Commentary: The “COVID relief” lottery demonstrates the madness of guaranteed income | Opinion columns


LA County has accepted applications for a lottery that will divide a $36 million prize among 1,000 lucky winners, each receiving $1,000 a month for 36 months.

Officials boast that their “guaranteed income program” using COVID-19 relief funds “will come without the examination and work requirements of certain public benefits.” And this time, they mean exactly what they say: winners aren’t even required to complete follow-up surveys and interviews.

While the researchers behind the program have set themselves the ambitious goal of “determining the impacts of guaranteed income on the general health and well-being of recipients”, the only data they are certain to obtain is a list of transactions made with the debit cards used to pay the winners. .

We can expect them to tell us that the vast majority of winners spent their bargains at regular stores, like regular people, just as they did at a similar program in Stockton.

They may even find that those who complete their voluntary survey report slightly better physical, mental, or financial health. After all, who wouldn’t expect to be a little better off after getting an extra $1,000 every month, no strings attached?

Even if they aren’t, those who respond to the survey may think they should report an improvement in their living situation, if only to show their appreciation for such a substantial gift.

The researchers, however, are sure not to report one thing: that the Guaranteed Income Program is not feasible as a long-term national policy.

Expanding the program to provide the same $1,000 a month to every current US resident would cost $4 trillion a year. Paying for it would require more than doubling federal revenue. This would force Washington to gobble up an additional 17 cents of every dollar of US GDP – a level of taxation that would cripple the economy.

Moreover, with global GDP hovering around $11,000 per capita, a guaranteed payment of $12,000 a year would attract an overwhelming influx of illegal immigrants, driving up costs. Even with literally all the money in the world, a program like this just isn’t affordable.

Fortunately, the choice is not between providing universal documents without conditions and leaving those who need them to fend for themselves. In fact, the most popular and effective alternative is a means-tested welfare system with precisely the “check-and-work requirements” that the proponents of the guaranteed income program find so objectionable.

More than 90% of the public agrees that “able-bodied adults who receive money, food, shelter and medical assistance should be required to work or prepare for work as a condition of receiving these government benefits”. And history proves them right.

The 1996 federal welfare reforms introduced the principle of reciprocity into the welfare system, requiring recipients of the primary cash welfare program for families with children to take positive steps toward self-sufficiency. in exchange for assistance. After these reforms were implemented, the overall child poverty rate – which had remained largely frozen for decades – fell dramatically.

Children today are half as likely to live below the official poverty line as children in 1996. Severe child poverty (with resources less than half the official poverty line) has been virtually eliminated. Moreover, the rapid disintegration of the family has come to a halt, as the percentage of children raised by two biological parents has remained relatively constant since welfare reform.

The Biden administration’s recent proposals for a permanent family allowance, which violate the principle of reciprocity, would enable long-term dependency, undermine work and marriage, and ultimately hurt poor families.

Instead, Congress should reform other welfare programs, such as the Earned Income Tax Credit and Supplemental Child Tax Credit cash grant programs, to reduce waste and fraud and redirect savings to remove marriage penalties and encourage American families to prosper.

The Los Angeles County “experiment” is just the latest effort to deliberately ignore and undermine the success of welfare reform. Policymakers should reject proposals that threaten to destabilize marriage and erode the enormous progress made over the past quarter century in the fight against child poverty.

Jamie Bryan Hall is a research fellow at The Heritage Foundation, specializing in the quantitative analysis of welfare programs.


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