AMERICAN ENTERPRISE INSTITUTE EXPANDING OPPORTUNITY IN AMERICA: A CONVERSATION WITH HOUSE BUDGET COMMITTEE CHAIRMAN PAUL RYAN INTRODUCTION: ARTHUR C. BROOKS, AEI SPEAKER: PAUL RYAN, US HOUSE OF REPRESENTATIVES (R-WI) PANELISTS: STUART BUTLER, HERITAGE FOUNDATION; ROBERT DOAR, AEI; RON HASKINS, BROOKINGS INSTITUTION; PAUL RYAN, US HOUSE OF REPRESENTATIVES (R-WI); BOB WOODSON, CENTER FOR NEIGHBORHOOD ENTERPRISE MODERATOR: ROBERT DOAR, AEI 9:00 AM – 10:00 AM THURSDAY, JULY 24, 2014 TRANSCRIPT PROVIDED BY DC TRANSCRIPTION – WWW.DCTMR.COM ARTHUR BROOKS: Good morning, ladies and gentlemen. I was going to ask you to take your seats, but there’s standing room only. I’m delighted to see that. I’m Arthur Brooks, president of the American Enterprise Institute. I’m honored to welcome you today and to welcome the chairman of the House Budget Committee, Congressman Paul Ryan, here at AEI. Congressman Ryan has spoken here many times. He’s a friend of AEI’s and we’re delighted to see his continuing willingness to tackle important and difficult issues that many others are not willing to confront. Today he’s here to talk about an issue that’s near and dear to my heart and those of my colleagues here at AEI, Expanding Opportunity in America. He’s particularly focused on low income and vulnerable populations in the United States. One of the things that those of you who follow Congressman Ryan’s career and his pronouncements remember and notice consistently is that he knows that great leaders, that patriots, fight for everyone, no matter how they vote. When we forget this, we don’t represent all Americans. When we remember this, we can truly reunite our country. We’re excited about that. We have a moral vision at AEI that Congressman Ryan shares and we’re looking forward to hearing about his new plans today. We’re going to be hearing from a distinguished panel after Congressman Ryan’s remarks. And after that panel in which Congressman Ryan will participate, he will be taking your questions from the audience for the balance of the hour. Please join me in welcoming Congressman Paul Ryan. (Applause.) REPRESENTATIVE PAUL RYAN (R-WI): Morning everybody. How are you? First off, I want to start by thanking Arthur for his hospitality, for all that he’s done, for the patience of his team and for opening up this great facility. I look forward to seeing the new place you’ve got. And I also look forward to hearing from everybody. This is going to be a participatory event today. But let’s start with a principle we can all agree on: Hardworking taxpayers deserve a break in this country. Too many families are working harder and harder, yet they’re falling further and further behind. That’s just what’s happening in America today. The cost of food, housing and energy and gas, they keep going up. But paychecks have not budged. So, whether you are a Republican or a Democrat, let’s all agree that America deserves better. What do we want? We want a healthy economy. And a big part of that is having a safety net that is strong, both for those who cannot help themselves and for those who just need a helping hand to get up and going in life. That’s our goal. The problem is, that’s not what we’re getting, though it’s not been for a lack of trying. We spend $800 billion each year on 92 programs at the federal level just to fight poverty. And yet, we have the highest poverty rate in a generation. Deep poverty is near record highs. When you take a step back and look at all of this you’ve got to think, we can do better than this. Now, I don’t have all the answers, far from it. Nobody does. But the way I see it, we have an obligation to expand opportunity in America, to deliver real change, real solutions, real results. And to do that, we need to stop listening to the loudest voices in the room and start listening to the smartest voices in the room. So I have spent the last year traveling all over this country, learning from people fighting poverty on the front lines. I’ve been to a high school in Milwaukee that has eliminated 14 gangs from its school grounds. I’ve been to a church in Indianapolis that has helped hundreds of men get off drugs. I’ve been to a homeless shelter in Denver, a rehab center in San Antonio. You know what the point is? There is a lot of good that is going on in this country. It’s amazing. And since Washington can’t fight poverty alone, it is time to bring in the reinforcements. So today I would like to start a conversation. I want to talk about how we can repair the safety net and help families get ahead. And the thing I want to talk about, in addition to that, is a few ideas that some of my colleagues in the House and Senate have proposed to help issues like income support, education, criminal justice, and cutting down on red tape. Each idea touches on a very different topic, but they all reinforce the same principle: Give more flexibility in exchange for more accountability. My thinking is: Listen to the boots on the ground. Listen to the local leaders who are actually changing the status quo, and who are actually succeeding. Let them try unique and innovative ideas with a proven track record, and then test the results. That’s my guiding principle. And the first place to apply it is the safety net. Today, federal aid is fragmented and formulaic. Washington looks at each person’s needs in isolation, like food, housing, or energy. It doesn’t see how their needs interact. And what’s worse, Washington looks at each person in isolation. It doesn’t see how people need to interact. The secret to our country’s success is collaboration – people working together, people learning together, people building together of their own free will. What government should do then is encourage collaboration, bring people together, get them into the mix, empower them, don’t oversee them, don’t force them. What we need to do is to coordinate assistance to families in need and get the public and the private sector working together. That’s how we can smooth the transition from assistance to success. The fact is, each person’s needs fit into a coherent whole – a career. And each person fits into a coherent whole – a community. So if the public and the private sector work together, we can offer a more personalized, customized form of aid, one that recognizes both a person’s needs and their strengths, both the problem and the potential. So I would start a pilot program called an Opportunity Grant. It would consolidate up to 11 federal programs into one stream of funding to participating states. The idea would be, let states try different ways of providing aid and then test the results. In short: More flexibility in exchange for more accountability. My thinking basically is, get rid of these bureaucratic formulas and put the emphasis on results. Participation would be voluntary. No state would be forced to join. And we would not expand the program until all the evidence was in. The point is, you don’t just pass a law and hope for the best. If you’ve got an idea, let’s try it. Let’s test it and see what works. Don’t make promise after promise. Let success build on success. Here’s how it would work: Each state that wanted to participate would submit a plan to the federal government. That plan would lay out in detail the state’s proposed alternative. If everything passed muster, the federal government would give the green light. And the state would get more flexibility. It would get to combine into one funding stream up to 11 different programs- things like food stamps, housing assistance, child care, and cash welfare. This new, simplified stream of funding would become the Opportunity Grant. And it would be budget neutral. The state would get the same amount of money as they would under current law, not a penny less. In effect, the state would say, give us some space and we can figure this out. And the federal government would say, go to it, on four conditions: First, you have to spend this money on people in need. You can’t take this money and put it on roads or bridges, no funny business. Second, every person who can work should work. Third, you’ve got to give people basic choices. The state welfare agency can’t be the only game in the town. People must have at least one other option, whether it’s a nonprofit, a for profit, or what have you. Fourth, you’ve got to test the results. The federal government in the state must agree on a neutral third party to keep track of progress. That’s the deal. So if approved, a state could use that money to expand state programs and partner with local service providers. In other words, families in need would have a choice. There wouldn’t just be a federal agency or a state agency. Instead, they could choose from a list of certified providers. We’re talking nonprofits like Catholic charities, for profits like America Works, or even community groups that are unique to your neighborhood.