There are two problems with Ryan’s approach. First, to build support for his anti-welfare agenda, he exaggerates the failures of America’s fight against poverty. "Americans are no better off today than they were before the War on Poverty began in 1964” is the first line of Ryan’s latest reform plan. This claim is the keystone to his thesis that anti-poverty efforts are actually pro-poverty traps. But Ryan’s statement relies on a nonsense measure of poverty that doesn’t account for tax credits or adjust for the spending habits of a modern family. By more reasonable measures, which account for the growth of tax credits and the falling cost of food, the poverty rate has fallen significantly since the 1960s, particularly among the elderly, thanks to many of the very government programs that Ryan has insisted on reforming, like Social Security, Medicare, and Medicaid.
But there is a second, more consequential downside of Ryan’s approach: It will undermine his larger stated goal to help poor children achieve upward mobility.
Take, for example, his goal to cut Medicaid, which provides insurance to the poor and long-term care for the old and sick. The most recent Republican budget would cut $2.1 trillion from Medicaid in the next ten years, including the repeal of Obamacare's Medicaid expansion. As a result, more than 20 million people would lose health insurance, and in ten years, the Children's Health Insurance Program (CHIP) would be cut by about one-third.
What effect might these cuts have on the upward mobility of poor children? Academic researchers already have an answer. Since Medicaid expansions occur state by state, rather than among all states at once, this provides an ideal dataset for comparing outcomes of similar children with different Medicaid eligibility from several states. Their conclusions suggest that Medicaid cuts could have a devastating cost on the future health, education achievement, and future income of today’s poor children.
In a 2015 paper “The Long-Term Effects of Early Life Medicaid Coverage,” the economists Sarah Miller and Laura R. Wherry found that poor children whose mothers had access to prenatal coverage under Medicaid later had lower obesity rates, higher high-school graduation rates, and higher incomes in adulthood. The authors even found that children of new mothers on Medicaid showed “less reliance on public assistance” as adults. Another 2015 paper by the economists David W. Brown, Amanda E. Kowalski, and Ithai Z. Lurie found that children who benefitted from Medicaid expansions earned higher wages as adults and collected less welfare from the government.
In other words, Medicaid and CHIP don’t seem to trap families in poverty, as conservatives often suggest. To the contrary, they help poor children escape poverty, so that as adults they are less reliant on government support.