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House Budget Committee Chair Releases Proposal to Reform Federal Anti-Poverty Programs

Published on July 29, 2014 by NCSHA Staff
House Budget Committee Chair Releases Proposal to Reform Federal Anti-Poverty Programs

On July 24, House Budget Committee Chairman Paul Ryan (R-WI) released a discussion draft, Expanding Opportunity in America, proposing reforms to federal anti-poverty programs.  One of the proposals is a pilot program called the Opportunity Grant.  The pilot would begin in a limited number of states and would consolidate several federal means-tested programs, including Housing Choice Vouchers (vouchers), Section 8 project-based rental assistance, Pubic Housing, the Community Development Block Grant (CDBG), Section 521 Rural Rental Assistance, the Low Income Home Energy Assistance Program (LIHEAP), and the Weatherization Assistance Program. The Opportunity Grant would also include the Supplemental Nutrition Assistance Program and the Temporary Assistance for Needy Families program.  According to the discussion draft, the proposal is deficit-neutral and would not change the amount of overall assistance flowing to each state through these programs.

According to the discussion draft, each state electing to participate would be required to develop and submit a plan to develop a new aid program.  For the plan to be approved, it would have to meet four conditions:  demonstrate how the funds would be used to move people from poverty to independence, require all able-bodied recipients to work or engage in work-related activities (with an exemption for the elderly and persons with disabilities), use some of the funding to encourage new approaches by innovative groups and non-governmental entities, and set measures of success and evaluation.

The draft states that because federal housing programs may affect the broader housing market, states participating in the pilot would “have greater flexibility to ensure the least disruption in their housing markets.”  It says states could choose to keep the housing programs in their current forms or to consolidate them into the Opportunity Grant program.  If a state chose to consolidate housing programs into the Opportunity Grant program, they would be required to fund existing contracts until they expired.

One goal of the Opportunity Grant is to allow low-income families to work with a single provider to receive assistance.  These providers would work with families to design a “life plan.”  According to the draft, the plans would include a contract with benchmarks for success, a timeline, sanctions for breaking contract terms, incentives for exceeding the terms, and time limits for receiving assistance.

At a minimum, states would have to contract with at least two providers to encourage competition.  If a state felt it could best provide assistance to the families, it would still be able to provide services directly, as long as there was also at least one other provider.

In addition to the Opportunity Grant program, the draft includes a number of other proposals, such as increasing the Earned Income Tax Credit (EITC) for childless workers and reforming the criminal justice system.  It is likely that Ryan will become Chairman of the House Ways and Means Committee, which has jurisdiction over tax policy, including EITC, in the next Congress.

A number of Democrats, including House Budget Committee Ranking Member Chris Van Hollen (D-MD), voiced skepticism about Ryan’s proposal.  They pointed to the funding cuts to safety net programs included in past Republican budgets and said the Opportunity Grant program is just another proposal to block grant federal assistance programs.

When unveiling his proposal, Ryan stated it is meant to start a discussion and invited feedback.  His strategy and possible timing for turning the proposals into legislation is unclear.