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Republican Paul Ryan to renew U.S. poverty debate with grant plan

Rep. Paul Ryan (R-WI) departs after a news conference by U.S. Speaker of the House John Boehner (R-OH) and other Republican House members in
Rep. Paul Ryan (R-WI) departs after a news conference by U.S. Speaker of the House John Boehner (R-OH) and other Republican House members in

By David Lawder

WASHINGTON (Reuters) - Republican Representative Paul Ryan will probably spark a new round of arguments over how to fight poverty in America on Thursday as he introduces a sweeping plan to replace long-standing social safety net programs with new block grants for states and communities.

Ryan, his party's vice presidential candidate in 2012, is best known for his budget blueprints marked by deep domestic spending cuts. This time, the chairman of the House Budget Committee will unveil his plan to keep social safety net funding at the same levels but change the way it is used in a speech on Thursday to the American Enterprise Institute, a conservative think tank in Washington.

Instead of distributing money to the poor via food stamps, welfare checks and housing subsidies, Ryan would leave it up to states and local groups to apply for block grants aimed at encouraging people to take entry-level jobs instead of staying home and receiving welfare benefits.

Bob Woodson, who helped develop the plan as founder of the Center for Neighborhood Enterprise, said Ryan's grant program would be more flexible and better tailored to poor communities' needs. Community and faith-based organizations would apply for funds and have to demonstrate they can produce positive results, he said.

"Everything is intended to reward work," said Woodson, whose tax-exempt nonprofit group supports organizations in troubled neighborhoods. "It has as its goal to produce greater independence and self-sufficiency and not just to continue to tangle people in a safety net web."

Ryan is seen as a possible Republican presidential contender for 2016. Should he seek that nomination, many of the ideas he will present in a speech on Thursday to the American Enterprise Institute are likely to find their way into his campaign platform.

The Republican congressman from Wisconsin said in a report in March that existing federal safety net programs were haphazard and had largely failed to reduce poverty over the past 50 years, despite a cost of $799 billion in fiscal 2012.

Some groups who advocate for the poor are already criticizing Ryan's approach and assumptions. The Center for Budget and Policy Priorities, a liberal think tank in Washington, argued that Columbia University research shows that food stamps and the earned income tax credit have reduced poverty rates significantly since 1967.

Ryan "is entitled to propose whatever he wants," said Robert Greenstein, CBPP's president. "He is not, however, entitled to distort the nation's poverty record to sell his plan - and hopefully he will not do so."

One area of rare agreement between Ryan and Democratic President Barack Obama is the proposed expansion of the earned income tax credit to include single earners. The credit provides a refund check to the working poor to boost income and encourage work.

Ryan's plan will also seek to increase choice in public education and ease regulations associated with licensing for jobs such as taxi drivers, which in some states prohibit those with criminal records, said Stuart Butler of the conservative Heritage Foundation, who has reviewed the plan.

Democrats planned to use Ryan's speech to promote their alternatives, such as Obama's proposal to raise the federal minimum wage to $10.10 an hour from $7.25.

"We will oppose any plan that uses the sunny language of 'reform' as a guise to cut vital safety-net programs," U.S. Representative Barbara Lee, Democrat from California, and U.S. Representative Chris Van Hollen, Democrat from Maryland, wrote in an opinion piece published online on Wednesday by The Huffington Post.

(Reporting by David Lawder; Editing by Doina Chiacu and Jan Paschal)

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