Universal basic income is about to arrive in America. Congressional Democrats’ $1.9 trillion stimulus bill provides for no-strings attached checks, limited only to parents of children under 18. This UBI for parents is billed as pandemic relief, but its real purpose is to put a stake in the heart of work-based welfare reform.
Supporters blandly describe their plan as “Child Tax Credit improvements for 2021.” It would replace today’s annual child tax credit, which tops out at $2,000, with more-generous “child allowances,” payable monthly. Those allowances are federal payments of $3,600 (or $300 a month) for each child under 6 and $3,000 ($250 a month) for older children. The current credit increases with income from work; the new one would provide the same large payments to all.
Under the guise of pandemic relief, the federal government would give a nonworking single parent with two preschool-age children and one in grade school $850 a month. This would come on top of other government benefits, including $680 a month in food stamps, amounting to $18,360 in combined annual income. That’s the equivalent, without accounting for taxes, of working 28 hours a week at $12.50 an hour. On top of that, the family would receive health insurance from Medicaid, and it may also receive housing and child-care assistance. Government benefits to nonworking households that are this generous are bound to reduce employment.
The bill would provide the new benefit for only one year, but the Washington Post reports that “congressional Democrats and White House officials have said they would push for the policy to be made permanent later in the year.”
Under current law, federal cash assistance to poor families flows through state social-services agencies, which require recipients to work, look for work, or at least engage in some activity designed to help them become employed. UBI for parents is designed to circumvent these requirements. If enacted it will more than double the government-provided cash assistance to households headed by single mothers, creating a perverse incentive for the unmarried poor to have more children. That would lead to more poverty, not less.
Unlike existing benefits, UBI for parents also avoids efforts to seek and collect child-support payments from parents who don’t live with their kids. That’s unfortunate, because efforts to collect child support have led to increased income for families in need and greater emotional connection between absent dads and their children.
If all this sounds vaguely familiar, it should. Sending monthly checks to nonworking parents was exactly how welfare used to work until 1996, when President Clinton signed the Personal Responsibility and Work Opportunity Act, for which
Sen. Joe Biden
voted. That law requires parents to work or train in exchange for welfare benefits and offered additional child care and other support to help them go to work.
Once UBI for parents is here, calls for UBI for everyone will follow. Democrats’ stimulus bill already includes more checks for adults (and their children), so the mechanics are in place. Last year then-
Sen. Kamala Harris
introduced legislation calling for $2,000 monthly “pandemic” payments per adult and up to three children. If such a scheme ever started, it would be politically difficult to shut off, despite its high cost.
Some conservatives and libertarians have argued for UBI, but only as a replacement for the rest of the welfare state. That is most definitely not what the Democrats are proposing—they want the UBI, and food stamps and Medicaid and all of the rest.
After the 1996 welfare reform, child poverty declined as single mothers increasingly worked and received benefits that supplemented their earnings. This combination of work plus aid made work pay, as Mr. Clinton used to say, and it allowed people to have the dignity that comes with earning one’s own living. Monthly welfare benefits with no expectation of work would reduce employment and earnings, establish lifelong government dependency for millions of Americans, and increase unwed childbearing. Democratic lawmakers may be happy to pave the way for UBI and finally reverse what Congress and Mr. Clinton did in 1996. It’s a bad bargain for everyone else.
Mr. Doar is president of the American Enterprise Institute. He served as commissioner of social services in New York City, 2007-14. Mr. Weidinger is a resident fellow in poverty studies at AEI and a former deputy staff director of the House Ways and Means Committee.
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