Should the Government Provide Americans a Minimum Income?

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WSJ Your Money Briefing 6 min 2 speakers 7 chapters transcribed 2 months ago
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What is the main topic discussed in this episode?

J.R. Whelan 0:05
Here's your money briefing. I'm J.R. Whelan at The Wall Street Journal in New York. Should the government provide a minimum income for all Americans? It's become an issue on the 2020 presidential campaign. Here's Wall Street Journal reporter Jake Schlesinger.

What is Andrew Yang's 'freedom dividend' or universal basic income proposal?

Jake Schlesinger 0:19
Everybody gets a guaranteed income of a minimum amount from the United States government. No strings attached. whether you're the poorest American or whether you're Bill Gates.
J.R. Whelan 0:28
He'll explain the proposal put forth by presidential candidate Andrew Yang and whether other candidates in the field support a government-provided basic income.

How much would Yang's $1,000 monthly payment provide and who would receive it?

J.R. Whelan 0:36
That's next.
J.R. Whelan 0:45
Democratic presidential candidate Andrew Yang's campaign has gained traction with his proposal to give a $1,000 monthly payment to all Americans, regardless of their income. He calls it a freedom dividend, but it's more commonly known as universal basic income, which hasn't received serious attention in several decades. And Wall Street Journal reporter Jake Schlesinger joins us from our Washington bureau. to explain.

How does a universal basic income differ from targeted or means-tested guaranteed income plans?

J.R. Whelan 1:08
So, Jake, let's start with, can you just explain what universal basic income is?
Jake Schlesinger 1:14
Sure. Everybody gets a guaranteed income of a minimum amount from the United States government. In the format that Andrew Yang has put it forth, everyone gets a check, every adult American gets a check for $1,000 a month or $12,000 a year, no strings attached. whether you're the poorest American or whether you're Bill Gates.
J.R. Whelan 1:32
But some of the other Democratic presidential candidates, they've indicated support for basic income but not universal. What's the difference?
Jake Schlesinger 1:40
First, I should make clear it is true that no other Democratic presidential candidate or any party leader has endorsed Andrew Yang's vision of a universal basic income. But there is support in different ways for some variations on what might be called a basic income or a guaranteed minimum income.

Which 2020 candidates and politicians support non‑universal basic income alternatives?

Jake Schlesinger 1:58
The main difference is the question of universal, as in a basic income means that there's a kind of floor where all Americans would get some kind of assurance of a cash payment of some kind every year. But it's not universal. Those kind of proposals usually phase out as income goes up. Usually, you know, they would go more toward poor people or lower middle class people.
J.R. Whelan 2:19
Now, in response to Democratic support for basic income or universal basic income in order to support families, the Trump campaign says it's done plenty for working families.

How do child tax credit reforms compare to basic income proposals?

Jake Schlesinger 2:30
Right. So the core in some ways of the President Trump's reelection campaign in 2020 is that he has done a great job for the economy, that running an economy with an unemployment rate of three and a half percent, you're starting to see decent wage gains even among and particularly among lower income workers. And that that is the way to help lower-income and middle-income families, which is to run a hot economy with low unemployment and not to have the government more actively involved.
J.R. Whelan 2:59
But there are some Republicans who have signaled support for some form of basic income.
Jake Schlesinger 3:04
They wouldn't necessarily call it a basic income, but I think there is support that in some circumstances the government ought to be channeling money to some families without attaching strings.

What are the political arguments for and against tying government aid to work requirements?

Jake Schlesinger 3:15
The most specific example of that is revolving around the child tax credit. And Mitt Romney, the Republican senator from Utah, the 2012 Republican senator, A presidential nominee teamed up with Michael Bennett, a 2020 Democratic candidate senator from Colorado, to propose a new form of a child tax credit. And what was important about that child tax credit is that a portion of it would be made available to all families, no strings attached. That's a contrast with the current law in which a child tax credit does have strings attached, some requirements for working, some requirements for earning a certain amount in the private sector. And what in some ways is a real breakthrough in a concept in the Romney-Bennett proposal is that you would be able for the first time to get a child tax credit if you have children at home, whether you're working or not.

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