29/09/2020

Andrew Yang has drawn support with his proposed universal basic income; other 2020 Democratic candidates back policies to create financial floor

As Democrats embrace a more activist government, some are flirting with an idea that hasnt received serious attention since the 1970s: a minimum guaranteed income for all Americans.Entrepreneur
Andrew Yangs
presidential candidacy has gained traction with a proposal to give a $1,000 monthly freedom dividend to all Americansfrom the poorest to the richest, employed and unemployed alike.No mainstream officeholder has joined Mr. Yangs call for a universal basic income. But policies to create a kind of basic incomealbeit not universalin the form of a new financial floor for millions of households have drawn backing from other Democrats seeking the White House and many lawmakers.
Party leaders are embracing a range of federally backed economic rights, including universal access to health care, college, child care, and broadband. The right to a basic income doesnt get as much attention, but it is seeping into the debate as Democrats hone a message to counter President Trumps bid for re-election.
No president has done more to support working families, says Kayleigh McEnany, the Trump campaigns national press secretary, citing, saying the unemployment rate remains at generational lows, as wages continue to grow at the fastest pace in a decade.
Mr. Trumps would-be Democratic rivals say many families still struggle to cover basic living costs. Democrats also are looking to contrast their plans with the 2017 Trump tax cut, which lowered tax bills for most families but did so most heavily for corporations and affluent households. They would pay for their income plans by reversing much of the tax cut.
All five senators running for president, including liberal Elizabeth Warren of Massachusetts and moderate Amy Klobuchar of Minnesota, have endorsed proposals to give more people access to the child tax credit in a way that would essentially create a guaranteed payment for parents. They also back ideas to expand the earned-income tax credit, or EITC, an income-support program for lower- and middle-income families.
Vermont Sen. Bernie Sanders
also backs a separate plan to give all Americans making less than $50,000 a year an annual tax-free check worth up to $3,000, no strings attached. Democrats combine those plans with more conventional policies, such as boosting the minimum wage.
There are also signs of Republican interest in some form of guaranteed income, at least for families with young children. In December, Utah Sen. Mitt Romney teamed up with
Colorado Sen. Michael Bennet,
a long-shot candidate for the 2020 Democratic nomination, to propose a guaranteed annual payment of $1,000 for all children under 18, with an additional $500 for children aged 6 or younger.
One of the big ideas this cycle is that we should guarantee an income floor 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 income-guarantee bills, and has funded experiments in Stockton, Calif., and Jackson, Miss. Were trying to figure out how we can get back to some of the big ideas from an earlier eraand get them done within the fiscal constraints and the political realities of today, she adds.
Some of the proposals unnerve veteran Democrats. They worry the party may be shifting too far left for the broader public. They also fear some of the new ideas, especially those to ease work requirements in income-support programs, risk undermining support for existing policies.
This might be an OK boomer moment for me, says Jared Bernstein, who was chief economist to former Vice President
Joe Biden
in the Obama administration. The EITC has always been conditional on wages, and in my experience, this connection has been one of its political strengths.
The belief that Washington should create an income floor last stirred widespread debate half a century ago. In 1962, conservative economist Milton Friedman called for a negative income tax, a kind of government salary for the poor. A few years later, President Nixon, a Republican, proposed a guaranteed annual income for families with children that would be worth about $1,600, or $10,000 in todays dollars. His legislation passed the House twice, before dying in the Senate under attack from both conservatives, who said it went too far, and liberals, who said it didnt go far enough.
The politics of federal income support changed in the 1980s, as President Reagan argued that guaranteed government aid to the poor created an unhealthy culture of dependence. The focus became attaching conditions to remaining assistance programs.
In the 1990s, President Clinton expanded income-support policies, but kept them largely contingent on recipients both holding paying jobs and having children at home, a framework that defines federal policies to this day. The Trump administration is seeking to tighten the work requirements.
But many Democrats on Capitol Hill and the campaign trail want to loosen those restrictionsor drop them outrightarguing they exclude millions of struggling Americans.
Beyond Mr. Yang,
Rep. Rashida Tlaib
(D., Mich.) has laid out her BOOST Act, the proposal to give up to $3,000 each year to Americans making less than $50,000. The measure, introduced in June, has 13 co-sponsors.
A bigger group of Democrats, 44 Senate Democrats and two independents, has co-sponsored the Working Families Tax Relief Act, introduced in April by
Sen. Sherrod Brown
(D., Ohio). It would provide fresh federal income support to 114 million Americans and raise seven million people above the poverty line, according to an analysis by the Center on Budget and Policy Priorities, a left-leaning Washington think tank. Only one Democratic senator, Arizonas Kyrsten Sinema, hasnt signed on. No Republicans support it.
The billlike the Romney-Bennet proposalwould drop all work and earnings conditions attached to the child tax credit. It also would shed the constraints in the EITC program that allow only minimal benefits for workers without children and expand the definition of working age to let more people participate.
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While many Democrats still adhere to the notion that income support should be contingent on work, some want to widen the definition of work, allowing more people to qualify.
Current rules require recipients to receive a paycheck from an employer. Four bills over the past two years would allow unpaid college students and caregiverspeople staying home to care for a young child or elderly parentto receive government benefits tied to work. Versions of the concept have won endorsements from at least two presidential candidates, former New York Mayor
Michael Bloomberg
and
Sen. Cory Booker
(D., N.J.).
Theres still an understanding in this country that work is important, says Ms. Foster. We want to lean into that, by expanding what we mean by work.
Write to Jacob M. Schlesinger at jacob.schlesinger@wsj.com
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