Guaranteed income support increased during pandemic; backlash followed

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About 1,900 residents of Harris County, Texas, were set to receive a $500 monthly benefit starting this spring.

The money – provided through a new pilot project with a guaranteed income for 18 months, Exalt Harrisan initiative of the Harris County Public Health Department, targeted residents of 10 zip codes living 200% below the federal poverty line.

The program would provide money without strings attached, allowing families to decide for themselves how to use the funds to meet their needs.

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But before the first checks were sent out, Attorney General Ken Paxton said obtained a stay from the Texas Supreme Court, forcing the program to stop payments.

In a statement at the time of the suspension, Paxton called the program an “abuse of power and an improper use of taxpayer dollars.”

Paxton did not respond to CNBC's requests for comment.

The decision — which follows the successful implementation of other guaranteed income programs in Texas and other states — was “shocking and unfortunate,” said Harris County District Attorney Christian Menefee.

“It is highly unlikely that the region will continue with the program in its current form,” Menefee said.

As guaranteed income grows, so does the backlash

Guaranteed Income Programs cash payments designed to create an income threshold for specific members of a community, according to the Economic Security Project, an advocacy group. While universal basic income provides cash to everyone, guaranteed income can provide targeted or universal support.

The programs have flourished in recent years, helped by the Covid-19 pandemic, which raised awareness that immediate cash could address targeted needs.

While the federal government poured billions of dollars into stimulus checks and child support payments, state and local governments also began experimenting with ways to provide money to residents in need, often using additional federal funds made available through the American Rescue Plan Act.

The Economic Security Project is currently tracking 150 guaranteed income pilots in 35 states. About 52,000 people have participated in a pilot at some point in the past few years, said Harish Patel, vice president of the Economic Security Project.

Yet backlash against the programs have also gained momentum.

Individual protester holds a sign calling for universal basic income and universal health care in Columbus, Ohio on January 20, 2021.

Sopa Images | Lightrocket | Getty Images

Idaho, Iowa and South Dakota passed guaranteed income legislation this year, while Arkansas is set to do the same in 2023. Those efforts happened “very quickly,” and similar proposals are expected in another 25 states, Patel said.

The conservative think tank Foundation for Government Accountability and its lobbying arm Opportunity Solutions Project have led the effort. The organization declined to comment, but the foundation's research highlights the reasons for his oppositionIt argues that guaranteed income programs discourage work, “trap people into dependency” and cost taxpayers millions.

The bills are written in a “copycat style,” making them easier to copy across states, Patel said. Still, that structure It also leaves less room for a thorough analysis of their reach; the proposals are so broad that they could ultimately limit all financial assistance, not necessarily just guaranteed income programs, he said.

“Let's say there's a natural disaster and you want to spend money,” Patel said. “In some states, that may not be possible if these kinds of blanket policies that have been put in place become law.”

One-year experiment in Austin helped residents

Others who have researched the programs' effects say they see evidence that guaranteed income works.

In a one-year experiment launched in Austin, Texas, in 2022, 135 households received $1,000 per month. The program, which targeted high-poverty and rapidly gentrifying neighborhoods, helped improve housing and food security, early research from the Urban Institute shows.

The city of Austin has hired the Urban Institute to study the effects of the cash injections.

“We have a tremendous amount of evidence in this country that cash injections work,” said Mary Bogle, principal investigator on the Austin Guaranteed Income Pilot evaluation and a principal investigator at the Urban Institute.

Typically, participating workers have very low-wage jobs, Bogle explained. Once they have access to a guaranteed income, they can often figure out ways to increase their income, she said.

“People who make arguments about guaranteed income creating dependency don’t look at the fact that what guaranteed income actually does is allow participants to make good choices,” Bogle said. “They have freedom of choice.”

For 38-year-old Taniquewa Brewster, in Austin, qualifying for the city's guaranteed income program helped her escape a pattern of sporadic, unstable employment.

She discovered the program while she was still recovering from winter storm Uri in 2021, which left her apartment building without gas for months.

Brewster was also unable to work well at the time, as she found it nearly impossible to combine a full-time job with caring for her five children.

The extra money had immediate benefits. Brewster said she was able to pay for the sports, camps and after-school programs her children wanted to participate in. She also helped her sister with the cost of the car they shared.

Universal Basic Income Experiment Proves Successful in Stockton, California.

Although Austin’s guaranteed income has ended, Brewster said it has had a lasting impact on her life, especially because it helped kickstart her career. The money from the program helped her go to school and get more education.

She has become a certified leasing agent and now works for her apartment complex. She has also become a notary and is currently training to be a doula.

“That gave me the time and a buffer to say, OK… you don't have to put things off so you can make sure you can provide for your family,” Brewster said.

'The status quo is not working'

Many other participants in the guaranteed income program have seen life-changing improvements, particularly in their earning power, which is why the program’s proponents are surprised by the growing opposition.

“There is no real coherent vision of what they want to see other than the status quo,” he said Michael Tubbs, founder of Mayors for Guaranteed Income. “And the reason guaranteed income is so popular is because the status quo doesn't work for most people, Democrats and Republicans.”

According to Menefee, the district attorney, the Harris County program may have been targeted for political reasons.

Harris County Precinct 1 Commissioner Rodney Ellis answers a question from the press during a press conference following Texas Attorney General Ken Paxton's lawsuit challenging the Uplift Harris program on April 10 in Houston.

Houston Chronicle/Hearst Newspapers Via Getty Images | Hearst Newspapers | Getty Images

“If the Democrats were to expand their win in Harris County, we have the potential to change the entire state because we are such a densely populated county,” Menefee said.

According to Commissioner Rodney Ellis, Harris County's funds must be allocated by December and the federal money can instead be used for existing programs.

Ellis hopes that the guaranteed income program can be revamped to address the state's concerns, by increasing control over how the money is used and changing the random selection process used to choose participants.

According to Ellis, previously selected participants will likely have to re-apply.

The efforts to gut the Harris County program could be replicated to thwart other guaranteed income efforts elsewhere, he said. “I imagine other conservative advocates[s] “Generals across the country are looking at this and may do the same.”

Brewster, a participant in the Austin program, thinks that opponents of a guaranteed income might change their stance if they shared their income and resources with low-income people for just one month.

“Sometimes you just need a little boost, and most families needed that boost,” Brewster said.

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