Last Notes on Brookings/AEI Poverty Consensus

A couple of weeks ago, Brookings and AEI released a report purporting to establish a bipartisan consensus on how to reduce poverty. It was terrible. I produced the following substantive responses:

In addition to these substantive responses, I have a few less substantive notes that I think are worth discussing.

1. Rehash of Isabell Sawhill and Ron Haskins' Book

As much as Brookings tried to sell this report as some bold new right-left consensus, one can't help but notice how much it parallels a 2009 book authored by Brookings' Isabell Sawhill and Ron Haskins.

The 2009 book was titled "Creating an Opportunity Society." Relying upon the bogus "Success Sequence" as a framing device, this book promoted marriage, work, and education as the way to reduce poverty and create an opportunity society.

The 2015 paper was titled "Opportunity, Responsibility, and Security: A Consensus Plan for Reducing Poverty and Restoring the American Dream." The text of the paper  omits any reference to the Success Sequence, yet it too offers marriage, work, and education as the way to reduce poverty and create an opportunity society.

Both products also begin by insisting that they will only provide solutions within the bounds of certain "American" values. Although they don't say so explicitly, I believe they do this to freeze out welfarist approaches to poverty reduction. Welfarist approaches have been so successful in the US and abroad that you need this sort of values argument in order to avoid endorsing them.

2. Brookings Is Not Progressive on Poverty

Brookings is not at all a liberal think tank when it comes to poverty. Center on Budget and Policy Priorities is a liberal poverty think tank. So is Center for American Progress. Brookings is not.

I won't spend too much time on this point, but consider Brookings' Ron Haskins for an example. Haskins biggest policy idea in his career was to fight poverty by dramatically cutting cash assistance to the poorest families with children. He got this idea implemented via Welfare Reform, and extreme $2-a-day poverty has jumped 150% since that time.

In his 2006 book about the inside story of welfare reform, Haskins effusively recounts the "glorious morning" after the 1994 Republican landslide election when he came to realize that Welfare Reform was coming. Finally, he reflected, the "beauties of block grants" were going to be unleashed onto this country by Speaker Gingrich, whose election Haskins had to restrain himself from "gloating" too much about.

Haskins was one of the Brookings' authors on the Brookings/AEI report and even presented the report at the public event promoting it. At the event, he was reportedly asked about the jump in extreme poverty resulting from the Welfare Reform, and his response was "I'm aware of the problem, I just don't know how to solve it."

3. A Bad Process Produced Bad Results

The Brookings/AEI report was a roundly conservative document. In fact, it was so uniformly conservative and indistinguishable from any normal GOP document on poverty reduction that Jennifer Rubin of the Washington Post read it (reasonably) as a sign that liberals had finally come to realize that conservative poverty ideas are the correct ones.

In Rubin's piece, she is convinced by the fact that the report is a bipartisan consensus of 15 conservative and liberal experts, a fact that is supposed to bolster its credibility. Indeed, when I criticized the report earlier, Brookings' Richard Reeves just listed the liberal names on the report at me to defend it from the obvious criticism that it's an extremely conservative document.

Granted, some of the progressive names on the report are strange, given what I know of their views. That is, there are names on the report that are very much for welfare expansion, yet welfare expansion is completely absent from the report's proposals.

Since the report, I have contacted a number of these people (anonymously) and asked them why their welfare ideas weren't in the report. Was it because they don't prioritize those ideas over marriage, work, and education or was it because the process made it impossible for those ideas to make it to the end product? The answer I got was that the process was the problem. It wasn't that these people didn't propose their welfare ideas. Rather, it was that they could not get the overall group to sign on to them. Thus, the ideas didn't make it to the end product.

The conservative nature of the end report was a predictable consequence of the "bipartisan consensus" process. Conservatives would come to the table with the idea of increasing marriage, work, and education, like always. Since liberals don't oppose those things as bad in themselves, they are fine allowing them in the report. Liberals would come to the table with the idea of increasing welfare benefits through the expansion of Social Security or child benefits. Conservatives would completely veto those things because they are adamantly against more welfare. As a result of this one-sided veto, the only thing that the overall group would come to a consensus on are the conservative things that liberals are OK with (but harbor doubts about how likely they are to succeed and how adequate they will be on their own). And that's exactly the report we got.

4. Lack of Welfare Expansion Is Wrong on Its Face

The last thing I'll note here is that the lack of welfare expansion in the report is wrong on its face. Anytime you see an "evidence-based" poverty report that somehow fails to see how welfare expansion could cut poverty, you can dismiss it outright.

What's especially remarkable about the Brookings/AEI report on this front is that Chapter 2 of the report, titled "The Facts," actually lays out the fact that essentially all poverty reduction in the US in the last five decades has come from changes in taxes and transfers (i.e. through welfare incomes).

Chapter 2 starts with this graph showing the change in the official poverty rate over time of various groups.

From there, it notes that the major success has been the constant and dramatic decline in elderly poverty (the blue line), which fell by more than 70% since 1959 on this measure. The report correctly notes that "[t]his progress can be attributed to government programs because the entire reason for the decline is Social Security." That is, welfare did it.

Chapter 2 then notes that the Official Poverty Measure is actually very misleading for non-elderly populations because it does not count non-cash benefits (such as food stamps, WIC, section 8 housing, etc) into its poverty calculations. In the place of the OPM, it points us to the consumption poverty measure (which does not actually measure income poverty) and the Columbia Measure, which is an income poverty measure that counts non-cash benefits as income.

The report explains:

According to the Columbia measure, the poverty rate has fallen from more than 25 percent in 1967 to about 16 percent in 2012, a 36 percent drop. The Columbia measure also shows that government tax and transfer programs had a major impact on the decline in poverty rates, especially for children, thereby demonstrating the major weakness of the official poverty measure, which ignores most of these benefits.

This bit of text is somewhat misleading. The Columbia Measure doesn't just show that "tax and transfer programs had a significant impact on the decline in poverty rates." Rather, it shows that these programs are solely responsible for the decline in poverty rates. Here is the market poverty rate (left) and disposable income poverty rate (right) in 1967 and 2012 using the Columbia Measure:

Between 1967 and 2012, the Columbia Measure tells us the market poverty rate increased from 27% to 29%. But disposable income poverty (i.e. poverty counting welfare incomes and tax credits) decreased from 26% to 16% (as Brookings reports). Thus, all of the poverty reduction action is taking place on the welfare benefit side of things.

So, The Facts according to Brookings/AEI are that welfare expansion is solely responsible for the collapse of elderly poverty over the last 5 decades. Welfare expansion is also solely responsible fo the fall of overall poverty using the more inclusive Columbia Measure that Brookings/AEI endorses as superior to the Official Poverty Metric. In short, all we know of the facts of poverty reduction is that welfare is the key.

After literally telling us The Facts are that welfare gets the anti-poverty goods, what does Brookings/AEI give to us as the consensus answer on poverty reduction? No welfare expansion, only work, education, and marriage. 

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