brookings’ Isabell Sawhill, shared his view on provisions in the American Rescue Plan Act that expanded younger Americans’ access to EITC, increased the size of the benefit for childless adults, and raised the income cap for those eligible for the credit.

Some notable excerpts of Speaker Ryan’s remarks, edited lightly for clarity, follow.

Long-sought EITC reforms expand economic opportunities, but pay-fors are needed

“If you ask me what is the one thing that the government does that is the most effective at fighting poverty, I would say it is the Earned Income Tax Credit. There are just no two ways about it. If I had to pick one strategy, the EITC is the most effective poverty tool we have. It achieves its intended effect and it does so without reducing labor force participation.”

“All three of those [EITC policy changes] are things that I was pushing for back when I was Budget Chairman in 2014. Sometimes it takes a while for policies to actually occur. This is one of those things that I think has long had bipartisan appeal and I’m glad that this has happened. Having said that, when we proposed these things, we always had pay-fors. We always found ways of creating physical space to pay for it. This is temporary, we’ve done these things via emergency legislation. So, I think we’re going to have a pretty good debate about whether this gets extended.

“I think it’s good policy and therefore I think it should. But I do think we have to be mindful of our fiscal situation. There are less important things that could be cut to pay for this, so I do believe we’re going to have a pretty good conversation about how to pay for the extension of these policies, when we go from emergency relief and we take into account our debt and our deficits, which are coming back with a vengeance.”

Conservative debate on EITC: Healthy, necessary, and conducive to sound policy development

“There’s a bit of debate on our side of the transom on family policy versus labor and I see this is actually a good debate. It’s the hot topic in conservative circles these days and we have a number of competing proposals, some of which make more sense and some of which make less sense in my own opinion. But at the core of these proposals, there’s a perceived conflict. There’s this belief that support for families and family formation comes at odds with policies that promote labor force participation.

“The EITC is a labor force-promoting idea that came from our side of the aisle. It came from Uncle Milty, Milton Friedman, who proposed the negative income tax. So, there’s a long history on our side of promoting labor force participation and tools like the EITC, but we’ve got some new proposals and they want to focus on family formation, like Senator Romney, who is a very close personal friend of mine, has a child allowance.

“There are a number of people who are pushing these ideas that would help support families with kids and on the positive side, they would reduce poverty by a lot. But it’s also possible that they could have negative effects on labor force participation. My one concern is that we’re being forced into this debate of choosing.

“If we look at child allowances, my concern is, if we do this, it’s a pretty new program and we’re not sure of all the effects of this. I would much rather see a state take the lead and play with a child allowance and beta test it. They would see what the drawbacks are and what are the unintended consequences. Does it actually reduce labor force participation? Because I think this is something that you just wouldn’t want to put nationwide right way and frankly, I think there are some other tools that are already in place to kind of give us what we need.

“But I think we’re better off in this battle of ideas and it’s a good thing when we know what works and then figuring out ways of finding the fiscal space to pay for those things… We also have had large expansions to the CTC and the EITC. These are preferable in the sense that we have a good understanding of their effects. I think if we are going to spend money in this area, this is where we should be looking first.

“I don’t think the overall goal between family stability and labor force participation need to be in tension. I think one of the things that we can look at is reducing marriage penalties with the EITC. A lot of people on our side of the aisle are looking at just doing that, building on the current program because we generally know the effects of it….”

Good policy discussions lead to better outcomes for American people:

“I will say, I’m excited to see the energy in this space, especially on the conservative side. When we get folks like Senator Romney or Rubio or whomever on the conservative side putting out interesting, innovative proposals to reduce poverty, we end up in a much better place for policymaking. And policymakers trend towards where the action is, so if we are spending a lot of intellectual capital here, the political capital will follow.”