OMB's Shaun Donovan pitches anti-poverty program in Baltimore

"We know that this could work," OMB Director Shaun Donovan, speaking at the Johns Hopkins Carey Business School, said of the broader effort to confront poverty.
"We know that this could work," OMB Director Shaun Donovan, speaking at the Johns Hopkins Carey Business School, said of the broader effort to confront poverty. (Amy Davis / Baltimore Sun)

The Obama administration plans to propose a $2 billion pilot program this year to help families address emergency expenses before they become unmanageable — part of a broader push federal officials announced Wednesday to confront systemic poverty.

Office of Management and Budget Director Shaun Donovan, speaking in Baltimore a day after President Barack Obama delivered his final State of the Union address, said the proposal would direct money to states and local governments to help people pay for transportation costs to a job interview, for instance, or pay overdue rent to avoid eviction.

That idea and others to be included in the president's budget next month are likely to face close scrutiny in the Republican-controlled Congress. The executive budget is a blueprint Congress may choose to ignore, and it's not yet clear whether lawmakers will even consider new federal spending in this election year.

Donovan, a former secretary of the Department of Housing and Urban Development, revealed cursory details of several proposals to confront poverty Wednesday at the Johns Hopkins Carey Business School.

"We know that this could work," he said. "The question is: Can the federal government really disrupt this old, top-down, outdated approach and replace it with a model of customizing what the federal government does?"

Donovan addressed a small group of academics and local officials in Baltimore as part an effort by the White House to spread its State of the Union message beyond the House chamber. In contrast to the president's more expansive approach in his address, Donovan hit on policy proposals the administration hopes to pursue this year.

A spokesman for Republican House Budget Committee chairman Tom Price of Georgia did not respond to a request for comment. Republican leaders have largely dismissed the president's speech.

GOP lawmakers were preparing to arrive in Baltimore later Wednesday for their annual issues retreat.

Several members of Obama's Cabinet fanned out across the country to address other policy matters. Health and Human Services Secretary Sylvia Burwell is scheduled to speak in Indianapolis about the Affordable Care Act on Friday. Commerce Secretary Penny Pritzker is set to speak in Denver about the impact of climate change on the economy.

The president traveled to Omaha, Neb., and Baton Rouge, La., to reinforce the major themes of his speech, including a call for a political system that unites Americans.

After a year that saw a national discussion on urban policy in the wake of the deaths of Freddie Gray and other young black men during interactions with police, Obama discussed the issue only in broad terms in the State of the Union address. White House officials had told reporters for several days not to expect a policy-heavy speech.

Nearly a quarter of the population in Baltimore lives below the poverty line, compared with 10 percent in Maryland.

"For the past seven years, our goal has been a growing economy that works better for everybody. We've made progress. But we need to make more," the president said during the prime-time address. "America is about giving everybody willing to work a hand up, and I'd welcome a serious discussion about strategies we can all support, like expanding tax cuts for low-income workers without kids."

The five-year, $2 billion pilot program Donovan discussed would be separate from the Clinton-era Temporary Assistance for Needy Families program.

TANF provides about $16.5 billion in federal funding annually to states for a wide range of benefits. But some say it directs too little money to families in need.

Maryland spent $596 million on the program in 2014, including $257 million in federal funds. But while the number of unemployed and families on food stamps has increased significantly in the past decade, the number of TANF beneficiaries has grown at a much slower pace — reaching about 25,000 people at the end of 2014, according to the Center on Budget and Policy Priorities.

"There are people who need assistance who are no longer served by TANF," said LaDonna Pavetti, a vice president at the Washington-based group. The new program, she said, "is something that is geared toward meeting a very specific need."

The idea, Donovan said, would be to help families in danger of tipping "from a tenuous hold on stability to an episode of crisis." The program is partly an attempt to respond to the kinds of concerns raised by Hopkins sociologist Kathryn J. Edin and H. Luke Shaefer in their acclaimed 2015 book "$2 a Day."

Edin, who led the discussion with Donovan, said the $2 billion investment could have a significant impact on "stopping the spiral" of expenses that can sometimes devastate a family.

Edin said only about $5 billion of TANF program funds actually wind up in families' household budgets — so a $2 billion fund may have some reach.

Asked about Obama's address, Edin said it was important the president framed the issue of poverty through what he described as American values.

"I think many of the things in this domain that the president talked about are things that everybody can agree on: It's hard to be against the idea that if you work hard you should be able to get ahead," Edin said. "I think starting from those premises is really important — to think about policy through the lens of the American value system."

In addition to the pilot effort, Donovan said the president's budget will call for a 75 percent increase in funding for the Promise Neighborhood program — focused on improving schools in high-poverty communities — up to $128 million. The administration will request $200 million for the Choice Neighborhood program, a 60 percent increase. That program is geared toward helping neighborhoods with public housing.



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