Ryan says private sector key to ending high poverty

Republican vice presidential candidate Rep. Paul Ryan (R-WI) speaks during a campaign rally at the Red Rocks Amphitheatre on October 23, 2012 in Morrison, Colo. Ryan said today businesses can grow jobs and private donations can displace the safety net.

Paul Ryan addressed poverty today in a speech at Cleveland State University in the swing state of Ohio. The Republican vice presidential candidate said the key to stopping poverty is a robust private sector that both employs people and serves the poor.

Paul Ryan said low-income Americans need access to good education, a strong safety net, "but above all else is the pressing need for jobs."

"Everyone agrees with that. I don't think that's a controversial statement," says Robert Greenstein, the executive director of the Center on Budget and Policy Priorities. "When in the late 1990s, we had 4 percent unemployment, we had significant reductions in poverty."

The controversy starts when Ryan talks about what he calls the "the real debate:" whether the needs of the poor should be met by private groups or by the government.

Melissa Boteach, a poverty expert at the Center for American Progress, says private charities have always played a role, but "if the Romney/Ryan plan for nutrition assistance were to go into effect, every church in the United States would have to raise $50,000 a year for the next 10 years just to replace the food assistance that would be cut for families struggling to make it in this economy."

Boteach says safety net programs like food stamps are designed to expand during rough economic times, and that's when private sector donations dry up. But Nick Schulz, a fellow at the American Enterprise Institute, says government benefits like food stamps need to be paid for -- and that means taxes.

"That's, then, money that businesses can't use to grow, and to grow the economy, or individuals can't use to give to their churches, to give to charitable organizations," says Schulz.

Paul Ryan, in his speech at Cleveland State University, said finding that balance between the private sector and government will require a bold departure from current policies.

About the author

Shereen Marisol Meraji is a reporter for Marketplace’s Wealth & Poverty Desk.

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