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Ryan Opening Statement: How Our Welfare System Can Discourage Work

June 25, 2015

WASHINGTON, DC — Today, House Ways and Means Chairman Paul Ryan (R-WI) delivered the following opening statement during a joint hearing held by the Human Resources Subcommittee and the House Agriculture Nutrition Subcommittee on how certain welfare programs and related benefits can discourage work as a result of the high effective marginal tax rates they impose on certain populations.

“I want to welcome our colleagues from the Agriculture Committee, including Chairman Conaway, Chairwoman Walorski, and Ranking Member McGovern. We’re happy to have you. And we appreciate your hosting the Ways and Means Committee twice earlier this year when this room was being renovated.

“This is a really important hearing. For the past 50 years, we’ve been waging a War on Poverty. And I don’t think you can call it anything but a stalemate. I’m not saying we haven’t made any progress. We have. But the federal government has spent trillions of dollars on dozens of programs. And yet upward mobility is no better than before. Today, if you were raised poor, you’re just as likely to stay poor as you were 50 years ago.

“Here’s the problem. We’ve created over 80 different programs to try to fill over 80 different holes in people’s budgets: health care, child care, energy, education, and more. You qualify based on your income. If you don’t make much, you get a lot of benefits. But as you make more, you start to lose benefits. Because we’ve piled programs right on top of each other, the falloff can be steep. Make a little more, and you’ll lose a ton in benefits.

“Say you’re a single mom with one kid. You’re making the minimum wage. You get food stamps, Medicaid, housing assistance, and the Earned Income Tax Credit. And then you find a job that pays $3 per hour more. When you add up all the money you’ll lose in taxes and benefit cuts, you may keep only 10 cents of every extra dollar you make. Financially, there’s just no reason to take that job.

“So we think we’ve been filling holes. But we’ve actually been building a trap. Right now, we have a safety net that catches people falling into poverty. What we need is a safety net that lifts people out of poverty—so they can support themselves.

“The way I see it, we have three choices.

“First, accept the status quo—and do nothing.

“Second, reinforce the status quo—and do more of the same. That will only make it harder for people to get from welfare to work.

“Or third, reform the status quo—and try something different. Get people in jobs or in training. Customize benefits to fit people’s needs. And make sure it always pays to work. These are the principles we need to put into practice.

“Pope Francis recently said, ‘Where there is no work, there is no dignity.’ That’s the challenge we face—to protect and promote the dignity of work. I look forward to working with our colleagues to do just that.”