This article was orginally published on June, 6 2019.
Rep. Rashida Tlaib (D-Mich.) has released a plan to spend trillions of federal dollars on direct cash subsidies to working class and poor Americans, including the unemployed and those with no earnings.
Tlaib’s bill would give direct cash help to those at the bottom of the income distribution — annually offering $3,000 to individuals and $6,000 to families — in an attempt to reduce poverty in the United States and bolster the wages of the poor.
The Michigan lawmaker’s proposal expands on a bill from Sen. Kamala D. Harris (D-Calif.), which would also direct trillions in tax credits to low-income Americans but offers no or smaller benefits for the poorest people in the United States.
By contrast, Tlaib’s plan offers the full $3,000 or $6,000 credit to those with no income — a significant break from orthodoxy among more centrist Democrats, who have traditionally argued giving federal cash to the unemployed will discourage them from finding jobs.
The revision means Tlaib’s plan is the closest Congress has seen to a “universal basic income,” or the idea that every American should get a check from the federal government that they can live on, according to more than a half-dozen economists and policy experts. Tlaib’s plan does not count fully toward a UBI, because it does not offer assistance to more affluent families.
The congresswoman said in an interview that her intention is not to craft a UBI plan but to ensure that Americans who earn nothing also receive a generous benefit, citing her experience working with disabled people, students, caretakers and the elderly.
“To kick them out of this category and say, ‘They deserve less’ — to me, it doesn’t make any sense,” said Tlaib, whose congressional district includes Detroit and is one of the poorest in the country. “These are my folks. These are our neighbors who need it most.”
Tlaib’s bill, called the LIFT+ Act, has little chance of approval by a Republican-controlled Senate or White House, but it represents a shift in economic policy and welfare policy among Democratic lawmakers that could further expose internal party fissures.
A first-term lawmaker, Tlaib is a member of the Democratic Socialists of America and ally of Rep. Alexandria Ocasio-Cortez (D-N.Y.), who has also urged the Democratic Party to push more aggressive government intervention. She made headlines earlier this year for using a profanity in calling for President Trump’s impeachment.
But her economy policy also suggests a shift in the party. It has been decades since Democratic lawmakers pushed for programs that offer cash benefits to the working poor and the unemployed alike, said Joshua McCabe, an Endicott College professor who specializes in poverty issues.
“Democrats gave up for a while on trying something like this, but there’s a new wave of Democrats rediscovering this line of thinking,” McCabe said. “Generally, both Democrats and Republicans don’t like lumping in payments for the unemployed with payments for those who are working.”
Tlaib’s approach also marks a departure from the policy proposals of a number of leading Democrats running for president. Sen. Cory Booker (D-N.J.) has proposed the Stronger Way Act to expand the earned-income tax credit, where the benefits phase in. Former congressman John Delaney (D-Md.), another presidential hopeful, has also called for increasing the earned-income tax credit. Sen. Michael F. Bennet (D-Colo.) also proposed a large expansion of this tax credit but maintained the structure that offers smaller benefits to poorer Americans.
Some experts argued there are good reasons Democrats typically structure their plans this way. McCabe, the Endicott College professor, said working class voters traditionally reject federal welfare payments to able-bodied adults who could be employed.
“Historically, you get a backlash from the working class when you lump together ‘the working poor’ and ‘the welfare poor,’ ” McCabe said.
Leonard E. Burman, a tax expert at the nonpartisan Tax Policy Center, said the plan could run into political hurdles and warned that it would make the poor less likely to seek employment.
“It’ll discourage people from working who can work,” Burman said. “And, politically, there’s much more support for people who are trying to support themselves.”
But other economists celebrated Tlaib’s plan, saying Harris’s legislation would leave out too many of the most destitute Americans. Matt Bruenig, founder of the socialist think tank the People’s Policy Project, argued that it made little sense to tie federal subsidies to work for this group, given that they have other reasons for being out of the labor market. About 90 percent of people in poverty are children, elderly, disabled, students, caretakers or already working, according to federal statistics compiled by the People’s Policy Project.
H. Luke Shaefer, a poverty expert at the University of Michigan, said there is substantial data showing a large increase of families going without any cash income over the past 20 years. He said Congress should keep the earned-income tax credit as a work inducement and include a separate plan, like Tlaib’s, to help those who have fallen out of the labor market.
“The work incentive is good, but we should layer something on top of that so we’re not leaving out the poorest families. You can keep the work incentive and not cut people out who have fallen on extremely hard times,”
Shaefer said. About 2 million Americans have no gross income, according to the Internal Revenue Service, while another 10 million have between $1 and $5,000 in gross income.
A spokeswoman for Harris previously noted that the senator supports other plans to help the very poor, such as Medicare-for-all and expanded Social Security. A spokesman for Harris did not return a request for comment about Tlaib’s legislation.
Irwin Garfinkel, dean of the Columbia School of Social Work, argued that Tlaib’s proposal phases out too quickly and should be expanded to include every American, including those with higher earnings. He also said the plan should be amended to include a cash payment for children, citing the nation’s high rates of child poverty.
“Universality, or near universality, is an essential ingredient. This is much too targeted,” Garfinkel said.
Tlaib acknowledged that a true UBI plan would be bigger in scope. But she said the legislation was informed by her time volunteering at a Volunteer Income Tax Assistance program for the poor in Wayne County, Mich.
“$2,000, $3,000, $4,000 — that can really transform their lives,” Tlaib said. “I just want more people covered.”