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Dueling budgets underline views on poverty

Obama
Ryan

– The Obama administration budget to be released today will set the stage for an election-year debate over government’s role in creating economic opportunity, with President Barack Obama calling for more federal spending to help the poor and Republicans charging that such programs waste money and foster dependency.

In his latest request to Congress, Obama plans to seek $56 billion in fresh spending to expand educational offerings for preschoolers and job training for laid-off workers, among other priorities – the very types of programs that Republicans say have been proved ineffective.

Meanwhile, House Budget Committee Chairman Paul Ryan, R-Wis., is at work on a GOP budget plan that aims to overhaul the nation’s welfare system, in part by cutting spending on programs that Ryan argues have locked people into poverty.

The dueling blueprints are unlikely to produce much immediate legislative action, but they provide road maps for Democrats and Republicans heading into this fall’s midterm elections. And while the policy prescriptions are vastly different, both sides seek to tap into powerful anxieties about how hard it is for the average person to get ahead in today’s economy.

“The two sides have converged in terms of the problems they’re diagnosing,” said Alan Viard, a resident scholar at the right-leaning American Enterprise Institute. “But the solutions are very far apart. It’s not clear that either party is going to go too far away from the policies they’ve traditionally emphasized.”

Some agreement

With his budget request, Obama is returning to the populist, bread-and-butter themes that helped him win re-election and have played to Democrats’ advantage for years.

He will propose $28 billion in new spending on education, manufacturing and job training, as well as $28 billion for defense programs. He will endorse the idea of overhauling the corporate tax code to boost U.S. competitiveness and generate additional revenue to rebuild roads and bridges and create jobs.

Ryan, meanwhile, is trying to shift his party away from the relentless focus on spending and deficits that has dominated GOP thinking in recent years. In its place, he is working to identify conservative policies that offer a helping hand to poor and working-class families.

On Monday, he released a blistering 204-page critique of the nation’s vast array of social programs.

The document serves as a precursor to a GOP budget that would fundamentally reweave the social safety net and – if past is prologue – shrink federal spending on it dramatically.

Ryan and Obama are not in complete disagreement. For instance, they both support the earned-income tax credit, a kind of cash bonus for working families that provides support without discouraging employment. Since its introduction during the Ford administration, the EITC has become one of the largest and most important federal poverty-fighting programs.

Another area of agreement: Taxing the accumulated overseas profits of multinational corporations to finance an increase in spending on infrastructure projects.

After 50 years

For the most part, the contrasting visions of Obama and congressional Republicans reflect a profoundly different understanding of how government has performed over the past 50 years.

Ryan, for instance, argues that the war on poverty has failed. He notes that, by official census estimates, the poverty rate has declined from 17.3 percent in 1965 to 15 percent today – meager progress, given the trillions that have been spent to lift people out of poverty.

But White House officials – along with many independent economists and poverty researchers – point out that the official measure of poverty is deeply lacking. For example, it does not take into account food stamps and a wide array of other government benefits.

When the full range of benefits is taken into account – along with the full array of costs faced by poor Americans – the picture is much different, suggesting that poverty has declined significantly. One well-respected study by researchers at Columbia University found that the portion of Americans living in poverty fell from 26 percent in 1967 to 16 percent in 2012.

Ryan is unlikely to be persuaded. The report he released Monday singles out Head Start, the federal program for poor preschoolers, and Medicaid, the federal health insurance program for the poor, as particularly flawed.

In his budget, Obama will call for more money for Head Start, and his Affordable Care Act calls for expanding Medicaid coverage in every state.

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