LePage's Welfare Reform: Good for Maine, a Model for the Nation

After six years of tackling tough welfare problems, Maine's governor, Paul LePage, recently introduced a bill to further overhaul taxpayer-funded benefits programs. The Welfare Reform for Increased Security and Employment (RISE) Act would reinvent Maine's welfare system to put work first, protect benefits for the truly needy, and make welfare a temporary hand up, not a lifetime handout.

LePage is no stranger to poverty himself. One of 18 children, LePage fled home at eleven to escape an abusive father. He spent time living on the streets and in cars, working odd jobs, and learning English as a second language. LePage's rise from the streets to the Blaine House taught him broad lessons that he has applied to Maine's welfare programs.

Governor LePage learned firsthand that the way out of poverty is not government welfare but personal responsibility, employment, and community support.

Applying these lessons learned, LePage has transformed Maine into a national leader tackling the welfare-dependency crisis. In 2011, one out of three Mainers was on welfare, and Maine was leading the way in many measures of dependency; it ranked in the top six for percentage of the population on food stamps, cash welfare, and Medicaid enrollment.

Governor LePage and his health and human services commissioner, Mary Mayhew, implemented time limits, work requirements, and anti-fraud programs that have already moved tens of thousands of Mainers from welfare back into the work force, helping businesses grow.

Nearly 250,000 Mainers (out of a total population of about 1.3 million) were dependent on food stamps when LePage assumed office in 2011. By 2016, that number had dropped to 180,000. While other states are crashing headlong into budget crises caused by Medicaid expansion, Maine has transitioned more than 80,000 people out of Medicaid, refocusing the program on the truly needy - all while the uninsured rate has declined. Maine now has $1 billion in the bank and a 40-year low in unemployment.

Now LePage wants to make sure that this trend continues for generations to come. The RISE Act focuses on work and individual responsibility - the key to moving people out of poverty and onto a more secure path. When LePage required able-bodied adults on food stamps to work, train, or volunteer, their average income more than doubled in just one year. That higher income more than offset the food stamps they lost, leaving them better off. Employment increased, incomes rose, and poverty declined. The research is clear: Jobs do a much better job of putting food on the table than an EBT card does. The RISE Act, if passed, will make sure that this work requirement continues in Maine.

The bill would also ensure that needy children receive financial support from their parents. Under the plan, parents with child-support obligations will be required to meet those obligations before they are eligible to receive welfare. This is based on the sound principle that you should fulfill your obligation to your children before asking the taxpayers to step in and help you. Parents who refused to cooperate with child-support services would be banned or suspended from food-assistance programs.

The RISE Act also aims to ensure - for instance, by accurately counting the incomes and resources of those applying for welfare - that benefits go to those who are truly in need. This way, residents with significant financial assets - including lottery winnings - won't be allowed to drain resources from the most vulnerable.

For cash welfare, the RISE Act shortens the lifetime limit from 60 months to 36 months, joining 17 other states with time limits between 12 and 36 months. This will restore the temporary program's fundamental purpose: to help vault a person into employment as soon as possible, not give cash with no deadlines or time limits.

Other major reforms in the RISE Act include increasing welfare-spending transparency, requiring that welfare funds for college tuition go toward useful degree programs with high job outlooks, closing a loophole that provides more generous welfare benefits to noncitizens than to citizens, and immediately disqualifying people who steal welfare funds.

The RISE Act continues LePage's successful efforts to reduce dependency in Maine. Let's hope the nation takes notice and follows his lead.

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A Lesson from China on Poverty Reduction and Inequality

I've written (many, many times) about how the best way to help the poor is to focus on economic growth rather than inequality.

After all, in a genuine market economy (as opposed to socialism, cronyism, or some other form of statism), the poor aren't poor because some people are rich.

Today, let's look at a real-world example of why it is a mistake to focus on inequality.

A study by five Chinese scholars looked at income inequality over time in their country. Their research, published in 2010, focused mostly on the methodological challenges of obtaining good long-run data and understanding the impact of urban and rural populations. But one clear conclusion is that inequality has increased in China.

    This paper investigates the influences of the income overlap part on the nationwide Gini coefficient. Then we present a new approach to estimating the Chinese Gini ratio from 1978 to 2006, which avoids the shortcomings of current data sources. In line with the results, the authors further probe the trend of Chinese income disparity. .income inequality has been rising in China. .the national Gini ratio of 2006 is 1.52 times more than that of 1978.

Here's a chart based on their data (combined with post-2006 data from Statista). It looks at historical trends for the Gini coefficient (a value of "1" is absolute inequality, with one person accumulating all the income in a society, whereas a value of "0" is absolute equality, with everyone having the same level of income.

As you can see, there's been a significant increase in inequality.

My leftist friends are conditioned to think this is a terrible outcome, in large part because they incorrectly think the economy is a fixed pie.

And when you have that distorted view, higher absolute incomes for the rich necessarily imply lower absolute incomes for the poor.

My response (beyond pointing out that the economy is not a fixed pie), is to argue that the goal should be economic growth and poverty reduction. I don't care if Bill Gates is getting richer at a faster rate than a poor person. I just want a society where everyone has the chance to climb the economic ladder.

And I also point out that it's hard to design pro-growth policies that won't produce more income for rich people. Yes, there are some reforms (licensing liberalization, cutting agriculture subsidies, reducing protectionism, shutting the Ex-Im Bank, reforming Social Security, ending bailouts) that will probably be disproportionately beneficial for those with low incomes, but those policies also will produce growth that will help upper-income people.*

But I'm digressing. The main goal of today's column is to look at the inequality data from above and then add the following data on poverty reduction.

Here's a chart I shared back in March. As you can see, there's been a very impressive reduction in the number of people suffering severe deprivation in rural China (where incomes historically have been lowest).

Consider, now, both charts together.

The bottom line is that economic liberalization resulted in much faster growth. And because some people got richer at a faster rate than others got richer, that led to both an increase in inequality and a dramatic reduction in poverty.

Therefore, what happened in China creates a type of Rorschach test for folks on the left.

    A well-meaning leftist will look at all this data and say, "I wish somehow everyone got richer at the same rate, but market-based reforms in China are wonderful because so many people escaped poverty."

    A spiteful leftist will look at all this data and say, "Because upper-income people benefited even more than low-income people, market-based reforms in China were a failure and should be reversed."

Needless to say, the spiteful leftists are the ones who hate the rich more than they love the poor (here are some wise words from Margaret Thatcher on such people).

*To the extent that some upper-income taxpayers obtain unearned income via government intervention, then they may lose out from economic liberalization. Ethical rich people, however, will earn more income if there are pro-growth reforms.

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Mark Steyn: `The Left Wants To Denormalize And Dehumanize Its Political Opposition'

Conservative author Mark Steyn tied Wednesday's attempted assassinations of Republican congressmen to the preference of many on the left to "dehumanize" their political opponents, instead of engaging in honest debate with them.

"The left wants to denormalize and dehumanize, to use your words, its political opposition," Steyn told Daily Caller co-founder Tucker Carlson on Fox News Wednesday night. "They do that in a variety of ways. For example, when Charles Murray wants to give a speech at Middlebury College, they have to have a riot. They don't have a debate in which they demolish his arguments. They don't want to win the debate. They want to prevent the debate from taking place."

"They want to label somebody a hater. If you happen to think that Obamacare is not the best public policy, it is because you want grannies and urchins to die. Once you do that, you're basically saying, there is no form of civilized political discourse possible with your opponent and the logic of that is that instead to you riot and you beat them up, as they do at Middlebury. You poison them, as happened to Robert Spencer, who is well-known to this network, when he gave a speech in Iceland recently, or you open fire on them. You make politics impossible if you do that," Steyn said.

"There's a religious quality to the way they approach politics," Carlson agreed. "Do you notice that?"

"Yes, I think so," said Steyn. "If you have people like the Southern Poverty Law [Center], which has become fabulously wealthy by labeling everyone they disagree with as a hate group, if you keep calling everybody a hater, and in fact, if your organization calls people haters, you are the hater. I would like to disagree with the tone of what we have heard today, including in the last hour for Martha MacCallum and Brit Hume, when they were talking about unity and will this unity last?"

"Obviously, the unity won't last because ultimately, Rand Paul has very little that unites him with Bernie Sanders. We don't actually need unity. We need robust, civilized disunity - people honestly recognizing that they disagree with each other on health care, on immigration, on Islam, on transgender bathrooms, and a bazillion other things, but that doesn't make the other person a hater. Simply put, the left has to be willing to actually engage in debate with people that disagree with them."

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