​Louisiana has one of the highest poverty rates out of all the states, but why? That’s a complicated question for which there are several right answers, some of which are more difficult to solve than others. But one contributing factor isn’t so complicated, and it’s something legislators can and should address soon: safety-net program dependance.

Research reveals that safety-net programs often trap people in poverty rather than lift them out, and a high percentage of Pelican State residents depend on these programs. Therefore, to promote long-lasting self-sufficiency, and thereby a more prosperous economy, Louisiana must reform its safety-net programs.

Louisiana had 17,670 safety-net programs users per 100,000 in 2019, making it the second-most safety-net dependent state in the country behind only New Mexico. Meanwhile, 18% of Louisianans rely on SNAP (food stamps) or approximately 1 in 6 residents compared with 1 in 8 individuals participating in SNAP nationally.

While SNAP helps families in the short-term experiencing hardship, the reality is that many participants show that the program doesn’t help them reach long-term independence, but can in fact keep them from it.

SNAP contains work disincentives, which explains why its participants have low employment rates.

Angela Rachidi, senior fellow and Rowe scholar in poverty studies at American Enterprise Institute, recently reported “that the employment-to-population ratio among work-capable SNAP participants without dependents has hovered between 15 and 30 percent over time. A 2018 report by the Council of Economic Advisors analyzed household survey data and found that a slightly higher share of SNAP participants worked while receiving SNAP, but even their analysis suggested that 50 percent or fewer worked” (see Figure 1).

​Safety-net programs like SNAP are often referred to as “anti-poverty” programs, since that’s the supposed end goal. But when up to a third of work-capable SNAP recipients remain unemployed over time, the path out of poverty for these participants is not readily apparent. Without incentives and supports that encourage employment and self-sufficiency, users are enabled to stay dependent, and therefore, stuck in poverty. This cycle harms the individual, communities, and thereby, Louisiana.

As if the challenges for Louisiana contained within SNAP weren’t bad enough, other safety-net programs compound the problem.

The Temporary Assistance for Needy Families (TANF), which provides grants to states to purportedly help people get out of poverty, lacks efficacy. A performance audit in Louisiana found that the state does “not collect sufficient outcome information to determine the overall effectiveness of TANF-funded programs and initiatives. The current performance measures that DCFS uses to monitor and evaluate TANF programs are mostly output and process measures which are not useful in determining whether programs are effective at meeting TANF goals.”

One of TANF’s official goals is to “end the dependance of needy parents on government benefits through work, job preparation, and marriage.” Considering that Louisianans on TANF have the rate for those participating in the labor force in the nation, at just 3.5% in the fiscal year 2020, it hardly seems that TANF is accomplishing its goal.

Work is integral to human dignity and staying out of poverty; addressing the work participation rate will lead to more productive and happy people and, thereby, a better state economy as residents are equipped and eager to contribute to society. This starts with better-managing safety net programs like SNAP and TANF while connecting participants with work.

Louisiana can draw valuable lessons from Utah’s effective implementation of a “no wrong door” strategy for streamlining government programs. In the 1990s, Utah successfully integrated various safety-net programs, such as employment services, vocational rehabilitation, and TANF, resulting in simplified eligibility requirements, a unified application process, and the assignment of dedicated case managers to guide individuals through the system.
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Utah improved the quality of services and enhanced administrative efficiencies, and achieved cost savings through this approach. These reforms equipped individuals to get their needed help and become self-sufficient.

​Louisiana must strive to empower its work-capable population, enabling them to pursue opportunities for growth and flourishing within the state. With a streamlined and effective system like Utah’s, Louisiana can transition from safety-net programs to employment, reducing poverty and fostering prosperity.

That’s part of the Pelican Institute’s “Comeback Agenda” for Louisiana. The time is now.

Originally published at Pelican Institute. 

​Today, I'm honored to be joined by Leslie Ford, adjunct fellow at the American Enterprise Institute’s Center on Opportunity and Social Mobility and a senior fellow with the Alliance for Opportunity.

We discuss:
1) The history of the war on poverty, how safety net programs have evolved, and where the war on poverty stands today;
2) How safety net programs can discourage upward mobility and keep people trapped in poverty through penalties such as those on marriage; and
3) Data on what requirements help safety net recipients achieve long-lasting self-sufficiency and prosperity, and more.
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You can watch this interview on YouTube or listen to it on Apple Podcast, Spotify, Google Podcast, or Anchor. Please share on social media, subscribe to your favorite platform and my newsletter, like it, and leave a 5-star rating.

​

• Leslie Ford is an adjunct fellow at the American Enterprise Institute’s Center on Opportunity and Social Mobility. She is also president of Ford Policy Solutions and a member of the State Board of Social Services at the Virginia Department of Social Services.
• Ms. Ford previously served in the White House as a domestic policy adviser and special assistant to the president from 2018 to 2020. During that time, she worked on the development of the Trump administration’s welfare and antipoverty strategic agenda and on reforms to US social safety-net programs. Before joining the White House, Ms. Ford was a legislative adviser to Sen. Mike Lee (R-UT). While working on Capitol Hill, she oversaw the development of 22 pieces of legislation and more than 50 amendments on significant bills to advance health and welfare reforms. Ms. Ford started her career at the Heritage Foundation.
• Ms. Ford has been published in the Wall Street Journal and National Review. She holds a BA from the Franciscan University of Steubenville.

Find show notes, thoughtful economic insights, media interviews, speeches, blog posts, research, and more at my website and here in my Substack newsletter. Please subscribe to this newsletter, share it with your friends and family, and leave me a comment.

​Louisiana’s state government is the third most dependent state on federal funding. This is according to a report recently released by WalletHub that shows state rankings, with Alaska and Wyoming coming in at first and second. This follows another report release by the Tax Foundation that also ranks Louisiana as the third most dependent on federal funds, with only Montana and Wyoming ahead.

This trend doesn’t appear to be getting any better. In 2014, federal funding comprised just 36% of the state’s total budget, whereas today, that percentage rises to 44%.

The substantial increase in Louisiana’s use of federal funds from 2016 to 2017 is primarily due to Medicaid expansion. This program expanded the number of individuals eligible to receive Medicaid, and therefore increased the amount of money in the state’s general fund needed to match the additional federal funding. The match rate ranges from 30% to 40% per year based on personal income in the state. Disaster-related recovery has also contributed to the increased use of federal funds. Beginning in 2020 and 2021, Congress sent a large amount of federal funds due mostly to the COVID-19 pandemic response. There were also two major hurricanes, Laura and Ida, and numerous smaller hurricanes that also occurred in those fiscal years, which prompted an additional influx of federal funding from FEMA, HUD, and other agencies.

Every program that is either partially or fully funded by the federal government comes with restrictions on its use – the “strings attached.”

The substantial increase in Louisiana’s use of federal funds from 2016 to 2017 is primarily due to Medicaid expansion. This program expanded the number of individuals eligible to receive Medicaid, and therefore increased the amount of money in the state’s general fund needed to match the additional federal funding. The match rate ranges from 30% to 40% per year based on personal income in the state. Disaster-related recovery has also contributed to the increased use of federal funds. Beginning in 2020 and 2021, Congress sent a large amount of federal funds due mostly to the COVID-19 pandemic response. There were also two major hurricanes, Laura and Ida, and numerous smaller hurricanes that also occurred in those fiscal years, which prompted an additional influx of federal funding from FEMA, HUD, and other agencies
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Every program that is either partially or fully funded by the federal government comes with restrictions on its use – the “strings attached.”

​Most of the federal funding is used for social safety-net programs. Louisiana has the highest poverty rate in the nation, with nearly 20% of the population in poverty and even more on at least one safety-net program. State and local spending on these programs create an annual burden of nearly $3,000 per person.

To reduce the state’s dependence on federal funds for large line-items such as social safety net programs, the state must empower more individuals to realize their own self-sufficiency and ability to flourish. Work must once again become a priority.

WalletHub’s report also compared states using their gross domestic product, or GDP, per capita compared to the amount of federal funds flowing into each state. Louisiana is placed in the “high dependency, low GDP” category, with a GDP ranking of 40th in the nation.

Louisiana’s economy is not growing as fast as the rest of the country. With the highest poverty rate in the country, lawmakers need to pursue reforms that will make the state more economically competitive and increase opportunity for all Louisianans. Research has shown that more responsible state budgeting and spending, tax relief, and removing barriers for employers to start businesses and workers to work help reduce the number of people in poverty and reduce the dependency on the federal government by individuals and the state.

According to WalletHub and the Tax Foundation, Utah is one of the least dependent states on federal funding. This is because the state reformed its social safety-net system decades ago, linking assistance with employment opportunities. This made Utah the state with the fastest economic and job recovery post pandemic.

Louisiana should take a page out of Utah’s playbook and achieve the same. It’s time to reduce the state’s and individuals’ dependence on Congress and the national debt, which exceeds $31 trillion and is shared by all states including our own. And it’s time to get Louisiana off the top of another bad list and into a comeback story that we know is achievable.

Originally published at Pelican Institute.

The push to ditch reliable energy is out of control. Politicians are manipulating the energy market through subsidies, tax breaks, and environmental, social, and corporate governance (ESG) initiatives in regulations and government pensions.  

It’s also concerning that the “big three” investment institutions, which collectively hold over $20 trillion in assets, too often coerce the companies in which they have significant investments to bend the knee to their big-government political ideology, such as complying with the Paris Climate Accord.  

Sadly, the result of this virtue signaling to prop up unreliable wind and solar comes at high costs for little benefits—if any benefits at all. And more than hemorrhaged taxpayer dollars are at stake: this green energy agenda increases poverty. It must stop. 

While the media is constantly ringing alarm bells about the always-changing climate, not enough people are alarmed by the economic trade-offs these unreliable green energy initiatives create. But that requires an honest comparison of the climate change risks versus the economic costs, both of which impact future generations. 

The International Energy Agency (IEA) finds that there were an expected 20 million more people without electricity globally, totaling 775 million people, in 2022. Many of these people are in sub-Saharan Africa, who are facing increasing hardship due to rising costs for food, fuel and other necessities. This situation is made worse by the left’s insistence on unreliable sources of energy that have forced many Europeans to use wood for stoves and heat instead of much cleaner-burning natural gas. 

Forcing some of the population to depend on energy sources that don’t work ultimately pushes them into hardship and poverty when those methods fail.  

Texas experienced this problem in a tragic way two years ago during its historic weather event of freezing temperatures and accumulations of ice and snow that left thousands without power, contributing to an estimated 246 deaths.  

Such a tragedy should never have happened in America’s energy capital, but these are gambles that politicians take when offering subsidies to unreliable variable energy providers that make it difficult for reliable thermal energy to compete, even though thermal energy is the most stable and reliable form.  

Fortunately, Texas let a property tax break for businesses called Chapter 313 expire in December 2022. That tax break was often used by renewable energy companies to lower their tax bills (and operating costs). Still, some already want to bring Chapter 313 or something like it back. This should be a non-starter.  

That’s not to say that climate change couldn’t have consequences, but considering the projected minimal benefits from expensive initiatives by politicians and the need for adaptation, the trade-offs seem hardly worth it. And this says nothing of the benefits of more CO2, which is necessary for life on earth.  

More broadly, if every signatory of the Paris Accord, including India and China, decarbonized by 2050, the temperature differentiation by 2100 would be just 0.17 degrees. And according to climate change activists, the cost to get there could be as much as $21 trillion through 2050. 

Businesses attempting to go green would be forced to raise their prices significantly to make a profit, a normally tough task that’s only made harder by present-day sky-high inflation. But if subsidies and other artificial means of skewing the energy market continue, then businesses that don’t receive subsidies and can’t afford to “go green” simply won’t be able to compete. This would result in a massive reallocation of resources that will contribute to less economic growth, more poverty, and less energy stability. 

Not only can over-dependence on unreliables lead to hardship, but it often counteracts the green energy innovation it wants to spur. 

​One of the reasons the U.S. is so prosperous is that it is the most responsible and efficient at producing and utilizing energy, having reduced criteria pollutants 78% in the last 50 years. And what has supported this is our wealth acquired via free-market capitalism.  

That’s why the best thing for activists and politicians seeking improved adaptation to climate change is to get out of the way and let the free markets, meaning free people, work.  

Subsidies, tax breaks, ESG initiatives, and other hindrances to a well-functioning market process should be abandoned. When politicians push funds into green energy agendas, often to win votes through virtue signaling, precious scarce taxpayer resources are wasted.  

Markets work, but we have to let them.  

Individuals and entities should be left alone when choosing which energy sources to direct their funds and business. Otherwise, the outcome is less prosperity and more poverty. There is a better way. 

Originally posted at Real Clear Energy. 

​Those states that practice more free-market capitalism with limited government tend to have better economic performance, providing an economy and civil society with opportunities to help the neediest among us achieve long-lasting prosperity.

Key points
– Comparing institutional frameworks in states and their outcomes provides key factors that encourage thriving states, families, and entrepreneurs.
– Measures of economic freedom and government burden are useful indicators of which states have growing economies and more jobs over time.
– The results for these states demonstrate how institutions that encourage individual liberty, free enterprise, and civil society support prosperous outcomes, particularly in relieving poverty.
– States ought to pursue policies that advance more of these lessons to provide a robust economy and flourishing civil society that will best help the neediest among us.

Original post at TPPF.