In 1964, President Lyndon B. Johnson declared the “War on Poverty.” The next year, the percentage of Americans living under that label was 17.3. Today, depending on how it is measured, poverty stands at 14.3%, or with transfer payments taken into account, 6.5%(1). On the surface, those numbers appear to be a resounding mark of triumph in the war declared by John F. Kennedy’s successor, but when the numbers are broken down, the picture is far less commendable.
The total costs of the five programs, which include the Earned Income Tax Credit, Temporary Assistance for Needy Families, Supplemental Security Insurance, Supplemental Nutritional Assistance Program (previously referred to as food stamps), and housing assistance, equate to $212 billion (2). However, when the total income of all those living in poverty is added together and subtracted from the total of all those individuals who have a theoretical income that would place them above the poverty line, it would only take $175-$179 billion to close the gap (3). Astoundingly, it appears the United States of America is wasting $37 billion dollars and failing almost 21 million of its citizens through an ineffective bricolage of schemes. The solution, however, stands out to anyone willing to look hard enough: a guaranteed income for those living in poverty.
The concept of a guaranteed income can trace its roots back to the ideas of Thomas Paine, who advocated for a levy on land to provide for those unable to own any themselves. Similar proposals have been floated at various times and from all across the political spectrum. In fact, in the US presidential election of 1972 both candidates, Richard Nixon and George McGovern, advocated for a form of basic income. Unfortunately, President Nixon’s proposal was fraught with opposition from all sides and was shot down by congress.
The sticking points to a basic income are the same as those faced by other wealth-transfer schemes. First, how to phase it out so that work is not disincentivized. Second, who should be eligible for the benefits. And third, how much those who are eligible should receive. To begin, your correspondent must make an admission, it is likely that the proposal I will be putting forth, along with any and all forms of wealth-transfer, will discourage work to a certain degree. However, this should not stop us from designing a program that will lessen that reality.
At this moment, even with all of the various wealth transfer schemes financed by American taxpayers, a disturbingly high number of people live in poverty. This could be alleviated with a streamlined process that focuses only on those living in poverty instead of those who reside above it. This isn't to say that those who live close to that threshold don't face challenges, but our priority should be to make sure all people have the ability to live an adequate life, without the worry of ever living in poverty. For this reason, your correspondent’s proposal is rather simple, give individuals and/or families an unconditional grant that brings them above the poverty line.
Unlike the various other welfare programs the United States promulgates, this one would come with no strings attached. The poor would no longer be treated as young children unable to manage their own money; instead, they would be treated with dignity and be afforded the opportunity to balance their own finances required when they are able to support themselves.
Most importantly, though, unlike other programs where marginal tax rates are high and benefits are lost almost immediately upon employment, benefits would be locked in for three years. Why three? Because the average person is in poverty for 2.8(3). After this time, any changes in income would be noted and the amount granted by the government would be altered depending on where one fell in accordance with the poverty line. This approach would be fundamentally different than the current ones that phase out rapidly as income levels rise. Instead of inherently discouraging people from seeking employment, this program would allow people to keep getting benefits even after they get a job, providing them with security as they transition into the workforce.
Along with saving money and eliminating poverty, this could finally bridge the division between the right and the left. In the past, welfare reform has been fraught with issues. On the right, we’ve had budget hawks who see the budget deficits produced year after year as a threat to America. On the left, we have been those whose priority has been social welfare, regardless of long-term fiscal consequences. A program of this nature would bridge that gap and provide the support to those who live impoverished lives, while getting our fiscal house in order. Instead of having to choose between condemning people to poverty, and forcing future generations to pick up a potentially devastating fiscal tab, let's reform welfare and create a program that solves our needs now, and the needs of our progeny. Let's institute a basic income for the poor.
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1. Jacobson, Louise. "Bill O'Reilly Says Poverty Hasn't Budged since 1965 despite 'trillions' Spent." Politifact. Tampa Bay Times, 29 July 2011. Web. 01 Apr. 2017.
2. Konczal, Mike. "No, We Don't Spend $1 Trillion on Welfare Each Year." The Washington Post. WP Company, 12 Jan. 2014. Web. 01 Apr. 2017.
3. Bureau, US Census. "Poverty Status: POV-28." United States Census Bureau. U.S. Department of Commerce, 12 Sept. 2016. Web. 01 Apr. 2017.
4. Stevens, Ann Huff. "Transitions into & out of Poverty in the United States - UC Davis Center for Poverty Research." Center for Poverty Research. University of California, Davis, n.d. Web. 01 Apr. 2017.