So it was easy to be cynical about Ryan's new poverty plan. Wouldn't it just be more of the same regressive spending cuts and rhetoric about "bootstraps" and "opportunity"? Well, no. Unlike his budgets, Ryan's new plan wouldn't cut safety net spending at all. It would just take the money we're using to fight poverty, and try to use it better. Now, there's still plenty for liberals to criticize—as my colleague Emily Badger points out—but there's also plenty to like.
Here are the three ideas that Democrats should copy-and-paste from Ryan's poverty plan, and try to pass tomorrow.
1. Expanding the Earned Income Tax Credit (EITC) for childless workers
The EITC is as simple as it is effective. It's a refundable tax credit that subsidizes wages for low-income workers, which means they get the full value of it regardless of how little income tax they owe. Conservatives like it, because it promotes work. (Although some of them don't like how it creates "lucky duckies" who owe no, or even negative, income tax). And liberals like it, because it does work.
The only problem, as CEA Chair Jason Furman points out, is that it isn't available to more workers. As you can see in his chart below, tax policies, like the EITC and Child Tax Credit, have markedly reduced poverty for parents the past few decades, but have actually increased it for non-parents. That's because childless workers aren't eligible for most of these credits, and have been hurt by other tax changes.
Take the EITC. If you don't have a kid, you can't get much from it: just $503 a year. But, building on similar proposals from President Obama and Sen. Marco Rubio (R-Fla.), Ryan wants to make this much more generous. Specifically, he wants to: 1) double the maximum benefit to $1,006, 2) double the phase-in and phase-out rates, so lower and higher-income people can get it, relative to today, 3) decrease the minimum age from 25 to 21, and 4) send the money out each month, instead of as a lump-sum at the end of the year.
You can see exactly what this would mean for childless workers in the chart below.
This is almost identical to Obama's plan—except for how to pay for it. Ryan wants to take money from social programs he doesn't think are working, ag-subsidies, and, maybe, green energy subsidies. Obama wants to get money from closing both the carried interest loophole, which lets hedge funders pay capital gains rates on what should be ordinary income, and the "S-corporation loophole."
A functioning political system would figure out a compromise.
2. Prison sentencing reform
The U.S. imprisons far more people than any other rich country, in part because we imprison so many non-violent people. But it's not just that we're sending people to jail who we probably shouldn't. It's that we're sending them to jail for so long. This leaves them all-but-unemployable when they do get out—which can push them back into crime.
Why are we doing this? Well, part of the problem is that "mandatory minimum" laws dictate harsh sentences for some non-violent offenders. So part of the solution should be relaxing these laws. At least that's what Sens. Mike Lee (R-Utah) and Dick Durbin (D-Ill.), who have sponsored a bill that would give judges more sentencing discretion in non-violent cases, think. Ryan agrees, and Democrats should too.
3. Occupational licensing reform
Nobody ever asked if their hypnotist had a license. Same with their hair-braider. But more and more state governments are making people complete long classes to work in these kind of jobs. This is supposedly about protecting consumers, but it's often about protecting incumbents instead. See, licensing requirements limit competition, which raises wages—one study found as much as 18 percent—at the expense of jobs.
Ryan criticizes these kind of rules, but he doesn't actually propose doing anything about them since they're a state, and not a federal, issue. But as Matt Yglesias points out, the federal government could offer states incentives to streamline these licensing requirements. How big an incentive—and where the money would come from—are tougher questions, but not so tough that Congress shouldn't try.
Liberals will never love Paul Ryan, but, if his poverty plan is any indication, they can work with him. Wouldn't that be something for Washington.