The American policy debate is undergoing an important change. Some influential Democrats no longer view welfare benefits as “work supports” as they have done for the past generation. Instead, they increasingly see welfare benefits as ends in themselves, regardless of whether recipients work consistently or even work at all to receive them. Meanwhile, the list of benefits that prominent Democrats think that government should provide, from payouts resembling “universal basic income” to “carbon dividends,” free college tuition, and free health care, is growing rapidly.
This twin shift reflects a rejection of the longstanding Democratic position on welfare reform and the biggest proposed expansion of the welfare state since at least the Great Society. With the likely 2020 Democratic presidential candidates pushing many of the plans, they will be debated and possibly enacted in the years ahead. The most dramatic departure from work support logic involves universal basic income. A recent study noted a primary feature of universal basic income is that it “provides a sufficiently generous cash benefit to live on without other earnings.”
Inspired by fears of a dystopian future in which low-wage jobs are replaced by technology, the thinking seems to be that if there is no work, there is no point in expecting people to work either. While some have cast universal basic income as replacing current welfare benefits, the new payments under discussion would be on top of Medicaid, housing, tax credits, food stamps, and other benefits for people with low earnings, piling onto the benefits that adults stand to lose if they work and earn more. Of course, fewer will do so.
No federal legislation has proposed a full universal basic income yet. But variations of “handing people cash” have emerged from the possible Democratic presidential candidates. Cory Booker would deposit $2,000 annually in federal cash into savings accounts for poor children (with sliding scale payments for other children) offering over $30,000 per child through age 18. Others would grow subsidies even for very low levels of work. Kamala Harris would pay households earning as little as $6,000 in wages, two people working at most one day each per week, an additional $6,000 in federal cash. Sherrod Brown would increase the earned income tax credit sixfold for childless adults to $3,000 and pay that to people working fewer than two days per week at the $15 minimum wage that he also proposes.
These federal programs would involve huge wealth transfers and are hardly targeted to restoring and strengthening the middle class. The Harris plan, for example, would most heavily subsidize limited part time work, not the kind that actually can lift families out of poverty. One supporter rightly dubbed it “a kind of optional” universal basic income.
Not to be outdone, Bernie Sanders has proposed free college tuition and single payer health care for all “regardless of income.” One is a massive new entitlement without work requirements, and the other a flattening out of benefits currently more generous for families that work. As with the proposals to “hand people cash,” benefits would flow to those who cannot support themselves, but also to those who could, but prefer collecting benefits over working. How many 18-year-olds wouldn’t choose “free” college over an entry-level job, even if work made more sense?
Still to come are new “carbon dividends” that would be needed to offset potential regressive effects of the “Green New Deal” that would raise energy prices. As the poor are forced to spend relatively more of their income on energy, some carbon tax proponents are proposing new spending programs to help the poor from sinking deeper into poverty. Perhaps that is what supporters like Alexandria Ocasio-Cortez mean by their calls for “measures such as basic income programs and any others.”
These sorts of massive benefit increases stand in contrast with the past two decades, when many liberals touted expansions of food stamps and Medicaid as “work supports” needed to increase work and earnings to help families escape poverty. That “work supports” rhetoric seems long gone among Democrats, as most of the left has dug in its heels against extending work requirements to benefits like food stamps and Medicaid.
This latest turn hearkens back to the 1980s, when liberals resisted work requirements for welfare recipients, deriding them as making recipients “sing for their supper.” In 1996, following the lead of President Clinton, more than half of Democrats in Congress rejected that view and joined nearly all Republicans in supporting the “work first” welfare reform law. This resulted in less poverty and welfare dependence precisely because it successfully promoted more work and earnings by low income parents.
Rejecting that approach now in the name of liberating the poor from work will not liberate anyone. It will only harm the very people policymakers are claiming to help by making it harder for them to escape poverty for good.
Matt Weidinger served for more than two decades on the staff of the House Ways and Means Committee. He now works as a resident fellow in poverty studies at the American Enterprise Institute based in Washington.
