Category Archives: Poverty

Strassel: Bring Back the Jack Kemp GOP

Kim Strassel’s piece in the Wall Street Journal today is really good. Enjoy!

Bring Back the Jack Kemp GOP

Republican presidential candidates should embrace the anti-poverty initiatives championed by Kemp and Bob Woodson.

Some 30 years ago, an influential congressman named Jack Kemp gave a call to Bob Woodson, and in doing so became a Republican model for empowerment politics and minority outreach. A high-profile group of conservatives is staging a revival, looking to finally engage the modern left on the politics of the poor. Republican presidential candidates, pay attention.

As Hillary Clinton was rolling out her economic plan Monday—bashing Republicans as callous to the plight of struggling Americans—influential conservatives were taking to their own stage to respond. They know Democrats will make inequality a driving theme of the 2016 race, accusing the GOP of wanting to slash government funding for the needy, of driving policies that hurt the poor.

What they billed as an “anti-poverty summit” in Washington on Monday was a road map. Up on stage, three decades later, was none other than Mr. Woodson, a titan in conservatism on poverty issues. A veteran of the civil-rights fight, Mr. Woodson became disenchanted with the left’s devotion to failed government poverty programs. He started the Center for Neighborhood Enterprise, which transforms low-income areas from the inside out.

The philosophy is that low-income individuals and neighborhood organizations must play the central role in fixing their communities, and that these efforts benefit from free-market concepts like competition, entrepreneurship, efficiency and metrics. His first federal partner was Kemp, who embraced and evangelized the Woodson approach starting in the 1980s, using it to pass smart reforms, to champion innovations like “enterprise zones,” and to give his party a model for inspirational, anti-poverty politics. (A model his party quickly forgot.)

Joining Mr. Woodson on stage was (who else?) House Ways and Means Chairman Paul Ryan, a Kemp protégé who a few years ago became awed by CNE’s remarkable track record. The Wisconsin Republican worked the method into a new policy agenda, including his proposal last year to combine and transform federal poverty programs into “opportunity grants” that go to the states, and allow local administrators to get money to groups that actually work.

The message has meanwhile found a broader voice in a new conservative news site, Opportunity Lives, run by John Hart, a former staffer to retired Oklahoma Sen. Tom Coburn. Its mission is to cover and hail conservative solutions, and it has already produced a high-quality, seven-part documentary called “Comeback” that features inspiring real-life stories out of the Woodson model. More than a half-million people have watched it.

Monday’s event featured all these players, as well as a celebrities such as NFL Hall of Famer Deion Sanders, opinion-makers like National Affairs editor Yuval Levin, and scholars like the Manhattan Institute’s Fred Siegel. It follows a mid-June event at which House Speaker John Boehner offered a private screening of “Comeback,” attended by more than a dozen influential Republican leaders and members. Politicians nationally have requested briefings, and the concept is working its way into political discourse across the country.

The attraction is first and foremost great policy. Federal poverty programs fail because they are one-size-fits-all bureaucracies that keep recipients in dependency. As Mr. Woodson told me in an interview this week, this is because the left has created a poverty-industrial complex, in which most federal dollars go to “those providing the services—the social workers, the drug counselors. That entire structure is hostile to helping the poor, because these folks have their own financial interest.” The Woodson approach works because it is local, tailored, volunteer-oriented and gets money to the needy.

The Woodson approach will also resonate with most Americans, who live and serve in local communities, and understand the power of that over government handouts. It’s also a rebuttal to Democrats like Mrs. Clinton who claim Republicans don’t care. For the Jeb Bushes and Marco Rubios, orienting their campaigns around opportunity, this deserves central billing.

It’s even an inroad to minority voters, though Mr. Woodson warns that Republicans need to go beyond rhetoric. “I keep telling Republicans: Stop assuming the only way to appeal to blacks is through the race door. The untapped opportunity is the broken policies in these urban centers that are strangling the poor. Roll up your sleeves, go into your districts, meet the legitimate leaders, minister to their needs. Recruit the businesses that fund your campaigns to help. Democrats inherited these votes; Republicans have to earn them.”

Mr. Woodson points to politicians like Ohio Gov. John Kasich, who drove reform making it easier for post-prison offenders to get their occupational licenses—and thus a job—and who won 25% of the black vote when re-elected in 2014.

The Kemp drive was influential in the GOP 1990s embrace of welfare reform, and the pity is the party retreated from that space. The 2016 race is a chance to re-embrace it, and give Mrs. Clinton a run for her own rhetoric.

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Rand Paul: Channeling Jack Kemp

Andy McDonald has written an interesting post for a central Kentucky outlet:

Rand Paul: Channeling Jack Kemp

Jack Kemp, for example, doggedly peddled enterprise zones, not government entitlements, as a remedy for urban poverty. By keeping tax dollars in the community, Kemp argued, poor neighborhoods could grow new businesses, build a new future, and break the cycle of dependence on the government.

Moreover, Jack Kemp went searching for votes in places where no other Republicans would go. He went to distressed urban neighborhoods and he enthusiastically courted African American votes, figuring Republicans would never get their support if they didn’t at least ask.

In 2015, it is Kentucky Senator Rand Paul who seems to be picking up the legacy of Jack Kemp – the first true proponent of what has been coined compassionate conservativism.

A few weeks back, the senator from the reddest of red states went to Chicago to address a predominantly African American audience. In his speech, he decried the impact of violent crime, not just in Chicago, but all over America. Some grandstanding politicians can take as long as 10 seconds to tweet that black lives matter, but you can bet they wouldn’t get within 20 miles of a distressed neighborhood.

In contrast, Rand Paul’s appearance sent a message: He was there to tell voters, face to face, that black lives matter. It was a page right out of Jack Kemp’s playbook. And what did Paul offer as one remedy for poverty? An idea resembling Kemp’s pioneering urban enterprise zones.

Read the entire post here.

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Kemp: Fighting a new war on poverty

By Jack Kemp

May 25, 2007 for Townhall.com

To ignore the potential contribution of private enterprise is to fight the war on poverty with a single platoon, while great armies are left to stand aside. – Sen. Robert F. Kennedy

Mario Cuomo of New York electrified the 1984 Democratic Convention with his tale of America as two cities, one rich and one poor, almost permanently divided into two classes. Today John Edwards is running for president on this same platform and using the same metaphor.

But America is not divided into two cities; instead, America is divided into two separate and unequal economies, one that works well and one that is fatally flawed and must be fixed so as to combat poverty.

Our mainstream economy is entrepreneurially capitalistic: It is market-oriented and based on private property, ownership, the rule of law and with widespread access to capital and seed corn for new business ventures. It rewards work, savings, investment and productivity. This economy dominates the American market and serves as an example to the world of democratic capitalism.

The second economy functions in almost direct opposition to our mainstream capitalist economy. Similar to a Third World socialist economy, it denies people an entry into the mainstream due to the barriers to economic activities along with a virtual absence of any link between human effort and reward. It perpetuates poverty, dependency and welfare while discouraging employment, and it prevents access to capital, ownership of assets and quality education. The irony is that this second economy was created out of a desire to help the poor, alleviate suffering and provide a social safety net. However, instead of independence, this welfare-based economy has led to near perpetual dependency, and the social and economic costs to our nation are enormous in terms of unfulfilled potential and dashed dreams. As secretary of Housing and Urban Development from 1988 to 1993, I visited pockets of poverty in ghettos and barrios throughout America. I spoke personally with people living in the depths of poverty and hopelessness. I vowed then to take part in a bipartisan effort to help create an urban American Renaissance. I applaud Edwards’ attempts to raise the issue of poverty and challenge the Republican candidates to join in the debate.

The problem is that self-improvement and ownership of assets are discouraged by regulatory and tax policies that trap people in impoverished areas. In too many cases, the poverty that exists today is due in part to government welfare coupled with regulatory and tax policies that punish work, savings and investment and discourage ownership of assets. The system redlines certain areas of our country, limiting people’s access to capital, credit, mortgage loans and well-paying jobs.

To wage a real war on poverty, we should launch a 21st century Marshall Aid Plan in the cities of America to reform education; create job opportunities; and provide access to capital, credit and ownership opportunities for low-income Americans. This plan must be based on equal opportunities to get jobs, own homes and launch businesses.

The first step is to create Enterprise or Empowerment Zones that would eliminate the capital gains tax in the newly “green-lined” zones, allow for expensing of all investment in plant machinery and technology, and eliminate payroll taxes for men and women who are first-time job holders up to 200 percent of the poverty line.

Next we need to cut the bureaucratic red tape that makes development in urban areas. We need to look at the legal barriers to production and commerce. Local impact (development) fees, application processing costs, building codes, zoning and land use restrictions, and nongrowth policies greatly increase construction costs. Instead of creating regulations that make it more difficult to build in urban areas, entrepreneurs need to be offered incentives for investing in cities.

We must develop a tax reform system that rewards labor, savings and capital formation. A sure way to harm the economy and slow growth is through a capital gains tax, which is not a tax on the rich but rather on the poor who hope to improve their situations. You can’t get rich on wages. The only way to create wealth is to work, save, invest, make a profit and reinvest.

Finally, we need to provide homeownership opportunities and affordable housing to the most impoverished in society who often become trapped in public housing. Through public-private partnerships with organizations such as the Federal Housing Administration, Fannie Mae and the Federal Home Loan Bank, we need to dedicate a percentage of profits to help develop work-force and affordable housing while encouraging homeownership policies to get people on the path out of poverty.

Through eliminating America’s second economy and tapping into the economic forces of a more democratic system of capitalism, we can develop a formula for ending chronic poverty in America. Everyone should have the opportunity to go as high as their merit, ability, determination and quality of their performance can carry them.

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Kemp: From poverty to prosperity

By Jack Kemp

August 30, 2004 for Townhall.com

The Republican National Convention is under way in New York City – the capital of capital, the epicenter of economic exuberance. This year, the Republican Party has a historic opportunity to capture the hearts, hopes and imagination not only of current shareholders but also the rest of America yearning to participate in the Ownership Society. By offering a pro-growth, pro-family tax system and creating opportunities for all Americans to own their own retirement accounts, their children’s education and their own homes, Republicans have an opportunity to garner support from the Democratic base and reshape the political landscape for decades to come.

Workers are no longer concerned merely with wages and salaries; they are increasingly interested in saving and investing – in the process of wealth creation. One can’t get rich on wages; the only way to get rich is to earn, save and invest.

I cringe when I hear the rhetoric of class warfare, which seems to have become the raison d’etre of the Democratic Party, whether they are ranting about “the people versus the powerful” or increasing taxes on the “top 2 percent.” They just don’t get it. The American dream is to become rich, not to punish them.

It’s not that Democrats hate the rich – so many of them are rich – or that they care more about the poor; they have little faith in poor people and think the only way the poor can improve their lot in life is for government to take from the rich and redistribute the lucre to them.

Poverty in America is a disgrace and must be addressed through expanding ownership opportunities. It is also, in many cases, more a function of the life cycle than one’s station in life. Research shows that as much as 25 percent to 40 percent of Americans move from one income quintile to another in a single year. Today’s laborer is tomorrow’s investor, owner and job creator. The worker and investor is the same person, just at different stages of his or her life.

Stock ownership in America has expanded dramatically and is at all-time highs with well over half of American households owning stock. While stock ownership has expanded dramatically in America, far too many Americans are still being left out of this new prosperity. After many American workers are through paying Social Security payroll taxes, they have no discretionary income left to save. The problem is not capitalism run amok or too much capitalism, as Democrats suggest, but rather that some areas of the economy are starving for lack of access to capital.

The day after the Census Bureau released its annual report recently, the headline in USA Today proclaimed, “Poverty rose by million.” These numbers are overstated and misleading. For one, we should not measure poverty by income but by standard of living. Roughly 50 percent of people living in “poverty” own a home. Two-thirds have air conditioning, 97 percent own a television – 50 percent of those own two – and 26 percent are obese. We don’t have a poverty problem in the traditional sense of the word; poverty in this country generally does not mean people are going without food, clothing or shelter. More importantly our poverty numbers, because they are based on income, omit many kinds of cash and noncash income such as Medicaid, food stamps and public housing.

That said, we can do better, and indeed we must. In the past we made the mistake of treating poverty as if it were a chronic disease from which we could alleviate the pain but for which there was no cure. We created welfare and entitlement programs to ease the pain of poverty. Social Security was originally designed to save older Americans from poverty, and for years it did just that. But today, 80 percent of workers are paying more in payroll taxes than in income taxes. The program that was designed to keep seniors out of poverty is preventing too many workers from escaping it.

We reformed our welfare laws by enacting welfare-to-work to restore incentives to work, but that was not enough. Now we must take the next step and make it possible for all workers to save for their homes, their education and their retirement.

The real problem of poverty in this country is a poverty of ideas and imagination among public officials such as Federal Reserve Chairman Alan Greenspan, who said recently that we must cut Social Security benefits because the government can’t “afford” to pay what it promises retirees.

Of course it can’t; neither could the Soviet Union for all those years nor can communist Cuba today keep the promises it makes. The key to modernizing Social Security is not to cut benefits to save the socialistic tax-and-transfer program that demands each successive generation of workers pay for the retirement of preceding generations but rather to transform Social Security into a true worker-based investment program that allows each worker to save for his own retirement.

The pain of paying for the transition to personal retirement accounts should fall on obese government, not individual Americans. The Congressional Budget Office projects that under current trends, the size of government will increase by two-thirds between now and midcentury.

Only a small fraction of the increased spending (about 5 1/2 percent) would be required to pay for the transition to personal retirement accounts without cutting benefits or raising taxes. Empower more workers; pay fewer bureaucrats!

The key to creating an investor nation and making every worker an owner by creating a fully funded personal retirement system will be modest government spending, growth restraint and continued long-term economic growth, which is where tax reform enters the picture. By offering voters a realistic vision of these reforms, the Republican Party will take a giant leap toward becoming the All-American Party capable of competing for every vote in every district in America. Sen. John Kerry has demonstrated he intends to keep the Democratic Party as a cradle-to-grave security blanket.

President Bush intends to position the Party of Lincoln as a party of poverty-to-prosperity opportunities.

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