In the United States, the idea of a universal income is gaining ground among Democrats.
At a time when Democrats support the idea of a more interventionist government, some are being seduced by an idea that has not received serious attention since the 1970s: a guaranteed minimum income for all Americans.
Entrepreneur Andrew Yang’s presidential bid has gained momentum with his proposal to provide a “freedom dividend” of $1,000 a month to all Americans – from the poorest to the richest, whether or not they have a job.
No majority current public office holder joined Mr.Yang’s call for this universal basic income.But measures aimed at creating some sort of basic income – albeit not universal – in the form of a minimum for millions of households have the support of other Democrats in the race for the White House and of many parliamentarians.
Party leaders support expanding the range of federally funded economic rights, including universal access to health care, colleges, child care and high-speed Internet.The right to a basic income does not receive as much attention, but it does come into the debate as Democrats refine their message to oppose President Trump’s bid for re-election.
“No president has done more to support the families of working people,” says Kayleigh McEnany, the national press officer for the Trump campaign, noting that “unemployment remains at its lowest level in generations, while wages continue to rise at the fastest rate in a decade.
The Democrats, who aspire to compete with Mr.Trump, say many families still struggle to cover their basic daily expenses.Democratic candidates also seek to oppose their programs to Trump’s 2017 tax cut, which has reduced the tax bill for most families, but has mostly affected businesses and affluent households.They would fund their revenue programs by cancelling much of these tax cuts.
The five senators running for president, including Elizabeth Warren of Massachusetts on the left wing of the party and Minnesota’s moderate Amy Klobuchar, support measures to give more people access to the child tax credit, in essence creating a payment guarantee for parents.They also support ideas to expand the Working Income Tax Credit or WITC, an income support program for low- and middle-income families.
Vermont Senator Bernie Sanders supports a separate program that would give all Americans earning less than $50,000 a year a tax-free annual check worth up to $3,000 with no strings attached.Democrats associate these projects with more conventional policies, such as increasing the minimum wage.
There are also signs of interest on the Republican side for some form of guaranteed income, at least for families with young children.In December, Utah Senator Mitt Romney teamed up with Colorado Senator Michael Bennet, a longtime candidate for the 2020 Democratic nomination, to propose a guaranteed annual payment of $1,000 for all children under age 18, with an additional $500 per child six years old or younger.
“One of the big ideas right now is that we should guarantee a minimum income for every American,” says Natalie Foster, co-chair of the Economic Security Project, a progressive group founded after the 2016 election that has worked with think tanks, members of Congress and state and local governments to develop resource guarantee bills – and has funded experiments in Stockton, California, and Jackson, Mississippi.”We’re trying to figure out how we can go back to some of the great ideas of an earlier era – and realize them within the financial constraints and political realities of today,” she adds and purchase products at the right cost.
Some of the proposals bother experienced Democrats.They’re worried that the party is moving too far to the left for the general public.They are also concerned that some of these new ideas, particularly those aimed at alleviating work-related conditions in income support programs, may undermine support for existing policies.
“For me, we may be facing an ‘OK boomers’ moment,” says Jared Bernstein, who was former Vice President Joe Biden’s chief economist in the Obama administration.”The EITC has always been conditioned on the existence of salaries, and in my experience, this link has been one of its political forces.»
The belief that Washington should create a revenue floor sparked a broad debate half a century ago.In 1962, Conservative economist Milton Friedman called for a “negative income tax”, a kind of government wage for the poor.A few years later, Republican President Nixon proposed a guaranteed annual income for families with children that would have amounted to about $1,600, or $10,000 today.His bill passed the House twice and then died in the Senate under cross attacks from the Conservatives, who said it went too far, and the Liberals, who said it did not go far enough.
Federal income support policy changed in the 1980s as President Reagan supported the idea that guaranteed government assistance to the poor created an unhealthy culture of dependency.Emphasis was then placed on putting in place conditions to benefit from the remaining aid programmes.
In the 1990s, President Clinton expanded income support policies, but largely maintained them on the condition that recipients be gainfully employed and have children at home – a comprehensive framework that still defines federal policies today.The Trump administration has sought to strengthen work requirements.But many Democrats on Capitol Hill and in the election campaign want to ease these restrictions – or drop them altogether – on the grounds that they exclude millions of struggling Americans.
Beyond Yang, Michigan Democratic Representative Rashida Tlaib introduced her BOOST Act, a proposal to give up to $3,000 a year to Americans earning less than $50,000.The scheme, presented in June, has thirteen co-sponsors.
A larger group of Democrats – including 44 Democrats in the Senate and two Independents – co-sponsored the Working Families Tax Relief Act, proposed in April by Ohia Democratic Senator Sherrod Brown.According to a study by the Center for Budget and Policy Priorities, a Washington-based left-wing think tank, it would provide new federal income support to 114 million Americans and lift seven million people above the poverty line.If only one Democratic senator – Kyrsten Sinema of Arizona – has not signed it, no Republican supports it.
The bill, like the Romney-Bennet proposal, would remove all work and income conditions that exist under the child tax credit.It would also eliminate requirements under the EITC program, which provides minimum benefits only to workers without children, and expand the definition of “working age” to allow more people to benefit.
While many Democrats still support the principle that income support should be conditional on employment, some want to broaden the definition of “work” to allow more people to qualify.
The current rules require beneficiaries to receive a paycheque from an employer.Four bills introduced in the last two years sought to allow university students and unpaid caregivers – people who stay at home to care for a young child or an elderly parent – to receive work-related government benefits.Versions of this concept have won the support of at least two presidential candidates, former New York City Mayor Michael Bloomberg and New Jersey Democratic Senator Cory Booker.
There is still agreement in this country that work is important,” Foster said.We want to build on that by broadening what we mean by work.»