Governments Across the U.S. Are Handing Residents Cash—No Strings Attached
Dozens of guaranteed-income programs have popped up in cities and counties, and Republicans are trying to block them.
HOUSTON—Bobbie Hines has been living in her modest home in southeast Houston for 56 years. But these days, she’s struggling more than ever to afford groceries and pay for mounting medical expenses.
“Everything is so expensive," said Hines, 83 years old, a retired crossing guard. “It’s an everyday struggle." Her Social Security benefits barely cover her bills, and she has started rationing bacon slices to save money. Earlier this month, her husband, Alfred, 85, died following a lengthy struggle with liver cancer. He was bedridden and on oxygen in their living room, and Hines spent nearly two years taking care of him.
When Hines saw a local news report about a pilot program offering $500 monthly payments to low-income residents, she thought it was a hoax. But after consulting with her family, she decided to apply. She says the extra money would change her life.
Hines is one of more than 80,000 residents of Harris County, the third most populous county in the U.S., who have applied. The program, which is set to start this spring, has roughly 1,900 spots.
Houston is joining dozens of American cities and counties—most led by Democrats—that are experimenting with guaranteed-income programs amid growing wealth inequality in the U.S. The programs are part of a trend at the local and national level toward providing direct, largely unconditional payments to Americans for everything from pandemic relief to child assistance. They reflect a growing sentiment among economists, tech industry leaders and Democrats that distributing money without strings is one of the most effective and least bureaucratic ways to help struggling Americans.
Other cities that have experimented with guaranteed-income programs include Stockton, Calif., Birmingham, Ala., Louisville, Ky., and Nashville, Tenn.
The efforts are facing resistance from Republicans, who have called for tighter restrictions on who gets the money and how it can be used, with some expressing philosophical opposition to what they see as an unchecked handout. In private, senior Republicans have fretted about the potential political benefits Democrats might reap from the programs, a tacit acknowledgment of their popularity.
In Houston, a Republican state senator has asked Texas Attorney General Ken Paxton, also a Republican, to declare the Harris County guaranteed-income program unconstitutional. If the effort succeeds, it could offer Republicans a template for blocking similar programs in other parts of the country. Already, GOP officials in Arkansas, Arizona, Iowa and Wisconsin have moved to ban or restrict the programs in their states.
While guaranteed-income programs haven’t gained traction on the federal level, Washington is increasingly open to policies that offer Americans direct payments. On Capitol Hill, senators are weighing legislation that would increase the child tax credit for low-income families, while reviving expired breaks for businesses. House lawmakers passed the bill with bipartisan support early this year, but it has stalled in the Senate, amid concerns about the child tax credit provisions from some Republicans.
If approved, the expanded child tax credit would provide a payment of up to $1,800 per child for 2023, a modified version of an enhanced credit backed by Democrats in 2021 that reduced child poverty.
Policymakers’ views of direct payment programs have changed over the last half-century. In 1969, President Richard Nixon, a Republican, proposed a welfare plan that would have provided cash payments to no- or low-income families, though the program didn’t win congressional approval. From the late 1960s to the early 1980s, several U.S. cities and states experimented with so-called negative income taxes, a concept championed by economist Milton Friedman in which households that earn below a certain income threshold are given money from the government in lieu of paying taxes.
But the notion of a guaranteed income lost favor in the late 1970s, with Republican presidential candidate Ronald Reagan alleging on the campaign trail that welfare recipients were bilking the system. In the following decades, politicians of both parties, including Democratic President Bill Clinton, pushed for tighter restrictions on welfare programs.
In recent years, guaranteed income has seen a resurgence, backed by wealthy philanthropists and tech industry figures such as Facebook co-founder Chris Hughes, who have funded nonprofit groups that advocate for the idea and set up pilot programs. Tech entrepreneur Andrew Yang, a 2020 Democratic presidential candidate, made a universal basic income of $1,000 a month the centerpiece of his campaign.
The Covid-19 pandemic drove the issue to prominence. Lawmakers of both parties approved trillions of dollars in spending to cushion the economic effects of the crisis. Three coronavirus-response bills approved by Congress in 2020 and 2021 included $931 billion in direct payments to Americans, according to the Government Accountability Office.
Donald Trump was keenly aware of the political power of giving people money during his time in the White House, according to people who worked with him. He successfully pushed to have his name appear on stimulus checks, and told his advisers that he thought it would boost his chances of re-election, the people said, despite opposition to the effort from outside conservatives and some in his administration.
As he campaigns for president again, Trump has proposed providing direct cash payments dubbed “baby bonuses" to new parents to increase the fertility rate.
Academics have spent years studying how people spend money from direct payments programs, both in the U.S. and abroad. An analysis of dozens of U.S.-based guaranteed- income pilot programs by Stanford University’s Basic Income Lab found that participants spent most of the money on groceries and retail sales, which includes shopping at big box stores such as Walmart. About 3% of the participants’ expenditures were used for travel, leisure and entertainment.
“The evidence is overwhelming. People don’t spend it on vice," said Sean Kline, the group’s director. “They spend it on necessities."
Harris County Commissioner Rodney Ellis, a Democrat, who is leading the county’s guaranteed-income program, anticipates that most people will use the monthly $500 payments for child care, housing and food. But he allowed for the possibility that a small number of recipients could spend the money on nonessential purchases. “Is anybody going to get me to say, ‘Nobody is going to be a jackass?’ No. I’m in Texas. Somebody will be a jackass," he said.
Roughly 750,000 people in Harris County, more than 15% of the total population, are living in poverty, according to U.S. census data, including more than one in five children. Nearly 225,000 Harris County residents received food stamps in 2022, the most recent year for which comprehensive data is available.
“This is about empowering people to make decisions for themselves about how to better their lives," said Ellis, adding that the direct payments “give people the ability to control their own destiny."
Ellis is using $20.5 million from the 2021 coronavirus relief law to fund the program, which will last for 18 months. The county has hired outside groups to administer the program and evaluate its success.
Texas state Sen. Paul Bettencourt, a Republican, argues that Ellis doesn’t have the authority to enact a guaranteed-income program without approval from the state. He also contends that the program violates the Texas constitution’s gift provisions.
“It’s wide-open, no-strings-attached lottery socialism," Bettencourt said. In late January, Bettencourt asked Paxton to issue a legal opinion on the program’s constitutionality, which could lead to it being overturned. It’s unclear when Paxton’s office will make a determination.
Ellis dismissed Bettencourt’s criticism and signaled he was bracing for a prolonged fight. “I’m prepared to take it all the way to the Texas Supreme Court," Ellis said.
Jeannie Cheeks, 69, applied for the Harris County guaranteed-income program after hearing people talking about it on a city bus. She has never been married, has no children, and she is out of work following a recent back injury.
Cheeks says the cost of groceries is unmanageable. She recently called her utility companies in a bid to negotiate lower bills. “It’s a very, very difficult time," she said. “I live alone, I don’t have transportation or anything like that. Things have been pretty tough."
If she is accepted into the program, Cheeks said she would spend the monthly payments on food, bills and insurance: “I would definitely do the right thing."
Write to Andrew Restuccia at andrew.restuccia@wsj.com
