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Category: THE SOCIAL DEBATE

  • B.C. women demanding guaranteed basic income for Canadians

    By: Michael Williams

    See original post here.

    Women throughout B.C. are putting up banners across 13 different locations in the province, demanding Guaranteed Basic Income for everyone in Canada.

    The province-wide action is put on by BC Women’s Alliance on Sunday. One volunteer, Jacqueline Gullion explains it is calling on MPs from B.C. constituencies to support two bills that are currently being debated at the Senate and house of commons.

    “The two bills and in fact, our campaign, are all kind of aligned on some of the same principles … One is at the Canadian parliament and one is Senate. Both of those bills are calling for the development of a national framework for guaranteed basic income. And that framework should be developed in consultation with reps from the provincial governments. So that would entitle everyone in Canada to have access to a basic livable income,” she told CityNews.

    While the campaign initially started because of the concern for women impacted throughout the pandemic, “We settled on a campaign for guaranteed livable income as the most valuable thing we could pursue for women.”

    However, Gullion emphasizes a guaranteed livable income would benefit everyone.

    “There’s a lot of different philosophies on how the implementation should go. What our group thinks is most valuable is that it should be available to anyone, and it should not be contingent on work. So it would be most useful for people who cannot work, cannot get adequate paid work, cannot get full-time work. But our philosophy is it should not be dependent on the pursuit of, or look for work.”

    Gullion says the parliamentary budget office – a branch of the feds said the country could afford a basic income without any new taxes or increase in taxes.
    British Columbians will see banners in Kelowna, Chase, Nelson, Langley, and Prince George to name a few.

    The post B.C. women demanding guaranteed basic income for Canadians appeared first on Basic Income Today.

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  • Congress Can More Modestly Expand The Child Tax Credit And Still Help Very Low-Income Families

    By: Elaine Maag

    Original post can be seen here.

    As President Biden and congressional Democrats make another push to reach a compromise on a social spending, climate change, and tax bill, a key issue is what they’ll do with the Child Tax Credit (CTC). The Tax Policy Center analyzed five options that show how lawmakers could partially restore the expanded 2021 version of the CTC.

    In in his State of the Union address, President Biden reiterated his support for restoring the CTC that Congress expanded in the 2021 American Rescue Plan Act (AR AR +6.8%P), but did not propose a specific plan.

    The expanded program that kept a whopping 3.7 million children out of poverty before it expired last December remains in limbo. One path forward: Congress could trim any proposed expansion in a way that still protects the lowest income families who have been hit hardest by inflation.

    ARP changed the CTC in three key ways: It increased the maximum credit from up to $2,000 per child to $3,000 per child ages 6 to 17 and $3,600 for children under age 6. It raised the maximum age of eligibility to 17 from 16. And it made the credit fully refundable.

    Previously, low-income families needed to earn at least $2,500 to qualify for the credit and after that, it increased with earnings. Families could only receive up to $1,400 of the credit as a tax refund. But ARP allowed low-income families to claim the full credit as a tax refund—the single most important way the law reduced poverty, as noted by our colleagues.

    If Congress simply restored the ARP version (option 1 in the figure below), all but the highest income families would receive a higher credit than they do today. The lowest income households would get the biggest increase.

    Alternatively, Congress could choose to keep just ARP’s full refundability (option 2). That would deliver an average new benefit of about $1,200 to families with children in the lowest one-fifth of the income distribution. That’s much less than the over $3,300 average new benefit if the higher credit amounts were also in place – but almost all the benefits would go to the lowest income families.

    If Congress wanted a lower-cost expansion of the CTC, it could phase the credit out more quickly than the ARP did.

    We studied several ways to do that. For example, increasing the credit to ARP amounts, restoring full refundability, and phasing the credit out more quickly (option 3), would be less generous for higher income families but still provide substantial additional assistance for most other households.

    In all the options we modeled, the lowest income families would receive the largest increase in benefits.

    That’s because these options don’t limit the credit for the lowest income families like the current credit does now that the ARP has expired.

    New research shows the expanded monthly credits families received last year did little to discourage work but did improve nutrition, decreased reliance on high-risk financial services such as credit cards, and helped low-income parents and children save for college.

    ARP’s CTC expansion showed tax policy can be a powerful tool to stabilize low-income families with children. And continuing the most novel of those expansions, making the credit fully refundable, is critical to continuing to help these families.

    The post Congress Can More Modestly Expand The Child Tax Credit And Still Help Very Low-Income Families appeared first on Basic Income Today.

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  • Opinion: Don’t ‘Means Test’ the Child Tax Credit

    “Means tests” restrict the availability of public assistance based on income, by making people “prove” they’re poor enough to deserve help.

    By: REV. DR. LIZ THEOHARIS, REV. DR. WILLIAM BARBER II, SHAILLY GUPTA BARNES

    Original post can be seen here.

    Decades ago, Dr. Martin Luther King Jr. warned about the deceptions or “clever sophistries” of politicians. “We must be as armed with knowledge as they are,” he counseled.

    That’s good advice today, as lawmakers scramble to revive the Child Tax Credit that was killed by Sen. Joe Manchin, Democrat of West Virginia, along with the rest of President Joe Biden’s Build Back Better plan. Manchin and others are now engaged in the exact kind of sophistries that King warned about.

    Under last year’s American Rescue Plan, lawmakers increased the Child Tax Credit received by parents, expanded eligibility to include nearly everyone but the very wealthy. It also paid families monthly instead of annually, with payments of up to $300 per child, per month. 

    The effects were astounding. 

    The families of 61 million children received the benefit. It lifted millions of children above the poverty line, as parents put this money toward basic needs including food, clothing, water, heat, housing and electricity. It also reduced racial inequities, with poor Black and Latinx households benefiting the most. 

    That credit expired in December 2021, after Manchin announced on Fox News that he wouldn’t vote for Build Back Better, leaving Democrats one Senate vote short. He now says he’ll only support renewing it if he can fundamentally change what worked about it in 2021. 

    Manchin, for instance, now insists on using “means testing and work requirements” to limit the credit.

    “Means tests” restrict the availability of public assistance based on income, by making people “prove” they’re poor enough to deserve help. These often burdensome requirements already limit access to Medicaid, food stamps, public housing and more.

    Many means tests are established using the official poverty line, which is far too low. As a result, the tests underestimate who needs these programs, and how much they need. 

    Before the SNAP (food stamp) program was expanded during the pandemic, more than 90% of the 42 million people receiving food stamps weren’t getting enough to have a healthy diet.

    Likewise, before Medicaid expansion under the Affordable Care Act, millions of people who needed it were excluded. After the ACA raised the eligibility threshold, Medicaid enrollment increased by one-third in states that expanded the program. 

    These restrictions are rooted in the mistaken belief that people are poor due to their own failings, a bias that relies on offensive stereotypes.

    Another 10 million people enrolled during the pandemic. Medicaid now covers more than 70 million people — evidence of how many people had to go without health care because of restrictive means testing.

    These restrictions are rooted in the mistaken belief that people are poor due to their own failings, a bias that relies on offensive stereotypes. Manchin, for example, told colleagues that parents would use their Child Tax Credit payments on drugs — an absurd slander that’s completely at odds with the data.

    Tired old stereotypes like these come straight out of the 1990s, when new welfare restrictions signed by President Clinton caused welfare rolls to drop from more than 12 million to just more than 5 million in five short years. 

    But with 140 million Americans still poor or low-income today, it’s plain that “welfare reform” didn’t reduce poverty or economic insecurity. It only prevented poor people from getting help.

    Manchin has also raised concerns about the credit’s $20 billion cost. But he had no trouble voting to give the Pentagon a shocking $778 billion ($25 billion more than it asked for), a peacetime record.

    We see through these clever sophistries. And we’re organizing a Mass Poor People’s and Low Wage Workers’ Assembly and March on Washington on June 18, 2022 to oppose them. As King advised, we’re armed with knowledge and we know what’s possible. 

    Anything less than everything we need isn’t enough.

    The post Opinion: Don’t ‘Means Test’ the Child Tax Credit appeared first on Basic Income Today.

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  • Opinion: The government would rather people starve or be homeless than create new money

    By: Richard Murphy

    See original post here.

    The problem for the government in the developing economic crisis is it doesn’t want to take on more debt. But no recession can be solved without the government doing just that. So what is the trade-off? Should it balance its books or ensure people are fed and warm? A thread…

    The problem is that due to external pressures the government can’t stop the prices of oil and gas and so road fuel and domestic energy and almost all food from rising. Wages are not rising though, and the government does not want them to. So, 5 million or more people face poverty.

    These people have no financial margin for error left. They have no savings. Their incomes from wages or benefits are not rising to cover costs. They have too little discretionary spending to cut to cover the cost increase of necessities. Most have rent or mortgages to pay.

    These households have only a few bad choices available in that case. They could borrow, but have very limited access to sufficient or affordable credit and limited capacity to repay. Alternatively they could go into mortgage or rent arrears, and so risk losing their homes.

    Or they can choose between heating their homes and cooking food, and food itself. As the recession deepens and more and more lose their jobs as discretionary spending falls the number facing these stark choices about poverty will only grow, and maybe by millions.

    In a country where there is enough food for all and every house could be kept warm with sufficient fuel for everyone to cook that this situation even exists is an indication of policy failure. We should not be in this position now. But we are.

    In the face of this crisis the government is now saying that it will not take on any more debt. The consequence is that it is not planning to spend any more to help those in need. One thing follows from the other. It is disguising that by saying it is looking for ‘non-fiscal solutions’.

    There are no ‘non-fiscal solutions’ for a debt crisis that will drive millions of households into poverty, unless starvation is described as such. Presuming that the government is not seeking that outcome (and that is a big assumption) it has no choice as to what to do.

    When money is the answer to this problem and households have none, and the private sector will not provide the affected with more or affordable loans, then only the government can solve this problem by making the necessary cash available.

    It’s not rocket science to say this. Money is either generated by creating new economic surpluses. Or it is reallocated to those who need it through new taxes. Or it is created by private sector lending. Or the government has to create it. Those are the only options available.

    In a recession there are no new surpluses to be made. The government is refusing windfall taxes, and they are in any case too small in size and too slow in impact to solve any problem now. The private sector is not going to lend to impoverished people. So the government must act.

    The reality is that, as this analysis shows, the choice is simply between people going hungry, or cold, or losing their homes, or the government creating the money required to ensure people are not forced into poverty on a scale we have not witnessed for nearly a century.

    And the government can create this money. More than £400 billion was created to tackle Covid, which meant not a penny of the cost of that crisis was paid for by borrowing or taxpayers. It was all paid for with newly created money.

    Where is that money now? In the government’s accounts it’s represented by new deposits held by the commercial banks with the Bank of England. That’s it. It is just new money. And why is it with the Bank of England? This needs explanation.

    Remember that the Bank of England paid this new money to the commercial banks on behalf of the government in exchange for the promise the commercial banks made to pay it on to those it was due to. That’s how payment from the government to people works.

    Tax and government borrowing, incidentally, works the other way round. In that case people ask the commercial banks to pay the government, and it flows from those banks to the Bank of England. This is how money moves in and out of the government.

    But why does the money end up still being deposited with the Bank of England by the commercial banks in that case? That’s because most new money does not leave the commercial banking system. After all, when we’re paid it’s only if we take out cash that the money leaves a bank.

    Most of us are not paid in cash. And even if we are and we then spend cash whoever gets it pays it back into a bank. Just as if we pay someone by bank or card payment all we actually do is move money between bank accounts.

    That’s how banking works: it’s just an accounting system in which money is just a record of debt owing to and from people recorded on bank statements.  Money is no more complicated than that.

    So, when the government creates new money what it actually does is pay money into the banking system as a whole. Which bank has it may change. And who they use it to pay money too can change. But the new money simply puts more money into banks, which they then hold with the Bank.

    Why would a bank hold the money with the Bank of England? Because a) it’s the safest place to hold it and b) the accounts on which they hold it are also the accounts that banks also use to pay each other: the Bank of England is the bankers’ bank. That’s why it’s a central bank.

    And how much do these extra deposits that the Bank of England created for the government cost a year? At present the total for the £400 billion or so that Covid cost is about £3 billion a year paid in interest on these deposit accounts, from which our commercial banks benefit.

    £3 billion a year might seem a lot, but in government terms it’s less than one two hundredth of total tax receipts, which makes it small change.

    I think that for maybe £50 billion or so a year – and maybe less – would keep British households out of debt now. The borrowing cost on that will be less than £0.5 billion right now. That would be the cost of injecting the money needed to keep the country out of poverty right now.

    The government won’t do this because it says it will not take on debt. But all the new debt it would take on is actually just new money that never need be repaid because right now our economy will need that money to function.

    There’s good reason for saying that. Usually our money is created by both the government and commercial banks. But in recessions banks lend less, meaning they create less new money. So the government has to create more money if there’s to be enough money to keep the economy going.

    In that case this debt does not need to be repaid. Nor is there a burden on future generations, unless you happen to think that the money we use is a burden that future generations will not want (about which I think you will find they disagree: they’ll be happy to take it).

    So what the government is saying when it says it will not help people with the debt crisis they’re facing is that although it could create all the money required to solve this problem it just does not want to do so, although it could by creating all the money required to do so.

    To put that another way, instead of creating the new money that people need to stay warm, fed and in their homes the government would prefer people starve, go cold, and be evicted from their homes.

    And making this new money is really easy. It just requires a few keystrokes on a Bank of England keyboard and the job would be done. That’s how all the money to pay for QE was created. That’s how the poverty that this recession could create could be addressed as well.

    So, when this morning the government says that it is looking for every solution to this crisis except for anything that involves them spending more money they’re lying, because they know the only solution is for them to create that new money or for people to be ruined.

    And the Opposition has to note this too. There is no windfall tax solution to this crisis, although such a tax would help. And more taxes on wealth would definitely help tackle the inflation we’ve got.

    But it is more money that the government needs to spend. And only the government can create it. If they’re to really provide an alternative solution to this problem Labour and the SNP have to say that. If they do it would help. If they don’t, we really are in very deep trouble.

    In summary: for the sake of debt paranoia millions of people might suffer, wholly unnecessarily.

    The post Opinion: The government would rather people starve or be homeless than create new money appeared first on Basic Income Today.

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  • States that cut their pandemic unemployment checks early saw virtually no impact on hiring.

    There is strong evidence suggesting that stopping the checks basically caused nothing but avoidable harm according to a new report by the Federal Reserve Bank of San Francisco.

    By: Greg Iacurci

    See original post here.

    _____________________________________

    Key points:

    • About half of states cut federal unemployment benefits in June or July 2021, a few months ahead of their scheduled expiration.
    • State officials thought pulling funds would help ease the challenges employers were facing in hiring workers.
    • But a paper by the Federal Reserve Bank of San Francisco found that policy didn’t seem to have its intended effect on employment.

    ______________________________________

    State cuts to pandemic unemployment benefits last summer had a small impact on hiring, suggesting enhanced funding for the unemployed didn’t play a big role in labor shortages, according to a recent report.

    The federal government greatly expanded the social safety net for the jobless in March 2020. It offered hundreds of dollars in additional weekly benefits to individuals and gave aid to millions of previously ineligible people, like gig workers and the self-employed.    

    Governors of roughly half the states, most of them Republican, withdrew federal benefits in June or July 2021 — a few months before their scheduled expiration nationwide on Sept. 6.

    The debate at the time centered on what was seen as the likelihood that the benefit boost was contributing to employers’ hiring challenges.

    Some officials believed federal assistance kept people from looking for work, while others argued that factors like ongoing pandemic health risks and family-care duties (kids home from school, for example) played a bigger role in the job crunch.

    But an analysis by researchers at the Federal Reserve Bank of San Francisco found states that withdrew benefits early didn’t experience the intended effect of spurring a big increase in jobs. It compared hiring rates from July to September 2021 in the states that ended benefits with those that kept them intact.

    Hiring picked up a minuscule 0.2 percentage point in the “cutoff” states compared to the benefit-keeping states — a “quite small” increase considering states’ average monthly hiring rates of about 4%-5%, according to the analysis.

    Put differently, if a state that maintained federal benefits had a 4.5% hiring rate, a state that cut them would have had a 4.7% rate.  

    “That would be pretty much imperceptible,” said Robert Valletta, senior vice president and associate director of research at the Federal Reserve Bank of San Francisco, who co-authored the analysis.

    The hiring rate measures the number of hires during a month relative to overall employment; it serves as a “natural starting point” to assess the policy impact, the analysis said.

    Earlier research into the effects of pandemic unemployment benefits have largely had similar findings.

    One study in August 2021 also found little impact on jobs and suggested an early withdrawal of benefits might harm state economies.

    Other studies have examined a $600 weekly enhancement offered from March to July 2020 and found the extra benefit didn’t prove to be a big disincentive on returning to work.

    Some research does conflict with this assessment, however. For example, a paper from December found a large uptick in employment among “prime age” unemployed workers (ages 25 to 54) in states that opted out of federal benefit programs in June.

    Varying results boil down to different economic data sets that researchers have used to examine the dynamic, according to Valletta.

    One caveat to the San Francisco Fed’s report is that it doesn’t account for different labor market conditions in the “cutoff” states versus those that maintained federal benefits.

    For example, a small hiring impact in cutoff states might have been partly attributable to labor markets that had already rebounded to a greater degree than comparable non-cutoff states. In that case, there might have been less of a chance of a hiring boom.

    “It’s important to keep in mind that some meaningful fraction of people suffered real hardship.”

    Robert Valletta; Sr. VP & Associate Director of Research at the Federal Reserve Bank of San Francisco

    Valletta and his colleagues have studied this point in preliminary follow-up work, he said. So far, they’ve also found subdued hiring rates in the states that lost federal benefits in early September — suggesting the elimination of benefits didn’t cause a big pickup in hiring regardless of the relative labor market conditions, he said.

    However, Valletta and the co-authors go on to note that their findings seem to indicate that while hiring didn’t surge, the early benefit cutoff didn’t harm the states’ labor markets.

    “But it’s important to keep in mind that some meaningful fraction of people suffered real hardship as a result,” Valletta said.

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  • A land value dividend deserves far more attention

    In 2020 and 2021, government spending rose by almost £400 billion, covering policies from furlough to free school meals. This spending dominated the national conversation, but as many of those programs wound down and inflation began to rise, the focus inevitably shifted to taxes.

    By: Nikhil Woodruff.

    Original post can be found here.

    At the Autumn and Spring Budgets of 2021, the Chancellor announced a series of tax raises amounting to around 2% of GDP, mainly from increases to Income Tax and National Insurance. These have had a mixed reception: described simultaneously as progressive and regressive. There is, however, one thing economists might agree on: raising taxes on income will reduce economic growth. For example, the Office for Budget Responsibility estimates that the behavioural response to the NI rise will eliminate 23% of its theoretical revenue.

    Taxing labour income reduces labour supply, and this notion applies to many other tax bases, too: profit, property, or even carbon emissions. But one type of thing escapes it, and by doing so has become the favourite among economists: land. In the words of the OECD, “the reviewed evidence and the empirical work suggests recurrent taxes on immovable property being the least distortive tax”.

    This raises two questions: what actually is land, and why should we tax it?

    Land, defined

    These questions were of particular importance to Henry George, the influential American political economist of the 19th century. His most famous work, Progress and Poverty, sought to explain why poverty continues to exist in times of technological advancement, proposing that the answer lies in the rents demanded by owners of natural resources which increase in value. Land, under this definition, encompassess everything not man-made. For property owners, the land you own is the ground underneath your house.

    It’s important to distinguish between land area (the physical area covered by a plot of land) and land value (its fair market price). A tax on land refers to the latter, a tax on its value. But where does the value of land come from? Why is an acre of land worth 100 times more in the City of London than in Broxtowe? George posits that this gain comes from the development and productivity surrounding the land, none of which were contributed by the owner. The owner of the land, however, profits when the land value increases. If they are a landlord, they can charge higher rent; if they are their own tenant, they benefit from the improved location value of their residence (and they capture this financially when they sell). According to George, this unearned nature of land values justifies a land value tax, equal to the annual profit of the landowner (the “rent”).

    A land dividend in the UK

    The UK’s total land value exceeds £6 trillion, and thus a land value tax of 1% would raise over £60bn annually. Returning this revenue to UK residents as an £18 per week dividend ensures budget neutrality; this is sometimes called a land dividend. My nonprofit, PolicyEngine, has built an app to compute the impact of tax and benefit reforms such as land dividends. The PolicyEngine app estimates that this 1% land dividend would cut poverty by 18% and benefit two thirds of the population. It would also be highly progressive: the bottom income decile sees its income increase by over 7%, while the upper decile would lose 2%.

    How a 1% land dividend affects net income held by each income decile

    But not everyone comes out ahead, even in the lowest income deciles: at least 17% of every income decile loses more in taxes than they gain from the dividend.

    The distribution of outcome categories by income decile for a 1% land dividend

    The households who lose out are often senior citizens, many of whom are low-income but asset-rich. Under our estimates, while child poverty falls by 34% and working-age poverty falls by 16%, the poverty rate for pensioners would increase by 13%.

    Projected changes to official poverty rates by age group with a 1% land dividend

    These results present a less-than-perfect outcome: substantial reductions in poverty, but losses among low-income pensioners. But how “progressive” or “regressive” a policy looks depends on how you define “rich” or “poor”. Usually, we order households by their disposable income after taxes and benefits, adjusted for household size: this leads to large percentage losses for low-income (but high-wealth) households, typically comprising retired individuals. But when we order households by their total wealth, we get a different picture, one in which land value taxes are highly progressive: 

    How a 1% land value tax affects net income held by each wealth decile

    This applies to the distributions of outcomes within deciles, too: while 17% of the first income decile (and more in higher deciles) lose out from the land dividend, all households in the first three wealth deciles see their net income rise.

    There are other issues at play here which the modelling doesn’t answer: how would households and firms change their behaviour in response? Would pensioners in reality avoid poverty by renting out their high-value homes rather than choosing to consume their own housing supply?

    Our analysis here is static, only considering immediate effects on the UK by simulating the taxes and benefits each household would pay, before and after (all our modelling is open-source, meaning anyone can see our full working, or tweak our assumptions and parameters). Macroeconomic models might reveal the long-term effects of land value taxes: for example, any positive effects on economic growth by replacing taxes on labour with taxes on land.

    These are all important questions, and the evidence base on land taxes will continue to grow, suggesting high revenues and progressive outcomes where that revenue is used effectively. But regardless of the details of that progressivity, land value’s unique properties of a vast, largely untapped source of funds, and the economic efficiency of taxing it, should earn it a far larger share of modern public discourse around taxation.

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  • 60+ Behavioral Scientists Urge U.S. Congress to Extend Child Tax Credit

    See original post here.

    The attached letter, signed by over 60 behavioral scientists from institutions around the country, was sent by the ideas42 Policy Lab today to the bipartisan leaders of the United States Senate and House of Representatives urging Congress to pass an extended version of the 2021 Child Tax Credit (CTC).

    The 2021 Child Tax Credit was an effective anti-poverty tool because it made it easy for eligible families to access their benefit. It reached about 65 million children and reduced child poverty by an estimated 30%.

    Behavioral science demonstrates that easier and more accessible processes allow people to follow through on their intended actions. Today’s letter provides an overview of several key provisions of the 2021 CTC that aligned with these realities to the benefit of families, as well as a call to action to include these provisions in a newly extended CTC:

    • Automatic enrollment: This makes it easier for eligible families to enroll in the CTC. Over 729,000 children were automatically enrolled in 2021.
    • Increased credit and monthly payments: Additional cash benefit amounts, coupled with monthly disbursements, equipped families to better navigate uncertain times by supporting and smoothing consumption. These provisions alone reduced child poverty in 2021 by an estimated 5%.
    • Refundable credit: A refundable CTC allows families with the lowest incomes to receive the full benefit. An estimated 3.6 million children gained the resources they needed to stay out of poverty in 2021 due to this provision.

    The letter also details additional provisions that leverage behavioral science to help families access the benefit and meet their needs:

    • Presumptive eligibility and a grace period: These provisions will help eligible families get cash right away and give caregivers who forget to enroll initially retroactive access to their benefits. Outreach funding: Additional funding for behaviorally informed outreach will help ensure all eligible families interested in accessing their benefit are able to do so.
    • Safe harbor clause: A safe harbor clause protects families who were accidentally given incorrect amounts of credit from having to repay it.
    • Immigrant access: Removing documentation requirements that exclude immigrant families with ITINs would increase CTC access to about 1 million immigrant children.

    Kelli Garcia, Director of the ideas42 Policy Lab, commented: “The Child Tax Credit is good policy that incorporates behavioral science principles to reduce child poverty. Today’s letter demonstrates that the CTC shouldn’t be a political issue. The facts support extending it. Congress must act soon to help families during a time when every dollar matters more than ever.“

    The full text of the letter, including additional evidence on the benefits of an expanded CTC and list of signatures of behavioral scientists urging Congress to take action can be found here.

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  • IMF says governments must protect the vulnerable with direct cash ‘when things fall apart’, avert unrest

    By: Andrea Shalal.

    See original post here.

    Governments must target fiscal support to vulnerable populations hit hardest by rising energy and food prices, and now facing growing food insecurity as a result of Russia’s war in Ukraine, the International Monetary Fund (IMF) said on Wednesday.

    Higher food and energy prices have heightened the risks of social unrest, especially in low-income countries already struggling with high debt levels after the COVID-19 pandemic, and now facing higher borrowing costs amid interest rate hikes, the IMF said in its latest report on global fiscal developments.

    “Government acting in its special role to protect the vulnerable when things fall apart goes a long way to keep social cohesion,” IMF Fiscal Affairs Director Vitor Gaspar told Reuters in an interview.

    Gaspar said there was ample evidence that financial crises, pandemics, and volatile or surging prices could exacerbate divisions and strife, and fiscal policy had an important role to play in addressing such concerns.

    “It is an absolute imperative for public policies everywhere to provide food security for all,” he said, arguing in favor of targeted, temporary measures such as cash transfers instead of broader, generalized subsidies that could be costly.

    Measures taken by many countries to limit the rise in domestic prices could also exacerbate global mismatches between supply and demand, driving prices even higher.

    Gaspar said poor households spent up to 60% of their budgets on food, compared to just 10% for the average household in advanced economies.

    However, many countries lack the spending power to fully address the latest crisis, after unprecedented outlays during the height of the COVID pandemic that drove global debt to $226 billion in 2020 – the largest one-year surge in debt since World War Two.

    “We believe that the global debt risks are quite significant. They affect some countries in all country groups,” Gaspar said, pointing to high yield spreads on some emerging market debt that reflected growing market perception of risk.

    The IMF said it expects global public debt to fall to 94.4% of gross domestic product in 2022 after peaking at 99.2% in 2020, stabilizing around 95% over the medium term. But that level is 11 percentage points higher than before the pandemic.

    Gaspar said the IMF would continue to push for changes to ensure greater clarity about the Group of 20’s common framework debt restructuring process and quicker timelines, as well as a freeze in debt payments during negotiations, and comparable treatment of private and public creditors.

    “The case for a global solution is very strong. And we are working hard to try to make it happen,” he said.

    “It’s in the best interest of creditor countries, it’s in the best interest of debtor countries, and it is in the best interest of private creditors as well.”

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  • Why did the US voluntarily choose to increase child poverty by 41%?

    Joe Manchin dealt the final blow to the Child Tax Credit. But the reasons it lapsed are deeper than one man.

    By: Dylan Matthews.

    See original post here.

    I wrote a long piece last week about how and why I failed to predict just how bad inflation would get. That got me thinking about some other current developments that caught me by surprise. The biggest among them: the death of the expanded child tax credit put in place by the Biden administration as part of the American Rescue Plan.

    Before Biden came into office, the credit maxed out at $2,000 per child ($1,400 for kids in families too poor to owe income tax), was bundled with tax refunds, and specifically left out families with little or no earnings. About one-third of children were excluded from the full credit, including over half of Black and Hispanic children, as well as 70 percent of kids raised by single moms. That’s precisely the population in most need of financial help.

    The Biden changes dramatically increased the credit to $3,000 per kid aged 6 and over, and $3,600 per kid under 6; paid it out monthly; and made the full credit available to all poor children, eliminating the previous “phase-in” rule that capped the credit at 15 percent of a family’s income.

    The Columbia Center on Poverty and Social Policy estimated that in July 2021, when the first monthly checks went out, the US child poverty rate dropped to 11.9 percent, from 15.8 percent the month before. It was the lowest rate on record since reliable data started in the 1960s, and likely the lowest rate in American history. Some polling data suggested that the share of households reporting problems with hunger dropped substantially after the credit went out.

    Giving families money, it turns out, is a simple way to reduce poverty, and given that child poverty imposes hundreds of billions of dollars of social costs a year, I thought it was a very worthwhile investment. But the expanded credit expired at the end of December. The Columbia team estimates that 3.4 million more children were in poverty in February 2022 than in December, a slide into need due almost entirely to the loss of the credit.

    So why did Congress let one of the most important child poverty policies ever enacted lapse?

    The Joe Manchin failure, and the larger failure

    There’s a very simple answer to why the child credit didn’t continue: there weren’t 50 senators willing to support its extension. And most public reporting suggests the main holdout was Sen. Joe Manchin.

    Axios’s Hans Nichols, the DC press corps’ premier Manchin-whisperer, reported last October that the West Virginia Democrat was demanding that the credit include a “firm work requirement” and not go to families making over $60,000 a year.

    That’s a huge departure from the Biden CTC, whose major attraction was that it didn’t phase in with income and went to all poor households. The credit also went to many families with six-figure earnings, and changing that as Manchin desired would force a de facto tax increase on upper-income folks.

    Some reports have also suggested that Manchin thought the money would go to buy drugs — an evergreen concern about cash programs for the poor (Manchin’s office declined to confirm or rebut that he expressed this concern privately). This suspicion is ill-founded; the best evidence review on the question I know of concluded there’s little reason to believe cash transfers increase drug or alcohol abuse.

    Manchin’s fear that the credit would disincentivize work is more credible, and the subject of some scholarly disagreement. The old child credit “phased in” with income, with beneficiaries getting 15 cents for each extra dollar in earnings. That in theory encouraged people to work, and University of Chicago economists Kevin Corinth and Bruce Meyer argued that getting rid of the phase-in would lead many people to drop out of the labor force. Other economists disagreed. But even if you think the credit mildly disincentivizes work, it still substantially reduces poverty. I’d argue that even if Corinth and Meyer are right, the policy was still worthwhile.

    So why does Manchin oppose it anyway? I suspect it has a lot to do with being a Democratic senator from a state that Donald Trump won in 2016 and 2020 by about 40 points. Manchin barely hung onto his seat in 2018 during a heavily Democratic year, and it’s understandable he doesn’t want to go too far out on a limb for a big government spending program. Millions of West Virginians benefited from the policy, but it’s ultimately a very conservative state skeptical of liberal policy initiatives. (Not to mention voting against your immediate economic interests is pretty common — plenty of wealthy people in blue states like California and Connecticut vote for candidates who’ll raise their taxes.)

    The structural challenge

    At some point, though, focusing too much on one man can mislead more than it informs.

    The bigger questions, I think, are a) why beneficiaries weren’t able to fight to keep the benefit, like the beneficiaries of Obamacare successfully did in 2017, and b) whether doing this kind of legislation on straight party lines is viable.

    The 2017 rescue of Obamacare was a great illustration of a classic political science theory from Berkeley’s Paul Pierson. Pierson noted that even conservative leaders like Margaret Thatcher and Ronald Reagan hadn’t been able (or even really attempted) to roll back foundational welfare state programs like the National Health Service and Social Security. He argued that beneficiaries became invested in these programs and would revolt against any politicians who threatened them.

    That’s basically what happened in 2017: Republicans should have had the votes to repeal Obamacare after Trump took the White House, but the prospect of throwing millions of people off Medicaid started to look so politically poisonous that several GOP senators bolted and killed the effort.

    I thought this would happen in 2021: letting the child tax credit expire would so enrage parents benefiting that Congress would be forced to extend it.

    That wasn’t so.

    Maybe the three rounds of stimulus checks primed voters to think of the child credit payments as temporary, that, like pandemic aid, the money would naturally come to an end. Maybe the people for whom the credit mattered most were too poor to have the time or resources to organize. Maybe the pandemic inhibited organization. Maybe it’s a matter of status quo bias: the credit was set to expire, and it’s always easier for Congress to do nothing than to pass new legislation to extend a program.

    Whatever the reason, beneficiaries couldn’t and didn’t save the credit. And this kind of policy reinforcement is the main reason Democrats have been able to expand the welfare state on party lines in the past (see, again, Obamacare, or Bill Clinton’s earned income tax credit expansion in 1993). Normally, Republicans could just repeal policies like this when they next take power, just as they reversed Obama’s upper-income tax hikes of 2012; but because the policies create their own constituencies, Republicans can’t actually do that.

    But if that kind of constituency doesn’t develop, it means policies like this are inherently vulnerable and can be cut off the next time there’s a change in party control.

    That suggests to me that the only path forward is some kind of bipartisan deal on the child tax credit.

    The Niskanen Center’s Samuel Hammond and Robert Orr have a great piece on what this would look like. It’d probably entail keeping an income phase-in and excluding households with absolutely no earnings. Hammond and Orr suggest keeping a very-young-child credit that’s fully available to people with no earnings, but concede that even this might have to fall by the wayside to earn Republican votes.

    That’s tragic, to me, because it excludes people who profoundly need help. But it might be the only way to make a policy like this work in America.

    The post Why did the US voluntarily choose to increase child poverty by 41%? appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • Advocates Say California Should Send $2,000 Per Child To Low-Income Families

    By: Jeanne Kuang | CalMatters

    See original post here.

    As Gov. Gavin Newsom and California lawmakers contemplate how to deliver the state’s surplus dollars back to Californians facing high gas prices and other rising costs of living, one group of advocates is pushing for another stimulus-like payment for the state’s poorest residents.

    A coalition of anti-poverty organizations is calling for the state to send a one-time payment of $2,000 per child to families making up to $30,000 a year.

    The proposal is sponsored by Assemblymember Miguel Santiago, a Los Angeles Democrat. It is intended to partly make up for the expiration of last year’s expanded federal Child Tax Credit payments. That expansion gave as much as $3,000 per child and $3,600 per child under 6 to families making low and middle incomes.

    Researchers at Columbia University have found that the expanded child tax credit reduced child poverty by more than 26%, with greater reductions among Black and Latino children. Nearly 90% of families spent the money on basic costs such as food, clothing or rent, according to the liberal-leaning Center on Budget and Policy Priorities (CBPP).

    Advocates have raised alarms now that the expansion of the program expired in December, citing CBPP figures showing 1.7 million California children are at risk of falling back into poverty.

    It was one of several pandemic relief programs that came to an end last year, including the Newsom administration’s Golden State Stimulus checks and enhanced unemployment benefits.

    Santiago said his proposal is a follow-up act on “the largest anti-poverty program we’ve had.”

    “When you’re making $30,000 or less for a family, they need immediate help,” he said.

    His legislation was heard Monday by the Assembly Revenue and Taxation committee, where it awaits a vote. The measure would cost $3.8 billion.

    It is the latest of several proposals for how the state could spend down a $31 billion budget surplus projected by the Legislative Analyst Office.

    Officials already are considering several rebate ideas potentially affecting a wider pool of Californians, to help them deal with inflation and the cost of gas.

    Newsom has proposed sending $400 debit cards to the owners of every registered car in the state, capped at $800 per individual, as well as $750 million to public transportation agencies to give free rides for three months.

    A group of Democratic lawmakers wants to give $400 rebates to all state taxpayers, regardless of car ownership. Both plans would cost around $9 billion.

    But Democratic leaders have balked at giving tax relief to wealthy Californians in addition to those with more modest incomes.

    Assembly Speaker Anthony Rendon and Senate President Pro Tem Toni Atkins favor a $7 billion plan that would give at least $200 rebates to families making up to $250,000 a year. In March Atkins said she was focused on “ensuring that state money is targeted to those who actually need relief.”

    Advocates of the child tax credit idea say the top priority for the surplus should be even more targeted. The lowest earners are hit hardest by inflation and spend the largest share of their incomes on gas, according to the Public Policy Institute of California.

    “We’re really pushing for a focus on doing the most and as much as you can for the lowest-income households,” said Teri Olle, California campaign director for Economic Security Project Action, a group advocating for cash assistance programs. “We know those are the households that are hurting the most.”

    A spokesman for Newsom did not comment on the proposal but said his rebate idea targets car owners regardless of income because it “is specifically meant to support Californians facing increased gas prices.”

    The post Advocates Say California Should Send $2,000 Per Child To Low-Income Families appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • Human Rights Watch: Targeted Safety Net Programs Don’t Protect Human Rights Sufficiently – Universality is Necessary

    See original post here.

    Targeted social protection programs intended to cushion people from the economic impacts of the Covid-19 pandemic have only had limited success in protecting human rights, Human Rights Watch said today. The World Bank and International Monetary Fund (IMF) should adopt a different approach that facilitates universal social protection during their Spring Meetings that begin the week of April 17, 2022.

    Social protection programs seek to reduce or cushion people from poverty, particularly in situations that affect their ability to earn an adequate income such as sickness, disability, old age, unemployment, and childrearing. Programs can include cash and in-kind transfers, pensions, public works, and school feeding programs. Social protection programs can be universal, designed to benefit everyone in a certain group. Or they can be means-tested, targeted to those who meet certain criteria, often based on income. IMF loans and World Bank projects have largely promoted targeted programs, though the Bank acknowledged universal social protection to be key to combat poverty and inequality.

    “One of Covid-19’s many painful lessons is that targeted social safety nets leave large segments of the population vulnerable to hunger, homelessness, and other problems,” said Lena Simet, senior researcher and advocate on poverty and inequality at Human Rights Watch. “Yet the IMF and World Bank appear to be doubling down on this second-rate approach to social protection.”

    Well-designed social protection measures are powerful tools for governments to reduce poverty and economic inequality and to meet their human rights obligations. Social protection is enshrined as the right to social security in the Universal Declaration of Human Rights and in the International Covenant on Economic, Social, and Cultural Rights. It is key to securing other economic and social rights, in particular the right to an adequate standard of living, which includes the rights to food and to adequate housing.

    The Covid-19 pandemic underscores the importance of social protection and has led to unprecedented government action. Between February and May 2020, 168 countries and territories announced at least 915 social protection measures in response to the pandemic. Yet, more than four billion people are not covered at all, based on International Labour Organization (ILO) estimates. Only one in four of the world’s children had social protection coverage, and just 18.6 percent of unemployed people received unemployment benefits.

    A Human Rights Watch analysis of 16 countries, including of relief specific to the pandemic, found that targeted programs excluded millions of people who were in need of social security to protect their rights, leaving them without adequate food and with other problems. Human Rights Watch analyzed measures in Austria, Cambodia, Cameroon, Ghana, Jordan, Kazakhstan, Kenya, Lebanon, Nepal, Nigeria, Spain, Turkmenistan, Uganda, Ukraine, the United Kingdom, and the United States. Human Rights Watch also reviewed the 19 IMF loan programs approved between March 2020 and December 2021 and analyzed numerous World Bank social protection projects approved during the pandemic.

    Governments and international financial institutions expanded existing social protection programs and introduced new ones in the countries where Human Rights Watch conducted research.

    But almost all were targeted and were insufficient or not meaningfully responsive to the economic realities of people living in poverty and those in precarious employment or excluded parts of the population, Human Rights Watch found.

    As social protection responses have largely piggy-backed on existing systems, they have exposed – and in some cases worsened – deep-seated inequalities in access to social protection.

    For example, Jordan expanded its cash transfer program to reach 240,000 households in 2021, but that left millions of people without support when poverty is estimated to have spiked from 15 percent to as much as 24 percent of the population of roughly 10 million in a matter of months. The country’s large refugee population, most of whom live in poverty, is not covered, but has to rely on aid agencies. Kenya implemented a Covid-19 cash transfer program that targeted just 21 of Kenya’s 47 counties. Human Rights Watch research found it reached only a tiny fraction of the targeted populations and left millions of people in Nairobi county’s informal settlements with no support despite dire need.

    These findings are consistent with a growing body of research that has shown that universal social protection programs are more effective at reducing poverty and inequality.

    By extension, they offer a better opportunity for more people to realize their rights, including to an adequate standard of living.

    Targeted programs are often designed too narrowly and exclude many people in need; selection processes are frequently costly, inaccurate, and prone to mismanagement or corruption; and many eligible people find it hard to apply or don’t apply due to the stigma associated with poverty. Targeted programs have also been found to breed resentment by leaving people out, eroding public support for maintaining them.

    In recent years, some leading institutions, including the World Bank, have embraced universal social protection. In 2012, the ILO adopted Recommendation No. 202 on social protection floors calling on members to ensure “the universality of protection, based on social solidarity.” Four years later, the World Bank announced it would partner with the ILO to advance universal social protection, which it calls “central to its goals of ending poverty and boosting shared prosperity.”

    Any change by the World Bank would be enormously influential as it provides two-thirds of global aid to low-income countries for social protection. According to the World Bank, by April 2022, its safety net portfolio has reached US$26.55 billion in 71 countries. In a 2019 white paper, Protecting All, the World Bank said it “wholly endorses the objective of universal social protection espoused by the international development community.” The World Bank, along with the ILO, co-chairs the USP2030, a multistakeholder initiative to achieve universal social protection by 2030.

    But the World Bank appears to be continuing to invest primarily in means-tested targeted programs, according to research published by several organizations, as well as the Human Rights Watch review of numerous Bank-funded projects. In a statement to Human Rights Watch, the World Bank said the Covid-19 pandemic and other recent crises “remind us for the need of universal social protection,” and that it is investing in “building and strengthening adaptive and sustainable social protection systems, which are crucial to safeguarding the poor and vulnerable to shocks.”

    The IMF has not embraced universal social protection even in principle and continues to favor targeted social protection programs including those approved since the pandemic began. A Human Rights Watch review of all 19 IMF loan programs approved between March 2020 and December 2021 found that all social protection measures and policy advice were for targeted programs.

    “The IMF and World Bank have made building inclusive economies central to their support for economic recovery,” said Simet. “Promoting universal social protection is key to succeeding at that goal.”

    World Bank and IMF Approach to Social Protection

    Despite the World Bank’s announcement in 2016 that it would partner with the ILO to advance universal social protection, analyses by other nongovernmental organizations of pre-pandemic programs found that the Bank has remained committed to targeted programs. The European Network on Debt and Development (Eurodad), a civil society network advocating human rights-based financial and economic systems, published a report in 2019 analyzing loan conditions in development policy operations in 46 countries in 2017, the year after the Bank announced its universal social protection partnership.

    These operations provide general development financing, rather than funding for specific projects, conditional on certain policy reforms. The analysis found that just 18 of 434 total lending conditions related to social protection, and 12 of those focused on enhancing targeting rather than expanding coverage.

    A 2018 analysis by Stephen Kidd, a social protection specialist at Development Pathways, a consultancy group that supports developing countries in creating social protection programs, found several instances in which the World Bank, working with the IMF, actively opposed existing or proposed universal programs, including for child benefits, in favor of targeted ones.

    A Human Rights Watch review of about 20 World Bank-funded projects accessed in August 2021 by searching under the theme “social protection” on the World Bank’s website, also suggests that it continues to fund targeted programs despite the exigencies of the crisis.

    The projects are different in many respects and vary widely in the amount of lending, but all are targeted. Typically, they expand the number of beneficiaries covered, and create systems to identify and select beneficiaries. Some also introduce “adaptive” social protection systems that can be scaled up in emergencies. For example, in Seychelles, a World Bank project is working in tandem with an IMF loan program to revise a universal program for older people and people with disabilities to make it targeted. There is also a growing push to automate and digitize social protection programs, such as by delegating the means-testing process to algorithms and moving the application for benefits and their delivery to online systems.

    The World Bank told Human Rights Watch that its “financing for safety nets projects alone has reached US$26.55 billion (including $15.64 billion in IDA) in 71 countries,” and that it is investing in developing “adaptive social protection systems that can scale up and down quickly in response to shocks, with a mix of programs for population groups and needs in order to protect all.” It also noted that it is “improving delivery systems by leveraging technology, such as expanding coverage of social registries to better link services to the poor and underserved populations including informal sector workers or refugees.” This suggests that its efforts to “protect all” are focused on improving targeting mechanisms rather than implementing universal programs. Human Rights Watch research has found that errors and exclusion remain in tech-enabled social protection systems, preventing people from accessing support even when eligible, as described below.

    The IMF’s continued preference for targeted programs often constrains governments’ investment in social protection as it informs where the IMF sets social spending floors, which typically commit governments to a minimum amount of spending on certain social programs or sectors. These floors protect key social sectors or programs from cuts, and while they are not ceilings, in practice governments have little room to spend more since IMF loan programs impose strict limits on government spending, particularly since the pandemic.

    An internal review of IMF mission chiefs published as part of a new social spending strategy approved in 2019 found that in 64 percent of cases they recommended introducing or expanding targeted programs, and in 18 percent they recommend downsizing programs that are not targeted. The same year, the IMF adopted a new social spending strategy that opened the door to a more flexible approach, instructing mission chiefs to take into consideration “country preferences and circumstances.” But this flexibility appears to have had little effect.

    Measures and policy advice in all 19 loan programs reviewed favored targeted programs. For example, Ecuador’s program expands social protection coverage to 80 percent of the poorest 30 percent of the population, even though the poverty rate rose to 38 percent of the population since the pandemic, according to the IMF. In Cameroon, the IMF program lauds the expansion of a cash transfer program, partially with World Bank funding, which “targets transfers to the most vulnerable populations hit by the pandemic.” The program is expected to reach 300,000 households in select regions, even as roughly 25 percent of Cameroon’s population of 25 million lives in extreme poverty.

    The IMF should recognize universal social protection as an important goal for achieving inclusive economies and a rights-based recovery.

    It should also develop guidance to implement its 2019 social spending strategy that increases flexibility providing clear instruction to mission chiefs on when and how they can or should promote universal programs. The World Bank should implement its commitment to universal social protection and move away from targeted measures that have excluded many people in need.

    To address the need for increased funding for universal social protection in low-income countries and demonstrate its commitment to fighting poverty and inequality, the World Bank and the IMF should support the call by the UN special rapporteur on extreme poverty and others to establish a Global Fund for Social Protection.

    Key Gaps in Social Protection Systems

    ILO figures show that only 26.4 percent of children globally receive social protection benefits. This confirms Human Rights Watch research that found that Covid-19 relief programs often reached only a fraction of households needing support.

    Lebanon’s social protection system excludes many people because of their work status, class, gender, citizenship, ethnicity, and other social characteristics such as disability or age. The two largest social protection programs in the country are World Bank financed: the National Poverty Targeting Programme (NPTP) and the Emergency Social Safety Net (ESSN). In 2016, Oxfam and the American University in Beirut found that the National Poverty program was ineffective and did not reach many in need. As of March 2021, only 1.5 percent of the population had access to the program. The emergency program was rolled out in March 2022, with the aim of reaching 27 percent of the population.

    This is against the backdrop of UN estimates that around 80 percent of Lebanon’s population lives in poverty. The inadequacy of the social protection system is exacerbated by client and patronage networks, with political parties in control and doling out services to their supporters.

    Pensions for older people are the most widespread form of social protection in the world, with 77.5 percent of people above retirement age receiving some form of old-age pension, according to the ILO. However, many people, particularly informal workers, are left out of pension programs. Nigeria’s pension scheme is open to employees in the formal and informal sectors, but enrollment is only about 40 percent nationally, according to a World Bank report published in 2019. The report also notes that long-term underinvestment in social protection meant that, prior to the pandemic, only 4 percent of the poorest 40 percent of households had access to any form of social safety net.

    A July 2021 Human Rights Watch analysis of government household surveys revealed that in May, August, and November 2020, as the pandemic raged, no more than 15 percent of Nigerian households nationwide received cash transfers or food assistance even though almost 50 percent of households surveyed at the same intervals had run out of food in the previous 30 days. 

    Informal Workers Remain Largely Excluded

    Informal workers are mostly excluded from social protection systems despite facing higher poverty risks than formal sector workers. Although Kazakhstan, Kenya, Nigeria, Spain, the United States, and many other countries where Human Rights Watch conducted research expanded social protection during the pandemic, the majority of informal workers remain unprotected. This creates a major gap in social protection since more than 6 out of 10 workers are in the informal economy globally according to the ILO.

    In the United States, federal Covid-19 relief and social protection programs generally excluded informal workers like street vendors and undocumented immigrants. Some states and cities attempted to fill the coverage gap. New York State created a US$2.1 billion Excluded Workers Fund in October 2021 to help those without access to federal support for joblessness, such as for back rent and medical bills. But demand for relief was high and the fund depleted quickly, leaving tens of thousands of people without support.

    In Kazakhstan, informal sector workers, 30 percent of the workforce, were eligible for temporary state aid early in the pandemic. However, they had to pay a non-refundable social security contribution to get the aid. The payments of 1,325 Kazakhstani Tenge or KZT (approximately $3) in rural areas and KZT 2,650 (approximately $6) in urban areas could have been a barrier to benefits, given that many informal workers earn incomes below the poverty line.

    Targeting Can Foster Stigma and Exclusion

    In many countries, targeted programs can actually prevent people from accessing the support they urgently need. When cash transfers are targeted according to economic or other criteria, many needy households may be left out, while some less vulnerable households may be included. Social protection systems with narrowly means-tested social assistance instruments can leave a “missing middle” in social protection coverage. Accurate means testing is difficult, and errors can be significant. A 2017 IMF study of nine Sub-Saharan Africa countries found that 80 percent of households below the poverty line were counted as non-poor, while 40 percent of non-poor households were counted as poor.

    Targeted programs can foster tensions or resentment between recipients and non-recipients, including social stigma.

    They may also cause unintended negative consequences by creating incentives for adults in the household to work less or underreport their income to qualify. Administrative costs, particularly for conditional cash transfers, may also be high.

    In Nepal, an evaluation of cash transfer pilot programs found that the targeting process took up 22 percent of the project’s total costs. The UN Children’s Fund (UNICEF) estimates that the targeting methods used – based on caste and a simple proxy means test – excluded more than two-thirds of eligible children living in poverty from the program. A UNICEF evaluation in 2016 concluded that a universal option would best reduce the poverty gap and best reach “the poorest of the poor.” The government has since committed to covering all children under age 5 and has been expanding coverage toward that goal.

    At the onset of the pandemic, in April 2020, the Ugandan government initiated an emergency program targeting 1.4 million people in Kampala and Wakiso districts for food assistance. The initiative was criticized for targeting districts with some of the lowest poverty rates in the country – 3 percent, compared with much higher rates in the subregions of Karamoja at 61 percent, Bukedi at 48 percent, and Busoga at 42 percent. 

    Social Protection Programs Prone to Corruption

    Social protection programs channel large amounts of public resources, making them prone to corruption and mismanagement. These risks are exacerbated in targeted programs that rely on complex eligibility criteria. Human Rights Watch research on IMF emergency loans to Kenya, Cameroon, and Nigeria, as well as Ecuador and Egypt, found major gaps in the information governments disclosed about how they had spent IMF funds, despite committing to a range of transparency measures.

    In Kenya, President Uhuru Kenyatta announced in May 2020 that he had allocated 10 billion Kenyan shillings (approximately $100 million) to protect vulnerable households from the pandemic’s economic fallout. Human Rights Watch found that the program was not only inadequate and short-lived but also lacked basic transparency. Only a small fraction of vulnerable families in Nairobi benefited from a pandemic social security program characterized by cronyism, nepotism, and outright favoritism. Government officials failed to follow the stated selection criteria or to share information that should have enabled more vulnerable families to enroll.

    In Cameroon, corruption and a lack of transparency in the government’s use of Covid-19 relief funds meant that many people in need never received support. People who lost jobs or wages due to the pandemic told Human Rights Watch that they received little or nothing to stave off hunger. The risk of corruption has been increased by inadequate oversight over IMF funds loaned for Covid-19 response.

    Tech-Enabled Bureaucracy

    In its Social Protection and Labor Strategy 2012–2022, the World Bank states that it will increasingly support using innovative Information and Communication Technologies “as a way to reach the most vulnerable.” Its statement to Human Rights Watch noted that “advances in technology—ICT, big data, artificial intelligence, and machine learning—offer the promise of significant improvements in coverage and service delivery.” However, using technology to identify people eligible for social assistance or verify their identity can lead to discrimination and social exclusion.

    In the United States, some states use facial verification technology to verify whether applicants for benefits are who they say they are. Many people across the country have reported errors verifying their identity with the technology and that they face a lengthy and cumbersome process of appealing these errors. These problems create delays in obtaining urgently needed benefits, and have sometimes forced people to abandon their application.

    In Kazakhstan, workers who tried to get relief in April 2020 had to apply through a cumbersome online process, which created confusion, delays, and mistrust, especially for those with spotty or no internet access. In early April Radio Azattyk interviewed people from a crowd outside a post office in Kyzylorda to submit their applications by mail. Those interviewed cited various reasons they were unable to apply online, the barrier posed by the online process, and its impact on them.

    In Austria, the government used an algorithm for employment support that predicts job seekers’ employment prospects. The government prioritizes people with moderate prospects for services such as job search assistance and job placement. People with low prospects are confined to crisis support measures. Studies have shown that the algorithm discounts the chances of women over 30, women with childcare obligations, migrants, or people with disabilities. Misclassifying people from these groups and limiting them to crisis support is not only discriminatory but could undermine their ability to find and maintain a job and enjoy their right to an adequate standard of living.

    In the United Kingdom, the government’s cash benefits program, Universal Credit, relies on a flawed automated system for calculating benefits, leading to payment delays and irrational fluctuations in benefit amounts for many people in low-paying and unstable jobs. These problems are causing financial hardship and food insecurity, as well as negatively affecting people’s mental health. The cumbersome process for applying online has also alienated people who do not regularly use computers or the internet to access their welfare benefits.

    Unequal Benefits Globally

    World Bank data from May 2021 show that residents of high-income countries benefitted from pandemic-era social protection measures averaging $847 per person, while residents of African countries had received an average of just $28 per person.

    According to the ILO, only 17.4 percent of Africans had access to at least one social protection benefit in 2020, including 5 percent of unemployed workers and 13 percent of children. This compares with 51 percent of unemployed workers and 82 percent of children in European and Central Asian countries.

    There were also wide discrepancies across countries within regions: almost half of South Africans could get at least one social protection benefit compared to just 11 percent of Nigerians and 3 percent of Ugandans. The lack of access reflects the long-term underinvestment in social protection in Africa, where governments spend less than 4 percent of their gross domestic product (GDP) on social protection programs, excluding health care, compared to the global average of 13 percent.

    Cuts to Temporary Social Protection Could Severely Affect Rights

    The expansion of social protection measures during the pandemic was often temporary and has since been reversed. In Cambodia, the absence of a robust social protection system left low-income households disproportionately harmed by Covid-19’s economic impact and lockdowns without a safety net. Sporadic one-off cash transfers were so limited that they left many without support, exacerbating an unaddressed micro-loan debt crisis. In Kenya, cash transfers and tax relief introduced to ease the impact of the pandemic ended in December 2020 despite the continued economic struggles people living in or near poverty experienced.

    International human rights law obligates states to respect, protect and fulfill human rights, and in the context of cuts to spending or programs on social and economic rights, this means carefully assessing the regressive impact of those cuts, and avoiding or minimizing them if feasible. Where cuts would have a regressive impact, governments should assess if they have used the maximum of available resources to avoid cuts, and if the regressive impact can be justified with respect to the totality of rights protected.

    In the United Kingdom, in October 2021 the government cut support under its flagship Universal Credit social security program to people living on low incomes by up to £1040 per year, despite multiple warnings from nongovernmental groups about the likely harm. The government contended that it was simply withdrawing a temporary pandemic-related increase, but the reduction exacerbated the system’s failure to guarantee an estimated 5.9 million people’s right to an adequate standard of living.

    Another estimated 2 million people, many with disabilities or long-term health conditions, on the pre-Universal Credit social security support, or “legacy benefits” as they are known, never received any increase. In March 2022, the government set out a budget in which social security support failed to keep pace with rapidly increasing inflation, resulting in what was effectively a second real-terms cut in a year.

    In the United States, the federal government cut pandemic unemployment benefits in September 2021, reducing benefit rates and tightening eligibility criteria. As a result, an estimated 7.5 million workers lost access to expanded benefits. In December 2021, the federal government failed to pass the Build Back Better Act, which would have extended temporary provisions and introduced additional programs, substantially expanding social protection. In a stark example of the rights implications, 3.7 million children were plunged into poverty when child cash transfers expired in January, increasing the child poverty rate from 12 to 17 percent, and from 19 to 25 percent for Black children. 

    The post Human Rights Watch: Targeted Safety Net Programs Don’t Protect Human Rights Sufficiently – Universality is Necessary appeared first on Basic Income Today.

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  • Here’s what consumers plan to cut back on if prices continue to surge

    By: Carmen Reinicke

    See original post here.

    As inflation continues to weigh on American households, people are plotting what they’ll cut from their budgets in the coming months to keep spending in check.

    More than 50% of adults say they’ve already cut back on dining out and will consider reducing that further if inflation continues to surge, according to the CNBC + Acorns Invest in You survey, conducted by Momentive. The online survey of nearly 4,000 adults was conducted March 23-24.  

    Which of the following, if any, will you consider doing if higher prices persist? (Select all that apply)? Dining out: 52%

    People are also cutting back on driving and subscriptions and are even canceling vacations to keep up with inflation, the survey found.

    “It’s been astounding,” said Tania Brown, an Atlanta-based certified financial planner and founder of FinanciallyConfidentMom.com.

    Which have you cut back on in the last 6 months: 53% say dining out; 39% say driving.

    People are thinking about rising prices all the time

    Inflation is at its highest level in 40 years and has pushed up the prices of most consumer goods and services, including housing, food and energy.

    That means many Americans are suddenly spending more on essentials, making their budgets tighter without any change in habits. People are noticing these hikes and paying closer attention. Nearly half of all adults said they think about rising prices all the time, while 55% of those with annual household income of $50,000 or less are constantly checking costs, the survey found.

    To watch video, please visit: https://www.cnbc.com/2022/04/05/consumers-squeezed-by-inflation-plan-to-cut-back-if-prices-keep-surging.html#Echobox=1649153204

    “Having your eyes focused on your spending is always a good strategy,” said Susan Greenhalgh, an accredited financial counselor who runs Mind Your Money LLC in Rhode Island. “You really can’t understand what’s happening with your money unless you’re really looking at it and measuring it.”

    Keeping track of what you spend can also help you tailor where you can cut back, she said, as inflation hits everyone differently. If you’re someone who doesn’t eat out much but is getting pummeled by gas prices at the pump, reducing driving will probably help your budget more than skipping a few dinners at a restaurant.

    It’s also important to be watching and comparing your spending month to month because prices are rising so quickly. You may have to adjust more frequently than you’ve had to in the past.

    “The No. 1 goal is, no matter what, to protect the necessities, and that is food, shelter, basic transportation and basic medical,” said Brown.

    What to do about inflation

    Inflation is poised to continue to run hot, squeezing budgets even further. More than 75% of adults said they’re worried higher prices will force them to rethink their financial choices, the survey found.

    The impact will be the harshest on those with the lowest incomes who may be pushed into survival mode, said Brown. For those struggling to cut spending even more, she also said to reach out to creditors and lenders to see if you can put off payments.

    Some people may also qualify for programs to help with utility bills, which could help with monthly costs she said. It may also be time to dip into emergency savings to cover your essential costs, if you need to, she added.

    Those with higher incomes will also have to adjust, especially if they want to keep saving at the same rate as they were before inflation ticked up, said Greenhalgh.

    Of course, if your budget is stretched too thin, cutting back on savings may have to happen to avoid debt. If that’s the case, both Brown and Greenhalgh suggest putting away smaller amounts consistently to keep yourself in the habit of saving.

    “As long as you’re taking things in the right direction, that’s great,” said Brown.

    The post Here’s what consumers plan to cut back on if prices continue to surge appeared first on Basic Income Today.

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  • New food insecurity stipend should help as many troops as possible, lawmakers argue

    By: Leo Shane III

    Original post can be found here.

    House leaders are pushing military leaders to make eligibility and enrollment in the Defense Department’s new financial assistance program as generous as possible, saying that is needed to “address food and financial insecurity among servicemembers.”

    In a letter to Defense Secretary Lloyd Austin, the group urged military leaders to move quickly on implementing the new Basic Needs Allowance and to automatically grant the financial help to all eligible families unless they specifically opt out of the program.

    They also pushed for the department to exclude housing stipends in their calculations for program eligibility in order to benefit “as many service members as possible.”

    On Monday, military leaders unveiled their budget plans for fiscal 2023, including the new Basic Needs Allowance authorized by Congress last year. Comptroller Michael McCord hailed the program as a way to help “the most vulnerable portion of our force to address economic insecurity,” but he offered few specifics on how the new benefit will be distributed.

    Under guidelines approved by Congress last year, the new financial aid is targeted at military families whose household incomes are less than 130% of the federal poverty guidelines.

    For a family of three, that equates to about $30,000 this year. For a family of four, it’s about $36,000.

    The Congressional Budget Office has estimated that about 10,000 service members — mostly junior enlisted troops — would qualify for the new benefit, receiving an average monthly payout of about $400.

    However, the exact total depends on how DoD officials construct program rules and regulations.

    Military planners in coming months are expected to decide which military benefits and compensation should be included in troops’ income totals. Things like combat pay, re-enlistment bonuses, food stipends and housing benefits could all be added to military basic pay to push troops’ total income into a higher level, making them ineligible for the new benefit.

    The lawmakers who wrote to Austin this week — a group that includes House Armed Services Committee Chairman Adam Smith, D-Wash.; the committee’s personnel chairwoman, Jackie Speier, D-Calif.; and House Agriculture Committee Chairman David Scott, D-Ga. — urged officials “to exempt as much of the [housing stipends] as possible” in their rules.

    The group also pushed for military planners to certify eligibility for the allowance once a year in order to simplify the application process for families and commanders, and to make the program an “opt-out” benefit rather than one troops have to apply for, in an effort to get the money to as many individuals as possible.

    “We look forward to working with the department to ensure that no one who serves our country has to worry about putting food on their table,” the group wrote.

    Service officials are expected to release additional details about the new Basic Needs Allowance in the coming months. The fiscal 2023 budget isn’t expected to be finalized until this fall, and the new benefit wouldn’t begin to be distributed until sometime in calendar 2023 at the earliest.

    The post New food insecurity stipend should help as many troops as possible, lawmakers argue appeared first on Basic Income Today.

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  • Study Finds Employment Declined for Parents After Ending Monthly CTC Payments

    See original post here.

    Households who received the monthly Child Tax Credit in 2021 experienced a dramatic decline in employment after the credit expired, according to a recently-released analysis of Census Bureau data.

    The report from the Social Policy Institute at Washington University in St. Louis found that declines in employment in the new year have been sharpest for CTC recipients once the enhanced credit was terminated. Employment of Child Tax Credit recipients dropped from 72.4% to 68.3% after the final monthly payment of the credit in December 2021. 

    This equates to approximately 1.4 million CTC-recipient households that may have left jobs due to the end of the monthly child tax credit, a shocking number considering the US nonetheless added 504,000 jobs in January on the net.

    Fastest Pace of Annual Inflation in 40 Years

    As rising prices continue to strain the finances of American families, this employment data suggests that some expenses like childcare, which enabled parents to work, are no longer affordable for many. The Consumer Price Index rose by 7.9 percent through February according to the Bureau of Labor Statistics, marking the fastest pace of annual inflation in 40 years.

    “Many parents can’t work right now because they can’t afford childcare, but they can’t afford childcare because they can’t work,” said Greg Nasif, Director of Public Affairs at Humanity Forward.

    “Reverting the Child Tax Credit back to monthly payments could help break this vicious cycle for millions of families and end the decline of employment.”

    It’s Up to Congress

    This study comes as Congress continues to deliberate the fate of the Child Tax Credit. “It’s up to Congress to reach a compromise that ends this disruption of monthly support for American families,” says Paolo Mastrangelo, Head of Policy & Government Affairs at Humanity Forward. “While the Child Tax Credit still exists, for the majority of families in this environment a lump-sum payment is nowhere near as useful as the monthly payments are – we hope Congress can find a way to fix this.”

    The post Study Finds Employment Declined for Parents After Ending Monthly CTC Payments appeared first on Basic Income Today.

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  • The Evolution of Ukraine’s Income Support Program

    by: Peter Knight

    Original post can be found here.

    This article is based on a post by Scott Santens, and quotes extensively from it, New information was also obtained today from an article by Violetta Orlova forwarded by a Russian BIEN activist born in Ukraine, Alexander Soloviev.

    On December 19, 2021, Ukraine launched “ePidtrymka” which translates to eSupport. It was launched on Diia which is a smartphone app and web portal that itself was launched in February 2020 to function as a means of storing and sharing digital versions of documents, and also making government services available digitally instead of requiring in-person interactions only. Diia made it possible for Ukrainians to prove their vaccination status as one of the over 50 services that is now available on Diia.

    Because ePidtrymka is a service that rewarded people for getting vaccinated, there are people claiming that the “Great Reset” has just begun in Ukraine with the trifecta of universal basic income, vaccination, and social credits.

    What Ukraine is doing does not meet BIEN’s definition of a basic income, but it nevertheless may represent an important step towards a UBI.

    What Ukraine did initially was to provide people with 1,000 UAH which is about $34. However, vaccinated Ukrainians couldn’t spend it on anything, because it was also meant as a stimulus program designed to help businesses most hurt by the pandemic. Because places like restaurants and gyms suffered the most financial loss during the height of the pandemic, ePidtrymka cards could only be used at those kinds of businesses. Other possible purchases were books, concerts, theaters, museums, and transport. The point was to help these businesses out of the hole Covid put them in while also encouraging vaccination, which actually makes a lot of sense considering those same businesses were hurt the most because they’re the places where Covid gets transmitted the most. It would be bad for these businesses to suddenly get a lot of unvaccinated customers and lead to another Covid spike.

    Additionally, cashback debit and credit cards function in a very similar way, where different kinds of purchases result in different reward levels. It’s also somewhat similar to EBT (Electronic Benefit Transfer) cards (aka food stamps) that can be used to only buy certain foods, but not all foods. There was also a time limit added to the vaccination reward, where it needed to be spent within four months or forfeited. This again was meant as a stimulus, encouraging people to spend instead of save in order to more quickly grow the Covid-impacted economy.

    Further, Ukraine was planning on making the ePidtrymka program available offline in 2022 instead of only available online and via the app. It was never intended to only be available online.
    On January 24, 2022, there was the first expansion to the ePidtrymka program, which enabled those over 60 to spend their rewards on medicines too. This was soon followed on February 7 by extending the rewards to everyone over age 14 and also expanding available spending to “educational services, children’s extracurricular activities, staying in a summer or sports children’s camp, sporting goods, stationery, and school supplies.” This was then followed on February 14 by expanding purchases to housing and communal services for those over age 60.

    The next expansion of the program was scheduled to happen on March 14 with the introduction of an additional 500 UAH (about $17) to reward people for getting a booster shot, and also the ability of those with disabilities to spend their rewards on medicine, housing, and communal services too, but then Putin sent Russian troops over the border to take over Ukraine. Thus the next expansion of the program ended up being the ability of everyone in Ukraine with ePidtrymka rewards they hadn’t yet spent to donate their funds to the Ukrainian military.

    This was soon followed by the lifting of all restrictions on spending. Since March 2, as a result of the war, all Ukranians with ePidtrymka rewards have been able to spend their rewards exactly as cash, on anything they feel is best or they most need. And on March 8, an additional 6,500 UAH ($220) was added through the ePidtrymka system to every employee in the most war-impacted areas for whom USC is paid (their version of Social Security), including every entrepreneur, without any vaccination requirements applied, and without any limitations on spending – including time restrictions.

    An Advisor to the President of Ukraine on economic issues, Oleg Ustenko, said on April 2 that the Ukrainian government is considering the possibility of introducing an unconditional basic income for the population.

    That is, the regular payment by the state of a certain amount from the budget to each citizen just like that – without any conditions and the need to work for the money received.  Ustenko did not specify what amount he was talking about.

     “The possibility of introducing the so-called unconditional income for the population for a long time is being considered – it was discussed before the war, but did not find support, now it should and will work…. This issue is not just being considered, we already have an understanding of where to move in this direction,” Ustenko said.

    Summarizing, Ukraine innovated a way of more productively administering government programs. One of those programs was a small one-time reward for getting vaccinated against Covid that was meant to support those sectors of Ukraine’s economy that suffered the most from quarantine restrictions. That program then served as a means of helping the people of Ukraine in a time of national emergency in a way that wouldn’t have otherwise been as quickly implementable. Thanks to the plumbing already existing, Ukraine was able to use those pipes to instantly get money to the people of Ukraine that they could spend on anything they need, vaccinated or not, during an invasion by Russia.  

    The post The Evolution of Ukraine’s Income Support Program appeared first on Basic Income Today.

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  • Senators in Canada overwhelmed by emails, calls pushing conspiracy theories about basic income legislation

    Red Chamber grappling with a flood of messages claiming basic income is a plot by a shadowy global elite

    By: John Paul Tasker ·

    See original post here.

    Members of the Red Chamber have been hit by a wave of questionable correspondence from Canadians convinced that a pending Senate bill would take away their pensions and lead to some sort of totalitarian world government.

    Tens of thousands of calls, emails and handwritten letters urging senators to oppose Bill S-233 have flooded into the Red Chamber. The emails — many of them based on outlandish conspiracy theories — have at times overloaded the Senate’s servers, bringing the normal workflow to a grinding halt.

    Bill S-233 calls for the creation of a national “framework” to allow the federal government to begin studying a “guaranteed livable basic income” program in Canada.

    If passed, the one-page bill, which was introduced by Ontario Sen. Kim Pate, would not establish a basic income program in Canada. It would simply compel the Department of Finance to study the concept and report its findings.

    Under parliamentary rules, a senator cannot propose any new spending or tax increases through a Senate public bill like S-233. Moreover, bills of this sort — and non-government legislation more generally — rarely pass through both houses of Parliament into law. The federal Liberal government has also been cool to the idea of a basic income program.

    Despite those facts, senators are grappling with a well-organized letter-writing campaign driven by people worried that the bill’s passage will somehow result in real harms, like an end to Old Age Security and Employment Insurance or the contributory Canada Pension Plan.

    Some of the thousands of letter-writers also falsely claim that, if passed, the bill would limit future social welfare programs to people vaccinated against COVID-19, or that cigarette smokers will be barred from government assistance.

    The bill would not make any changes to existing government programs and does not stipulate who would qualify if the government were to implement a basic income scheme.

    Some of the concern about pensions and income support seems to stem from a tweet by Peter Taras, a former Ontario candidate for the People’s Party of Canada. He told his followers that, if Bill S-233 passes, “if you are not vaccinated you will not receive EI, CPP, OHS, Social Services or Pension that YOU PAID INTO.”

    ‘Fantastical and untrue’

    That message has been retweeted more than 700 times.

    Pate told CBC News that the tweet is “absolutely fantastical and untrue” and people like Taras are “spreading misinformation … that unnecessarily terrifies people by telling them their access to financial support and services upon which they rely would be terminated.”

    She said it is “absolutely not” her intention to wind up any existing program.

    Ontario Sen. Kim Pate in 2013. Pate said people have been spreading misinformation about her bill, S-233, which would prompt the government to study implementing a universal basic income program in Canada. (Colin Perkel/The Canadian Press)

    “Bill S-233 would not claw back or reduce services or benefits meant to assist individuals with needs relating to their health, disability, retirement, etc.” she said.

    “The bill proposes developing a framework for implementing guaranteed livable basic income, an income support program available to anyone living in poverty in Canada. In my humble opinion, it could form one component of a robust, responsive, and comprehensive economic, health and social safety net that includes housing, child care, education, pharma, dental and mental health care, as well as programs like pensions, disability supports and EI.”

    Other letter-writers took an even darker view of Pate’s push to have the government study a basic income.

    Alberta Sen. Paula Simons told CBC News she has personally received “thousands and thousands” of emails, letters and phone calls from people who say the bill is some sort of plot by nefarious actors to establish a “new world order” or a system of state surveillance.

    Simons said she and other senators have had trouble navigating through their clogged inboxes. They’ve had to resort to other messaging platforms because their email accounts have become “functionally useless,” she said. The Alberta senator said her voicemail is always full because of the sheer volume of calls.

    Fascists, Soros and cyborgs

    Those contacting senators’ offices to oppose S-233 blame the purported conspiracy to destroy the Canadian way of life on a range of bad actors: fascists, socialists, the Masons, billionaires like Microsoft founder Bill Gates or investor George Soros, or World Economic Forum (WEF) head Klaus Schwab.

    Others bizarrely maintain the legislation will lead to “transhumanism” — an alleged plot to turn people into cyborgs.

    “This is CANADA . . . not North Korea, not Russia, you are employees of the people! NOT EMPLOYEES OF THE WEF OR THE WHO,” one correspondent told Simons in a recent email.

    “Bill S-233 is just the beginning. We are losing our freedoms to a group of elites that want to depopulate and control mankind, enslave us to experimental transhumanism, and the removal of any Christian and Godly devotions,” said another.

    “Nobody voted for Nazi Klaus Schwab. Nobody even knew he existed 2 years ago. He has NOTHING to do with Canada or any other country. Schwab holds a statue of Lenin in his office! This is NOT CANADA. We are NOT going BACK to NAZI GERMANY. Please see NUREMBERG CODE & TRIALS,” said one letter-writer, referring to the WEF founder who has been the subject of many conspiracy theories since the onset of COVID-19.

    Alberta Independent Sen. Paula Simons gives an interview in a park in Victoria, B.C. on Nov. 30, 2021. (Mike McArthur/CBC)

    On Tuesday, all senators got an email that claimed the adoption of a basic income program would lead to the forced sterilization of people of child-bearing age and the extermination of the elderly and the disabled.

    Simons said an untold number of Canadians have been “manipulated and terrified” into believing “outrageous” conspiracy theories that are patently false.

    “Since the trucker convoy ended we’ve been bombarded. There’s been just a really sudden, dramatic spike in letters and many of them are from people who are deep into a conspiracy theory spiral,” Simons said.

    Politicians are used to getting messages and calls from people who are “unwell,” Simons said, but there’s something different about this campaign.

    ‘COVID has broken a lot of people’

    She said the COVID-19 pandemic and the resulting public health restrictions have wreaked havoc on mental health, priming people to believe claims circulating online.

    “I really do think COVID has broken a lot of people. There is a real delusional paranoia that runs through some of this mail. They’re writing to me about how this is a eugenics plot, a Masonic plot and at some point you go, ‘OK, this is really upsetting that people are preying on people who are already vulnerable.’ This is a thing that happens when people go through manic or schizophrenic episodes.”

    Beyond Taras, the failed People’s Party candidate, Simons said it’s not clear who’s behind the effort to convince people that S-233’s passage would have such sweeping consequences.

    LifeSite, a social conservative, anti-abortion website, has published a post on the legislation, linking Finance Minister Chrystia Freeland with the WEF. That website also quoted former U.S. presidential candidate Ron Paul who has claimed that the WEF wants to introduce global socialism through a universal basic income.

    Since the LifeSite post was published, Simons has heard from church and community groups that have sent in large batches of form letters.

    The WEF, a non-governmental organization that hosts discussions between world and business leaders at an annual summit in Davos, Switzerland, does not dictate what will or will not become law in any country.

    The ‘great reset’ lives on

    But Amarnath Amarasingam, a professor at Queen’s University, and one of Canada’s leading researchers on conspiracy theories, said the WEF is at the centre of so many COVID-related conspiracies because, in 2020, some its leaders talked about a “great reset” after the health crisis — a chance to evaluate how the global economy is structured after grappling with such a devastating pandemic.

    Amarasingam said some theorists see Davos as a place where evil elites “basically do their plotting and their criming.”

    “A lot of people think sinister elites manufactured the pandemic to bring about a ‘great reset,’ and make humans financially dependent on the government,” he said.

    “There is a concern that the vaccines and a basic income are all woven into a grand plan to basically make us robots, cyborgs that will listen to anything these billionaire elites tell us to do. They think programs like a basic income will take away financial independence and that that’s part of a broader plot by evil-doers so that they can eventually have their way with us.”

    Amarasingam said there’s nothing new about conspiracy theories but the pandemic has “pushed them into hyperdrive,” fuelling a movement of people willing to believe there’s a global movement to “enslave” humanity.

    ‘Closed ecosystems of thought’

    A noted decline in people’s trust in government, the press, academics and experts and public health authorities has made the situation worse, he said, while the advent of alternative social media platforms like Telegram has made conspiratorial material readily available.

    “These alternative platforms have seen insane growth. It’s created closed ecosystems of thought where people only trust what they hear from other people online. They’re trapped in their own echo chamber and they start to believe that everything outside of it is corrupted. There’s a growing proportion of people who just live in an alternative universe.”

    Amarasingam said people in these online forums are largely unaware of how the government operates — or how a bill is passed through Parliament — and those knowledge gaps “are easily filled with fantasy.”

    “It’s easy to see a sinister plot when you don’t actually understand how the government works. These people aren’t civics majors,” he said.

    __________________________________________

    ABOUT THE AUTHOR:

    J.P. Tasker is a senior writer in the CBC’s parliamentary bureau in Ottawa. He can be reached at john.tasker@cbc.ca.

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  • Congress Found An Easy Way To Fix Child Poverty. Then It Walked Away.

    By Amelia Thomson-DeVeaux

    See original post here.

    Imagine the federal government could lift millions of American children out of poverty with a single program. That program would help parents put nutritious meals on the table, pay for school expenses and even save for kids’ college — all with no negative impact on the economy.

    You don’t have to imagine. We had it just last year … and now we don’t.

    By nearly every empirical measure, the expanded child tax credit (CTC) — the policy passed in 2021 that gave parents a few hundred dollars per month for each child in their family — was a wild success, dramatically reducing child poverty and making it easier for families to buy food and pay for housing and utilities. In combination with other COVID-19 relief measures, particularly the stimulus payments that went out to Americans in April 2020, January 2021 and March 2021, the CTC helped buffer families against the economic upheaval of the pandemic.

    It’s rare that researchers can say with certainty that a program like the CTC actually worked. Politicians usually consider policies in an abstract, hypothetical way, knowing that a piece of legislation might not accomplish their aims. But by the time Congress was thinking about extending the CTC, there was a mountain of cold, hard data showing that this program did a lot to help children and families. 

    Yet that wasn’t enough to save it. The expanded tax credit ended in December 2021, and chances are low it will be renewed. That tells you all you need to know about which is more powerful in Washington — politicians’ biases or actual evidence.

    By the time the pandemic hit, reformers had been pushing for years for the U.S. to establish a universal allowance for families with children. Many other rich countries give some kind of blanket financial support to parents and, not coincidentally, those countries also have lower rates of child poverty. 

    But it took the ultimate upheaval — a global pandemic — to nudge American lawmakers into action. In the spring of 2021, Democrats in Congress transformed the CTC, an anti-poverty measure that’s been part of the tax code since 1997, into a kind of emergency child allowance. Unlike the original version, which parents received as a single lump sum when they filed their taxes, the expanded CTC was distributed in monthly payments. From July through December of last year, most parents of children under age 6 received $300 per month per child, and most parents of children between the ages of 6 and 17 received $250 per month per child. The new payment was more generous: Families received up to $3,600 per child per year under the expanded CTC, compared to only $2,000 under the original version. And while the original CTC was mostly available to middle-class families, many more parents were eligible under the expanded program.1

    Government programs are often glitchy when they start, but the fact that most families were eligible for the payments meant that they were fairly easy to administer. The IRS already had all the information it needed for anyone who had claimed children on their previous year’s taxes — no additional applications or forms to fill out. The payments went straight into recipients’ bank accounts or they got a check in the mail, with minimal fuss.

    And the money helped — a lot. Beginning July 15, the vast majority (88 percent) of families with children received a payment of either $300 or $250 per child. Researchers at the Columbia University Center on Poverty and Social Policy found that the July payment kept around 3 million children out of poverty. At the end of 2021, the researchers estimated that the program was keeping 3.7 million children out of poverty.

    “Families were living in very precarious economic circumstances,” said Megan Curran, one of the researchers on the Columbia team. “That $300 or $600 per month — it might not sound like much, but when you’re making very little, it can be enough to give you a financial cushion.”

    The reduction in child poverty was the big, headline-making finding. But the payments helped in other ways, too. Multiple surveys found that most parents spent the money on essential things like food, rent and bills.

    How families spent their child allowance payments

    Share of child tax credit recipients who spent their payments on various items and services, by income level.

    Low-income parents were especially likely to spend the money on basic needs. Several studies found that once the money started arriving, fewer families reported that they didn’t have enough to eat. “The most commonly reported expenditure was food,” Curran said. “After that, it was essential bills — these very basic things that households need.” But the money came in handy for other things, too. When the beginning of the school year rolled around, about one-third of parents who received a CTC payment spent at least some of it on school supplies. Another study found that most parents planned to save some of the money for a rainy day. Some said they would spend the money on tutors for their children — perhaps helping to offset some of the learning loss caused by over a year of school disruptions. The payments helped some families dig themselves out of debt or escape eviction.

    The findings were especially striking because there were no strings attached to the money. Parents could spend the payments however they liked. And despite politicians’ longstanding suspicion that if we simply gave people money, they’d run out to buy drugs or cigarettes, families were overwhelmingly likely to spend it in ways that directly benefited their children.

    Of course, it was possible that the expanded payments had drawbacks, too. For years, some economists had been concerned that a child allowance for all families — whether the parents had a job or not — would give some people a reason not to work. A study published a few months after the CTC expansion estimated that the move would prompt 1.5 million workers to quit their jobs and leave the labor force, canceling out some of the payments’ benefits. In an October opinion column, two co-authors of the study argued that based on their findings, extending the expanded CTC would do more harm than good.

    That doesn’t seem to be what happened. When other economists looked at real life data from when the monthly payments were going out, they found that only a small share of parents said they left their jobs. And those people were balanced out by another group of parents who started working after the expanded CTC went into effect — perhaps because they suddenly had enough money to pay for child care. 

    Researchers sliced and diced the data, looking for any negative effect on the economy. It wasn’t there. “​​Any way that we cut it, we just don’t see an impact on whether parents work,” said Elizabeth Ananat, an economics professor at Barnard College and a co-author of one of the studies. “And that’s in contrast with all the work on poverty and material hardship where we see huge, huge effects.”

    But the evidence didn’t seem compelling to the one person who controlled the expanded CTC’s fate: Democratic Sen. Joe Manchin.

    By the fall of 2021, when Democrats were pondering a renewal of the payments as part of a sprawling social policy bill, it was clear that it wasn’t going to get bipartisan support. That meant if one moderate Democrat defected, the expanded payments would expire at the end of the year. Manchin thought the payments were too broad. He didn’t think parents should be eligible unless they had a job, and he wanted a much lower income cap for parents to qualify. 

    There’s a certain logic to his reasoning — the payments shouldn’t discourage people from working, and it should only go to the neediest families. But experts told me that these changes wouldn’t actually translate into money better spent. A complicated formula for determining eligibility can keep the people who most need the money from getting it. And aside from the fact that parents weren’t leaving their jobs because of the payments, work requirements may be counterproductive. “It’s the equivalent of kicking someone when they’re down,” Ananat said. “You might have a sick kid and have to stay home for a day and lose your job. Then you can’t pay for child care to go out and interview for a bunch of new jobs.”

    Manchin didn’t agree. By the end of 2021, he reportedly told other senators that without strict limitations, parents would spend the money on drugs — despite a mountain of evidence to the contrary.

    The Democrats’ social policy bill died in the Senate in December, and the last round of the expanded payments went out to families that same month, with no sign of a renewal in sight.

    The impact of losing the money was as dramatic as gaining it. In January and February, families with children were more likely to say they were struggling to cover household expenses. Child poverty rose. Parents reported struggling to pay for diapers and child care. A Politico/Morning Consult poll conducted in February found that 75 percent of people who had benefited from the expanded CTC said that losing the money would affect their financial security.

    Meanwhile, researchers like Ananat were left standing in frustration on the sidelines, wondering how such a successful program had gone up in smoke. “The thing that’s so heartbreaking to me is that we were able to actually find out what the policy did,” Ananat said. “And now we have an answer. It just helps kids. That’s all it does. And then they just let it go.”

    The post Congress Found An Easy Way To Fix Child Poverty. Then It Walked Away. appeared first on Basic Income Today.

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  • Senator Paula Simons in Canada responds to the disinformation surrounding Bill S-233 for a basic income framework

    Senator Simons who was appointed to the Senate of Canada in 2018, after a long and distinguished career as one of western Canada’s most acclaimed journalists defends basic income framework.

    See original post here.

    Honourable senators, I rise today to speak to Bill S-233, An Act to develop a national framework for a guaranteed livable basic income. Rather, I rise today to speak to the viral misinformation and disinformation about this bill and to confront some of the near delusional paranoia circulating on social media about it.

    For weeks, our Senate email and voice mail boxes have been overwhelmed by thousands of messages from angry, frightened Canadians outraged by Bill S-233, or at least by the lies they have been told about Bill S-233. There are so many desperate letters sent to us by people who have been manipulated and terrified into believing outrageous conspiracy theories. There are letters from people who believe Bill S-233 to be a fascist plot, a communist plot, a Masonic plot, a eugenics plot, a Jewish plot, a plot by the World Economic Forum or the World Health Organization, a sinister scheme orchestrated by — your choice — Klaus Schwab, George Soros or Bill Gates, or the ever‑popular illuminati. Many believe Bill S-233 to be the first step on the path to one-world government, or the new world order or to a system of state social surveillance, such as the one the Chinese government in Beijing calls “social credit.” Others are convinced the bill contains provisions for digital ID or digital currency that will allow the government to track and control us all.

    This, my friends, is no accident. I believe there is an organized campaign afoot to spread destructive propaganda about Bill S-233, targeted online fear mongering specifically designed to terrorize frightened seniors and those with disabilities and to scare vulnerable Canadians into believing their pensions and disability benefits are about to disappear. It is a campaign purpose-built to erode public trust, not just in this government but in Canadian democracy itself.

    Take this tweet posted on March 11 by Peter Taras, a former Ontario candidate for the People’s Party of Canada:

    Bill S-233 is currently waiting for third reading in the SENATE, if passed it will be made law which means if you are not vaccinated you will not receive EI, CPP, OHS, Social Services or Pension that YOU PAID INTO.

    That post alone has been retweeted almost a thousand times, and pretty much every single word of it is untrue.

    Bill S-233 is not a government bill. It is not at third reading. And even if we were to pass it, we all know it would not become law, not right away. It would be sent to the other place for more debate and study.

    This bill absolutely does not make the payment of a guaranteed basic income contingent on your vaccination status. Indeed, under the terms of Senator Pate’s proposal, there would be no such type of social-virtue testing or qualification for the receipt of such an income at all. Nor would a basic income take the place of Employment Insurance, workers’ compensation insurance, the Canada Pension Plan, or any other company or private pension.

    Even if we passed Bill S-233, it wouldn’t create a guaranteed basic income.

    All the bill really does is call upon the government to consider how it might create a framework for how a possible future guaranteed basic income program might work. Nonetheless, Twitter and Facebook and Reddit and YouTube are filled with posts that repeat word for word the same falsehoods as the tweet I just read you.

    Many of the letters and phone calls we’ve received go much further than fears about pensions. Some express concern that once Canadians become dependent on a guaranteed basic income, the government would be able to leverage that dependency to force people to conform. For example, here is an extended excerpt from an email I received on March 16:

    I suspect that ‘a guaranteed livable basic income’ creates a dependency upon government and lays down a foundation for creating digital identities tied to bank accounts and all other government agencies, both federal and provincial. Over time, abusive, controlling powers would be assumed and invoked by dictatorial means. We would then be locked into a social credit system that is fascist, communistic and totalitarian, thereby erasing the standards of democracy, our Constitution, the Rule of Law, and our guaranteed Rights and Freedoms.

    An email from March 23 mined a similar vein:

    There will be more vaccines to take and other medical procedures the gov[ernment] wants you to undergo! If you don’t comply with just one of them, your account will be closed and you won’t be able to buy food! You won’t be able to do anything! Not even work.

    One recent email suggested Bill S-233 was part of what it called:

    . . . the sinister plan for humanity under a New World Order and One World Government, starting with John D Rockefeller’s Masonic Creed.

    The letter went on to link Bill S-233 to a long-term, worldwide plot that included the assassinations of Martin Luther King and John F. Kennedy.

    Other messages link Bill S-233 with transhumanism, a concern which is not, as I had first assumed, about gender identity but about an alleged plot to turn us all into bionic cyborgs. One said:

    The Transhumanist war has begun . . . .We are now experiencing the long awaited planning of the sociopathic elite, as Klaus Schwab unleashes a world domination plan with the intent of changing the face of humanity forever.

    Another correspondent wrote:

    Bill S-233 is just the beginning. We are losing our freedoms to a group of elites that want to depopulate and control mankind, enslave us to experimental transhumanism, and the removal of any Christian and Godly devotions.

    A common theme that runs through many letters is a persistent paranoia about the World Economic Forum, a belief that Justin Trudeau and Chrystia Freeland are subject to the control of German-Swiss economist Klaus Schwab. Many seem to believe that Schwab’s agents have infiltrated the government and that Schwab, who is best known for throwing parties for plutocrats in Davos, is somehow simultaneously both a communist and a Nazi.

    This excerpt from a letter I received March 10 is pretty typical:

    Nobody voted for Nazi Klaus Schwab. Nobody even knew he existed 2 years ago. He has NOTHING to do with Canada or any other country. Schwab holds a statue of Lenin in his office! This is NOT CANADA. We are NOT going BACK to NAZI GERMANY. Please see NUREMBERG CODE & TRIALS.

    Other letters accuse senators and the Senate of outright treason. An email I received March 6 stated:

    This is CANADA . . . not North Korea, not Russia, you are employees of the people! NOT EMPLOYEES OF THE WEF OR THE WHO.

    Just this afternoon — we probably all received the same email — was a letter that claimed the adoption of a guaranteed basic income would lead to the forced sterilization of Canadians of child-bearing age and the killing off of the elderly and the disabled.

    I must say that many other letters are not from conspiracy theorists or anti-vaxxers at all. They are simply and heartbreakingly heartfelt notes from ordinary Canadian seniors and relatives of seniors who truly believe that this bill will steal their CPP and private pensions.

    As senators, we’re all used to receiving angry letters and calls, but this campaign is qualitatively different. Three years ago my inbox was full of very angry mail about Bill C-69 and Bill C-48, but even when some of those concerns were hyperbolic and exaggerated, they were based on fact and on the actual content of those bills. The campaign against Bill S-233 is something entirely different. It is a shadow war concocted and orchestrated to protest something that doesn’t even exist.

    Some of you may worry that by reading these letters into Hansard I’m giving these theories undeserved attention, but we cannot ignore the elephant in the room. We must call out these myths and lies. Let us be clear: There is nothing in Bill S-233 that would require any Canadian to be vaccinated or medicated. There is nothing in Bill S-233 that relates to digital ID or digital tracking or digital currency. There is nothing in Bill S-233 that is in any way akin to the Chinese social credit surveillance model.

    Senator Kim Pate, who has spent her entire adult life advocating for the civil rights of the vulnerable, the marginalized and the forgotten, is not an agent of Klaus Schwab. She is not part of the globalist elite nor a Davos hobnobber. As her long record of public service attests, she is the last person who would ever want to see a single Canadian lose a pension or job, and that’s why her bill does nothing of the kind.

    I can attest personally that Senator Pate is not hell-bent on turning us all into cybernetic transhumans.

    Many of the concerns of our many correspondents are perfectly valid and based in fact. Some have argued that a guaranteed basic income would sap productivity and reward shirkers for doing nothing or lead to labour shortages. You might not agree, but that’s a perfectly rational critique.

    Some have argued that Canada’s COVID-battered economy could not afford such a program. I would counter that it is entirely possible that a well-designed program might actually save money, streamlining the number of social welfare support programs we have in this country. But, again, an argument about possible costs is perfectly reasonable.

    Some correspondents have raised legitimate questions about the bill, which I happen to share. The bill proposes to extend a guaranteed basic income to those 17 and up, and while I understand the logic of supporting emancipated teens or teens who have fled abusive families, most 17-year-olds don’t need a basic income. Nor can I agree with Senator Pate’s proposition to pay a guaranteed basic income to non-Canadians, such as temporary foreign workers. I have my own constitutional concerns as an Albertan about setting up such a federal income framework without the full cooperation, support and buy-in of the provinces, territories and First Nations.

    We also need to be mindful of inflationary pressures that a basic income might create, especially in overheated rental markets such as in Vancouver and Toronto.

    So yes, it is perfectly possible to have a good faith, rational debate about the pros and cons of a universal basic income, and the pros and cons of Senator Pate’s particular suggested model.

    But it is next to impossible to have that debate while Canadian citizens, especially seniors and those with disabilities, are being subjected to a relentless campaign of online psychological terrorism.

    I have tried to use Twitter and Facebook to dispel the myths about this bill. I have tried to answer letters from people who just seem honestly confused. One woman I will call Missy was so frightened by what she had heard about Bill S-233 that she told me she was thinking of leaving Canada. After I explained what Bill S-233 actually said, she thanked me.

    She wrote back:

    You have truly helped me. I will do my best to spread what you have told me. It’s scary, how convincing this can be. I admit I fell for it, and fed into it at time.

    She added, “It’s scary to live in fear every day.”

    And that, of course, is the point of this whole disinformation campaign: to create fear and distrust; to keep people scared and vulnerable; to erode our social contract, the social fabric and our confidence in our fellow Canadians, replacing it with suspicion bordering on paranoia.

    The purpose of this strategy isn’t to defeat Bill S-233, which has only the smallest chance of becoming a law anyway; no, it’s to whip up a hysterical frenzy to convince ordinary Canadians — decent, caring Canadians like Missy — that their political leaders and their political institutions are not to be trusted and then to trick and con ordinary, caring people just like Missy into sharing this fake information with their families, faith communities or their friends on Facebook.

    Rebutting such insidious campaigns is not easy. Although I did connect with Missy, I had less luck with a more recent correspondent. She wrote to me this weekend that she could not sleep over her fears that Canadian seniors would lose their pensions. When I tried to explain that Bill S-233 just wouldn’t do that, she accused me of gaslighting her and demanded that I never contact her again.

    In her excellent essay published recently by “The Line,” Conservative strategist Melanie Paradis coined a perfect phrase for those corrosive disinformation campaigns: she called them “thought scams.” She likened them to those Nigerian prince letters we all used to get that tried to con us out of our money. But these “thought scammers” aren’t primarily interested in getting rich. Instead, they are interested in stealing our faith and our trust. They are interested in stealing our Canada.

    If we, too, fall prey — if we start demonizing our political opponents, portraying them as treasonous and corrupt — then we forfeit our ability as senators to have any good faith debates over vital public policy questions.

    Today, my friends, I am asking you to join me in standing up to the “thought scammers.” I ask you not to give a wink, a shrug or a smirk when you see one of these “thought scams” spreading because you think it might help your side or your team in the short term. I ask all of us here to stand united today, not in full‑throated support of Bill S-233 but in united support of truth, reason and Canadian democracy itself. We in the Senate of Canada must stand as a bulwark against the tide of lies. We can and we must, my friends.

    Thank you, hiy hiy.The Hon. the Speaker pro tempore [ + ]Hon. Stan Kutcher [ + ]

    _________________________________________

    Thank you very much, Senator Kutcher. As a child of the Cold War, it seems strange to stand in the Senate of Canada and talk about Russian plots. It seems like something from a Cold War movie. I wouldn’t have thought that it was plausible until we saw the reporting in the United States about Russian actors manipulating Facebook to create mob mentalities, creating both fake Republican pages and fake Democrat pages and then setting the pages against each other.

    So it’s incumbent upon us, first of all, as citizens — all of us, not just senators — to practise what I call “social media hygiene.” Don’t share something if you don’t know where it’s from or what it is. The more outrageous and anger-provoking the post, the less likely it is to be true.

    I have sometimes seen people retweeting stuff they know is nonsense ironically or to call it out. Don’t do that because when you share things and interact with them, the algorithm doesn’t know you are “hate-sharing.” The algorithm just thinks, “Oh, people want to see that.” So be careful in how you use social media. We talk about safe sex. Well, practise safe tweeting.

    It’s also incumbent upon us — in an age in which so many people get their information filtered through social media platforms — to think about what the correct responsibility of those platforms should be and what our responsibility should be as legislators to ensure that — not that we’re censoring debate — we’re providing some kind of filter for the information so that all of the lies do not get the algorithmic juice to rise to the top.

    I think it’s fair to ask the major platforms, whether that’s Twitter, Facebook, YouTube or all the new ones that come along, what their protocols are to guard against malicious campaigns by foreign actors that are clearly designed to poison democratic debate in Western democracies.

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  • People no longer believe working hard will lead to a better life, survey shows

    A growing sense of inequality is undermining trust in both society’s institutions and capitalism, according to a long-running global survey.

    Original post here.

    The 2020 Edelman Trust Barometer – now in its 20th year – has found many people no longer believe working hard will give them a better life.

    Despite strong economic performance, a majority of respondents in every developed market do not believe they will be better off in five years’ time.

    This means that economic growth no longer appears to drive trust, at least in developed markets – upending the conventional wisdom.

    “We are living in a trust paradox,” said Richard Edelman, CEO of Edelman.

    “Since we began measuring trust 20 years ago, economic growth has fostered rising trust. This continues in Asia and the Middle East but not in developed markets, where national income inequality is now the more important factor.

    Fears are stifling hope, and long-held assumptions about hard work leading to upward mobility are now invalid.

    Growing ‘trust chasm’ between elites and the public

    Fifty-six per cent of the surveyed global population said capitalism in its current form does more harm than good in the world.

    Most employees (83 percent) globally are worried about job loss due to automation, a looming recession, lack of training, cheaper foreign competition, immigration and the gig economy.

    Fifty-seven percent of respondents worry about losing the respect and dignity they once enjoyed in their country.

    Nearly two in three feel the pace of technological change is too fast. Australia recorded one of the largest declines of trust in technology.

    Australians were most worried about losing their job to the gig economy, followed by recession, lack of training, and foreign competitors.

    The study also found a growing “trust chasm” between elites and the public that could be a reflection of income inequality, Edelman said.

    We now observe an Alice in Wonderland moment of elite buoyancy and mass despair,” he said.

    While 65 per cent of the worldwide informed public (aged 25-65, university-educated, in the top 25 per cent of household income) said they trust their institutions, only 51 per cent of the mass public (everyone else, representing 83 per cent of the total global population) said the same.

    “The result is a world of two different trust realities,” the report says.

    “The informed public – wealthier, more educated, and frequent consumers of news – remain far more trusting of every institution than the mass population.

    “In a majority of markets, less than half of the mass population trust their institutions to do what is right.

    “There are now a record eight markets showing all-time-high gaps between the two audiences – an alarming trust inequality.”

    Trust levels among the informed public in Australia were at 68 per cent, far higher than the 45 per cent recorded among the mass population.

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  • Report: Michigan families used monthly child tax credits on food, rent, and bills

    By: Nushrat Rahman

    Original Post: https://www.freep.com/story/news/local/michigan/2022/03/25/michigan-monthly-child-tax-credit/7134132001/

    An extra boost in child tax credits relieved financial stress for Michigan families who used the monthly payments on the basics — food, rent, child care, utility bills and clothing. 

    That’s according to a March report from the nonprofit Center for the Study of Social Policy about how temporary expansions in the child tax credit and child care helped Michigan families as they faced the economic uncertainty of the COVID-19 pandemic. 

    The child tax credit gave families flexibility, said Elisa Minoff, senior policy analyst at the Washington, D.C.-based group. 

    “For many it was giving them that cushion so that they could do some of the things that they had on their bucket list and hadn’t been able to do before,” such as family outings and signing kids up for extracurricular activities, Minoff said. 

    Last year, federal pandemic relief legislation bolstered the child tax credit, raising the annual benefit up to $3,600 for kids under 6 and $3,000 for those ages 6 to 17. 

    The payments reached 61.2 million children, including more than a million Michigan kids with an average monthly payment of $455 as of December, according to the U.S. Treasury Department. 

    There were 3.4 million more children in poverty in February compared with December, Columbia University’s Center on Poverty and Social Policy recently reported. 

    Michigan also received millions of dollars in child care stabilization grants.

    From September to December, the authors interviewed 15 Black and Latino families making between $0 to $55,000. The report also draws from a January survey of 529 parents or caregivers — with mostly low to moderate incomes — who were asked about their experiences with the child tax credit and child care. The survey was conducted with the Great Start Collaborative of Kent County and the United Way for Southeastern Michigan. 

    Among the findings in the report: 

    • A little more than half of Michigan families surveyed said they used the child tax credit on food and groceries. Meanwhile, 40% reported using the payments for their rent and mortgage; 36% for child or day care; 36% for phone, internet and utility bills, and 29% for shoes and clothing. 
    • Nearly 90% of Michigan families said the child tax credit made them feel “a little” or “a lot” less stressed about money, authors said. What’s more, Black and Latino families were more likely to say the payments were “a lot” more stress relieving than white families, with similar results for households making between $10,000 and $35,000. 
    • Half of parents with kids under 5 said they had a difficult time finding child care. Access to child care is linked to work. A staggering 80% of parents said child care-related challenges disrupted their ability to work; 78% said they reduced their work hours at some point, and 49% said they had to quit a job in the past because of child care issues. That disruption is more likely for those making less than $50,000. 

    The payments offered “much-needed breathing room in the budgets of Michigan families” and consistency, allowing some parents to stay in their jobs, go back to work or find jobs they wanted rather than needed to make ends meet, authors noted. 

    “Having additional income and stable and predictable income in a time of great uncertainty is hugely helpful to families to be able to pay for those basic costs, to ensure that they’ll be able to keep a roof over their head, keep food on the table, pay for child care, pay for those little extras that are enriching to families’ lives,” said Megan Thibos, director for economic mobility initiatives at the United Way for Southeastern Michigan. 

    However, these investments are temporary. The authors recommend a permanent expansion of the child tax credit and monthly payments. Legislation to expand it stalled. 

    “Families have been struggling with higher prices for a long time but this has only been exacerbated by … the recent rise of inflation,” which only highlights why it’s necessary for payments to continue, Minoff said. 

    There’s still time to claim the second half of the expanded child tax credits, Thibos said, but families need to file their taxes in time. The United Way for Southeastern Michigan can help those who need assistance. Go to getthetaxfacts.org or call the 211 help line. 

    _______________________________

    About the Author: Nushrat Rahman covers issues related to economic mobility for the Detroit Free Press and Bridge Detroit as a corps member with Report for America, an initiative of The GroundTruth Project. Make a tax-deductible contribution to support her work at bit.ly/freepRFA.

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  • Towards a progressive European basic income?

    An EU-wide scheme could address progressives’ concerns about proposals for universal basic income.

    By: DOMINIC AFSCHARIAN, VIKTORIIA MULIAVKA, MARIUS OSTROWSKI LUKÁŠ SIEGEL

    Original Post: https://socialeurope.eu/towards-a-progressive-european-basic-income

    As the Conference on the Future of Europe progresses, its interim reports indicate that the proposal for a more social Europe most frequently suggested by citizens is a European universal basic income (UBI). This poses a dilemma for progressives who promised to seriously consider the proposals from the conference but have valid concerns about such a scheme.

    They could flatly reject UBI but this would risk alienating citizens and feeding into scepticism about how seriously the European Union takes civic participation. Irrespective of whether progressives are in favour of UBI, by offering constructive visions they can stay on top of the debate.

    Striking patterns

    For the Foundation for European Progressive Studies, we conducted an analysis of UBI debates and reflected on the arguments for and against from a progressive political standpoint. We found some striking patterns.

    First, support for and opposition to UBI can be found within various political movements, irrespective of ideological background. Secondly, the arguments are much more complex than often assumed, given UBI is typically framed as a simple solution. Thirdly, the (limited) evidence suggests many likely positive effects of UBI, although it is by no means a silver bullet. Fourthly, some important arguments against UBI are predominantly concerns about policy design—careless implementation could have significant detrimental social effects.

    As UBI remains salient, it is all the more important then to develop a differentiated view of where and how it bears potential for progressive goals:

    • it must be supplementary, complementing rather than replacing the welfare state;
    • it must be redistributive, so that it acts as a net benefit for the less wealthy;
    • it must render individuals independent of market forces, and
    • it must foster European solidarity by giving the EU a tangible social dimension.

    If European progressives choose to embrace UBI, it should be at EU level, administered by the union and paid directly to every adult EU denizen each month. Minors’ caregivers should receive a reduced payout, with the remaining amount accruing to a European sovereign-wealth fund. Part of this accumulated residue would be paid out to individuals as a lump sum of starting capital once they reached maturity, with part retained in the sovereign-wealth fund to help fund the scheme over the long run.

    To discourage the wealthy from actually claiming UBI if they do not need it, starting at the national median income automatic payouts would be tapered at a linear rate with increasing income. In principle, everyone could still claim their UBI regardless, but unclaimed funds would be channelled into the sovereign-wealth fund. Such a universal right to income would be more in line with progressive ideals than a universal income paid out automatically without exceptions.

    Universal entitlement however sets this scheme apart from traditional means-tested approaches. It is key to overcoming issues such as discriminatory practices while avoiding problematic incentives due to cut-off points.

    Protection against poverty

    In the long run, a progressive UBI would need to protect citizens against poverty at 60 per cent of the respective national median income or 50 per cent of the mean income—whichever were higher. To keep the scheme feasible while incentivising upwards convergence and ensuring sufficiency, no national UBI should fall below 20 per cent of EU-wide median income or exceed 60 per cent of it. Responding to persisting concerns, progressives might embrace further differentiation at the local level.

    While the existing empirical research indicates that phenomena such as moral hazard associated with a UBI are smaller in magnitude than is often suspected, there are valid concerns about what one can extrapolate from it.

    One way of engaging with citizens’ proposals while taking the risks seriously would be to introduce the scheme at very low levels, raised slowly as increasing funds became available.

    This would also allow policy-makers to react swiftly with complementary schemes and regulations if employers were to abuse the scheme by wage-dumping. As such risks exist in any event and are being addressed through policy measures, it seems unlikely that a UBI could work without such policies or that the latter would stop working if a UBI were implemented.

    By implication, a progressive UBI would only be part of an encompassing mix of social policies and regulations, avoiding the overall system being reductively focused on monetary tools. Established welfare systems must remain in place from a progressive perspective, as UBI can never be a panacea but bears potential as a complement to means-tested schemes which closes otherwise unavoidable gaps.

    Even initially low levels of UBI would be a non-stigmatising social improvement, especially for low-income individuals. The only social policies which could be voluntarily replaced as a result would be monetary transfers whose value was by then fully covered by the EU UBI.

    Revenue sources

    For funding, we propose stepwise utilisation of various revenue sources. These would include designated EU resources, such as a financial-transactions tax, a carbon-dioxide tax, a green border tax, extended emissions trading, a sovereign-wealth fund, a digital-services tax, an EU-level value-added tax and a ‘robot tax’, as well as taxes on luxury goods, high incomes, inheritances, wealth and land value. In addition, national corporate-tax contributions could be partly hypothecated. 

    Could such funds not be used otherwise more effectively? Means-tested schemes are ostensibly more targeted than UBI but they suffer from stigmatisation and low uptake, as well as mistreatment and discrimination by case workers of the most vulnerable.

    And a UBI might be conceptually more appealing for progressives at EU level, since it would visibly strengthen the social acquis without directly competing with national welfare policies.

    Further issues, such as legal limitations in the EU treaties and political scepticism towards a UBI, must be taken seriously. In light of the Conference on the Future of Europe, however, progressives should engage with the debate in an appropriately nuanced way, by discussing more openly the conditions a European UBI would need to fulfil to be considered desirable.

    ________________________________

    About the Authors:

    DOMINIC AFSCHARIAN holds degrees in political science and economics from Heidelberg University and has worked with think tanks, consultancies and academic institutions. He is currently a research officer at the University of Tübingen.

    VIKTORIIA MULIAVKA os a researcher in the Polish Academy of Sciences and SWPS University of Social Sciences and Humanities.

    MARIUS OSTROWSKI is a Max Weber fellow at the European University Institute. His publications include Left Unity (2020) and the edited series of Eduard Bernstein’s Collected Works (2018-). He is deputy editor of the Journal of Political Ideologies,.

    LUKÁŠ SIEGEL recently completed a  PhD in philosophy, focusing on discrimination against people with disabilities, with a special interest in different models of disability.

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  • Making the enhanced monthly child tax credit permanent would have a 1,000% return on investment, study says

    For the second half of 2021, millions of families received monthly child tax credit checks. Implementing a permanent child allowance could bring in billions in value, according to a new paper but progress to revive even the expanded child tax credit is stalled or nonexistent.

    By: Juliana Kaplan.

    Original Post: https://www.businessinsider.com/making-child-tax-credit-permanent-1000-return-on-investment-report-2022-3

    As part of a sweeping 2021 economic recovery package, America marked a historic first: It distributed checks directly to parents every month for six months. Making a measure like that permanent could have a big pay-off for parents — and the economy, a new report says.

    As part of President Joe Biden’s American Rescue Plan, lawmakers expanded the child tax credit, and made it fully refundable, with millions of parents eligible to receive up to $300 per child every month. Those payments were a “godsend” for some, with the first payment alone keeping three million children out of poverty.

    Now, a new working paper from researchers at Barnard College, Columbia University, and the Open Sky Policy Institute looks at what might happen if Congress made those payments to parents permanent. 

    Even on a smaller scale, a cash infusion in the form of a child allowance would have big benefits for lower-income families.

    As a benchmark, researchers said that low-income families with one child that received a $1,000 increase in household income would see adult earnings for that child increase by $1,444. But “the biggest improvements are in children’s health in adulthood and longevity, representing over twice the initial investment.” Single parents also see a boost to their health to the tune of $816. 

    Broadly, they estimate that expanding the child tax credit permanently to a “near-universal” child allowance would cost about $97 billion annually. That would be counteracted, however, by “social benefits” that are worth around $982 billion yearly, including improved health and longevity for kids, which the researchers value at $424 billion. That leads to big savings for public healthcare and insurance premiums. Crime would also fall, lightening the taxpayer load. 

    It would also reap direct financial returns, the report said. All the kids whose families got checks would see future earnings go up by a total of $270 billion in their lifetime — leading to billions more collected in taxes. 

    All in all, taxpayers will save $135 billion if the credit is expanded, in addition to the benefits that parents and children reap.

    However, the likelihood of checks to parents becoming permanent anytime soon is low. Monthly checks for parents wound down in December, with 3.7 million kids falling back into poverty in January. 

    “The unforeseen things, like car repairs, you really don’t have that money saved up for that,” Alexandra Demskie, a mother of three in Arizona, told Insider’s Leo Aquino. “And the $250 really came in handy.”

    Democrats had been eyeing a one-year extension of the credit, which centrist Democrat Sen. Joe Manchin tanked with last-minute demands over paring down the checks. Manchin later pronounced the Build Back Better Act “dead.”

    In the meantime, Democrats aren’t pushing to restart the checks.

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  • 58 Percent of Single Parents Earn Less Than $31,000 a Year

    Millions of families are scraping by, barely, on half of what they need to keep food on the table and a roof over their heads.

    By: Devan McGuinness

    Original Post: https://www.fatherly.com/news/minimum-wage-one-third-less/

    A new study from Oxfam America, an anti-poverty advocacy group, highlights the reality that millions of people across the country earn less than $15 an hour — or about $31,000 a year if they work full time. The study also found that people who are disproportionately impacted by the low wages are people of color, women, and single parents. Currently, the federal minimum wage is $7.25/an hour.

    Released on Tuesday, the study shows that one-third of workers – or nearly 52 million people – earn an annual income of less than $31,200. This works out to be less than $15 an hour, and it is disproportionately true for women and people of color in the workforce.

    “It’s shameful that at a time when many US companies are boasting record profits, some of the hardest working people in this country — especially people who keep our economy and society functioning — are struggling to get by and falling behind,” said Kaitlyn Henderson, the study’s author, and senior research adviser at Oxfam America.

    47 percent of Black workers and 46 percent of Hispanic workers made less than $15 an hour, compared to 25 percent of white workers. There was a similar divide when the study looked at female workers versus male workers, with 40 percent of females making less than $15 an hour compared to 24 percent of male workers.

    When it comes to families, the study shows that 58 percent of single parents are among the group making less than $15 an hour. Many are making minimum wage. The federal minimum wage is $7.25 per hour. And that pay rate has been stuck there since 2009, while inflation and the cost of living have steadily, and then rather sharply in the last few months, risen for decades.

    This puts single parents in a vicious cycle of working full-time hours or juggling more than one job just to put food on the table and a roof over the head for their kids – and often still falling short each month. Though the minimum wage is different in many states (California’s minimum wage is $14 an hour, for example, while Louisiana’s is $7.25) this issue spans the entire country. Millions of people aren’t being paid enough money to be able to rent an apartment or afford where they live. Some parents are skipping meals and barely scraping by.

    In the U.S., the childhood poverty rate is one of the highest among developed countries at 17 percent. This works out to be every one in seven children. Children are the poorest group in the United States.

    That’s a lot of families struggling when raising federal minimum wage alongside expanding other aspects of the social safety net, like reinstating the Child Tax Credit or finally passing paid leave, for example, could do so much good. And while the Biden administration is attempting to push through a federal minimum wage increase to $15 per hour, it’s been squashed at every turn.

    The studies and research are clear: higher wages help families thrive and it saves lives. Raising the minimum wage would help bring that one-third of workers — largely single parents, largely Black and Latino workers — into a financial world where they can live more stably and sustainably.

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  • Carbon dividend could eradicate extreme poverty, economists say

    Proceeds from tax would be paid out as dividend, incomes for most people overall

    By: Jon Stone.

    Original Post: https://www.independent.co.uk/climate-change/news/carbon-tax-dividend-poverty-b2040618.html

    At a UK level the tax and divided scheme would benefit 70 per cent of the population, with the top 20 per cent effective contributors to the scheme.

    People would be charged more activities like burning fossil fuels or buying polluting products, but would also be given a regular income in the form of the dividend from the tax.

    Under the proposals, the costs of driving 1000km with an average petrol car would increase by £19, while the costs of a high-end smartphone would increase by around £8.70.

    But for most people these costs would be offset by the dividend payment they got out of the scheme, with only those biggest polluters paying more than they get out.

    Economists have long discussed a carbon tax as a means of getting people to change their behaviour, but the new analysis –based on World Bank Data – shows how it could also redistribute wealth if properly constructed.

    It is not clear how such a scheme could be introduced worldwide at the same time, but the authors of the report say time is running out to stop runaway climate change and that leaders need to get their act together.

    It is hoped that the scheme encourage people to make less polluting choices while maintaining their livelihoods, a problem with some approaches to climate action.

    Some UK right-wingers like Nigel Farage are campaigning against reaching net zero carbon, arguing that it will impose too many costs.

    Scientists say reaching net zero greenhouse gas emissions by 2050 at the latest is a requirement to avert catastrophic climate change in the coming decades.

    The UK’s Committee on Climate Change has said investment in green energy the best way to bring down bills and that new fossil fuel drilling will not help.

    Philipp Frey, co-author of the paper, said the dividend pay-out component was “crucial” so that the tax did not hit the poorest.

    “A carbon tax and dividend scheme would constitute a massive economic incentive towards greening the economy, driving out the consumption of carbon-intensive goods while maintaining livelihoods”, he said.

    “This report makes a compelling case for governments to look at taxing the rich to help save the planet from climate change and tackle poverty rather than making ordinary people pay for the climate crisis.

    “We don’t have long left to tackle climate change, so leaders across the world need to urgently look at proposals that tax carbon at consumption. The dividend component is crucial in order to maintain and improve livelihoods whilst we transition away from a carbon-centered society.”

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  • Australian Greens propose ‘liveable income guarantee’

    By: John Quiggin.

    Original Post: https://theconversation.com/the-greens-liveable-income-guarantee-is-a-serious-idea-the-major-parties-wont-touch-yet-179573

    The Australian Greens have lobbed a large rock into the placid pool of economic policy by announcing a proposal for a “Liveable Income Guarantee”.

    The policy would increase all income support payments – for those looking for work, studying full-time or unable to work because of age, disability or caring responsibilities – to A$88 a day (about $32,000 a year) from July 2023.

    This payment level is based on the poverty line calculated by the Melbourne Institute. Increases to all payments would be indexed to changes to the poverty line. The policy would also scrap mutual obligation programs such as “work for the dole” and relax eligibility restrictions.

    Currently welfare payments vary widely, with the age pension for a single person being about $70 a day, while JobSeeker is about $44 a day.

    This is the first significant economic policy in the undeclared campaign for the next federal election campaign. Up to to this point it looked like there wouldn’t be much to talk about.

    Apart from some sweeteners carefully targeted at marginal seats and voting blocs, and small-scale initiatives like Labor’s social housing program, the only significant new policy from either major party likely to follow the election is the “Stage 3” tax cuts legislated under the Turnbull government.

    These cuts are supported by both the government and the opposition. Both major parties have also committed to “budget repair”, a euphemism for expenditure cuts, but are unlikely to provide any details until after the election.

    COVID-19 changed the landscape

    The Greens’ plan shares its name, and many of its design features, with a proposal put forward in July 2020 by Tim Dunlop, Elise Klein and myself.

    We proposed this after the massive expansion of the JobSeeker program to deal with COVID-19 demonstrated Australia did have the resources to eliminate most sources of poverty when it was considered necessary to do so.

    We argued a liveable income guarantee would be an ideal way to make the achievements of JobSeeker permanent.

    The Greens’ policy differs from our 2020 proposal in two main respects.

    First, it is more generous, raising all benefits. The Parliamentary Budget Office has calculated this will cost about $43.7 billion in the first year, and $44.9 billion in the second.

    On the other hand, we proposed expanding payment eligibility to people engaged in volunteering, community projects and artistic and creative activity. The Greens’ proposal maintains the existing set of benefit categories.

    How to pay for liveable welfare payments

    As debt and deficits have faded as a political point-scoring issue, the idea that all new spending programs need to be matched with other cuts or extra revenue has become less compelling.

    But resources used for one public program can’t be used for other programs, or for private expenditure. So it’s important to ask what kinds of measures could offset the call on public resources proposed in the liveable income guarantee.

    The option with the biggest impact would be to cancel or defer the Stage 3 tax cuts, which will cost an estimated $18-20 billion a year. That would offset nearly half the money spent on the liveable income guarantee.

    The Greens have also pointed to tax measures they have previously proposed, including a billionaires tax and a corporate super-profits tax.

    It has always hard to estimate how much revenue such measures would collect, given the capacity of wealthy individuals and corporations to rearrange tax affairs.

    On the other hand, with improved global cooperation on tax, thanks mainly to initiatives from the OECD, there is more capacity to make billionaires and large corporations pay a fairer share of the costs of the society that supports them.

    Another source of offsets could arise from what used to be called “tax expenditures” and are now referred to more obscurely as tax benchmark variations. These are tax concessions or exemptions applying to particular activities or classes of taxpayer.

    These total about $150 billion a year according to the latest Treasury estimates. The biggest elements are concessions on capital gains tax and superannuation.

    A policy for serious debate

    The Greens proposal would greatly improve the position of millions of Australians on low incomes at the expense of reducing the disposable incomes and wealth of the well-off, with a particular impact on the very rich.

    Barring a complete revolution in Australian politics, there’s no chance the next election will lead to such a result, or even a serious move in that direction.

    It is a striking commentary that the Greens’ Liveable Income Guarantee will be rejected by a government led by Scott Morrison, a self-declared conservative, and also by Anthony Albanese, a leader from the Labor Party faction still sometimes called the “socialist left”.

    It has always hard to estimate how much revenue such measures would collect, given the capacity of wealthy individuals and corporations to rearrange tax affairs.

    On the other hand, with improved global cooperation on tax, thanks mainly to initiatives from the OECD, there is more capacity to make billionaires and large corporations pay a fairer share of the costs of the society that supports them.

    Another source of offsets could arise from what used to be called “tax expenditures” and are now referred to more obscurely as tax benchmark variations. These are tax concessions or exemptions applying to particular activities or classes of taxpayer.

    These total about $150 billion a year according to the latest Treasury estimates. The biggest elements are concessions on capital gains tax and superannuation.

    A policy for serious debate

    The Greens proposal would greatly improve the position of millions of Australians on low incomes at the expense of reducing the disposable incomes and wealth of the well-off, with a particular impact on the very rich.

    Barring a complete revolution in Australian politics, there’s no chance the next election will lead to such a result, or even a serious move in that direction.

    It is a striking commentary that the Greens’ Liveable Income Guarantee will be rejected by a government led by Scott Morrison, a self-declared conservative, and also by Anthony Albanese, a leader from the Labor Party faction still sometimes called the “socialist left”.

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  • $400 universal tax rebate to afford higher gas prices proposed in California

    A group of Democratic state lawmakers on Wednesday called for sending a $400 rebate to every California taxpayer to help soften the blow of the recent surge in gasoline prices. |

    By: Matthew Fleischer.

    Original Post: https://www.sfchronicle.com/opinion/openforum/article/California-wants-to-include-rich-people-in-its-17009761.php?t=9c75f76adf

    On Wednesday, a group of Democratic state lawmakers unveiled a plan to give Californians a $400 tax rebate check. Their stated intention was to help consumers defray the rising costs of gas. But, unlike the gas tax vacation proposals being floated across the country, or Gov. Gavin Newsom’s recently proposed stimmy just for car owners, this check will go to every Californian, including those who don’t own cars.

    This is a good thing. Gasoline isn’t the only consumer item impacted by inflation, the war in Ukraine and other global chaos.

    If adopted, bus and bike riders will also have some change in their pockets to spend on food or rent or whatever else they need help with.

    And yet this idea isn’t without controversy. Grumbling is already starting to rise that the rebate includes checks for wealthiest among us — who clearly don’t need the money.

    Save the rage, however. A universal check is also a good and progressive thing.

    Means testing to ensure that only the neediest people get access to government benefits is flawed for a variety of reasons. Mainly because it’s an expensive and time-consuming waste of money.

    A 2011 Center for Economic Policy and Research study found that means testing of a federal disability program constituted 1.7% of the cost of the program. Using that metric, implementing a means test on California’s $9 billion rebate would cost nearly $153 million.

    For context, that’s about how much the state spends to ensure safe drinking water quality each year.

    Moreover, means testing sets arbitrary thresholds of need. Consider last year’s Golden State Stimulus program, which gave checks to individuals earning less than $75,000 per year.

    Why does someone who makes $75,000 deserve a check while someone who makes $75,001 does not? There’s clearly no legitimate rationale for government intervention to elevate one middle-class person’s income above the other. And doing so anyway is hardly fair.

    Yes, a $400 universal rebate might seem like it’s giving rich people a handout they don’t need. But, let’s be clear, the wealthy people who receive said $400 check pay far more in taxes then they’re getting back from this program. In aggregate, in cutting this check, the state would be taking money from wealthier people and giving it to those who earn less.

    Moreover, means testing sets arbitrary thresholds of need. Consider last year’s Golden State Stimulus program, which gave checks to individuals earning less than $75,000 per year.

    Why does someone who makes $75,000 deserve a check while someone who makes $75,001 does not? There’s clearly no legitimate rationale for government intervention to elevate one middle-class person’s income above the other. And doing so anyway is hardly fair.

    Yes, a $400 universal rebate might seem like it’s giving rich people a handout they don’t need. But, let’s be clear, the wealthy people who receive said $400 check pay far more in taxes then they’re getting back from this program. In aggregate, in cutting this check, the state would be taking money from wealthier people and giving it to those who earn less.

    In fact, a $400 rebate check for all Californians would almost certainly be the biggest experiment yet this country has seen toward universal basic income. Let’s hope we see more attempts like it.

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  • UNDP Suggests Temporary Basic Income in Ukraine as 90% of Population Faces Poverty

    By: Stephanie Nebehay.

    Original Post: https://uk.news.yahoo.com/ninety-percent-ukrainian-population-could-041213757.html?guccounter=1.

    Nine out of 10 Ukrainians could face poverty and extreme economic vulnerability if the war drags on over the next year, wiping out two decades of economic gains, the U.N. Development Programme (UNDP) said on Wednesday.

    Achim Steiner, UNDP Administrator, said that his agency was working with the Kyiv government to avoid a worst case scenario of the economy collapsing. It aimed to provide cash transfers to families to buy food to survive and keep them from fleeing while propping up basic services.

    “If the conflict is a protracted one, if it were to continue, we are going to see poverty rates escalate very significantly,” Steiner told Reuters.

    “Clearly the extreme end of the scenario is an implosion of the economy as a whole. And that could ultimately lead to up to 90% of people either being below the poverty line or being at high risk of (poverty),” he said in a video interview from New York.

    The poverty line is generally defined as purchasing power of $5.50 to $13 per person per day, he added in a video interview from New York. Before Russia launched its invasion on Feb. 24, an estimated 2% of Ukrainians lived below the $5.50 line, he said.

    Ukraine’s top government economic adviser Oleg Ustenko said last Thursday that invading Russian forces have so far destroyed at least $100 billion worth of infrastructure and that 50% of Ukrainian businesses had shut down completely.

    “We estimate that up to 18 years of development gains of Ukraine could be simply be wiped out in a matter of 12 to 18 months,” Steiner said.

    CASH TRANSFERS

    UNDP is looking at “tried and tested” programmes that it has used in other conflict situations, he said.

    “Cash transfers programmes particularly in a country such as Ukraine where the financial system and architecture is still functional, where ATMs are available, a critical way in which to reach people quickly is with cash transfers or a temporary basic income,” he said.

    The logistical challenges were significant but “not insurmountable”, he said.

    “Clearly some of the recent announcements by World Bank and International Monetary Fund in terms of credit lines and funding that is being made available will obviously assist Ukrainian authorities to be able to deploy such a programme,” he said.

    The UNDP report said that an emergency cash transfer operation, costing about $250 million per month, would cover partial income losses for 2.6 million people expected to fall into poverty. A more ambitious temporary basic income programme to provide $5.50 per day per person would cost $430 million a month.

    Ukraine’s economy is expected to contract by 10% in 2022 as a result of Russia’s invasion, but the outlook could worsen sharply if the conflict lasts longer, the IMF said in a staff report released on Monday.

    The World Bank on Monday approved nearly $200 million in additional and reprogrammed financing to bolster Ukraine’s support of vulnerable people. The funding comes on top of $723 million approved last week and is part of a $3 billion package of support that the World Bank is racing to get to Ukraine and its people in coming weeks.

    Steiner emphasized Ukraine’s importance to the economies of other nations, especially a group of African nations who he said get a third of their wheat supplies from Ukraine and Russia.

    “We are also trying to stabilise an economy that is for 45 African nations, least developed countries, the breadbasket for them,” Steiner said.

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  • Opinion: A Year After Biden’s American Rescue Plan, Kids Are Falling Back Into Poverty. Congress Is To Blame.

    In December, the child tax credit lifted nearly 4 million children out of poverty. If it had been extended through 2022, it would have cut child poverty nearly in half.

    By:  Natalie Foster.

    Original Post: https://www.huffpost.com/entry/child-tax-credit-extension_n_6230ecb1e4b0fe0944dcafa8

    During the darkest days of the pandemic, Congress stepped up and provided people with the stimulus checks they needed to get by — and that our economy needed to stay afloat. This experiment — giving people cash to spend on food, fuel, rent and other basics — showed the public that they could trust the government to be there for them during hard times.

    As we approach the one-year anniversary of the American Rescue Plan, the progress we’ve made is in jeopardy.

    Last March, President Joe Biden and Democrats expanded the wildly popular child tax credit program, providing working families with up to $3,600 annually for every kid and transforming the benefit into an automatic monthly payment instead of a once-a-year line item on your tax return. President Biden also reversed the previous administration’s discriminatory restrictions on who received the payments, giving half of Black and Latinx children access to this vital support for the first time.

    Like the stimulus checks, expanded child tax credit payments were overwhelmingly successful.

    In December, the monthly cash assistance program lifted nearly 4 million children out of poverty. Hunger fell by more than 25%. If the tax credit had been extended through 2022, it would have cut child poverty nearly in half.

    Though Democrats hoped to extend the monthly payments for another year as part of the Build Back Better Act, they lacked enough votes for the legislation to pass — thanks in part to the resistance of Sen. Joe Manchin of West Virginia. The loss of these payments has had a devastating impact on families. A new study from Columbia University shows that 3.7 million children have fallen back into poverty in just two months; a staggering 10 million children are at risk of falling back or deeper into poverty.

    The monthly child tax credit showed that the government is competent and can do big things. Just months after Congress created this entirely new program, the IRS implemented it and distributed payments to families of nearly 60 million children in July. Because of its experience with stimulus checks, the IRS was able to distribute the payments automatically to most families. More work was needed to ensure other families signed up, but the IRS avoided the chaotic rollout that naysayers predicted.

    In addition, at a time when all families are facing increased costs at the fastest clip in four decades, the child tax credit can offset rising prices on essential goods.

    Unfortunately, just as both inflation and the omicron variant surged, Congress allowed the child tax credit to expire. Parents who thought the government had thrown them a lifeline found it cruelly ripped away. Data from the Census Bureau estimated that nearly 9 million people had to call out sick last month due to omicron, many of whom likely had no access to paid leave or sick time and simply lost out on their wages. But instead of a monthly payment on Jan. 15, families impacted by the surging pandemic received nothing. And these parents have continued to get nothing as inflation rose to the highest point in 40 years.

    The ramifications of allowing the child tax credit to expire are starting to be seen both in parent’s pockets and in the data. According to a recent report from the Columbia Center on Poverty and Social Policy, the child poverty rate rose 41% from December 2021 to January 2022, with the largest percentage point gains in poverty falling on Black and Latinx children. Last June, right before the first batch of payments, the child poverty rate was a little under 16% and almost immediately in the next month that rate fell to nearly 12%.

    The absence of child tax credit has resulted in the highest number of children living below the poverty line since December 2020.

    Outside the numbers, the expiration of the child tax credit will continue to perpetuate the pervasive notion that government doesn’t work, and that politics is a waste of time. Pew Research puts Americans’ trust in government at around 20% — a number that’s been that low for a decade. It’s easy to see why.

    Repairing that damage and getting people to believe in America again is essential, and it was central to Biden’s 2020 pitch: If you can demonstrate that the government can actually help people, you can start to restore faith in institutions. You start by doing things that people will see and feel in their everyday lives.

    Early data suggests that child tax credit was already inching us toward repairing trust. As a recent Data for Progress survey revealed, families receiving the payments were 4% more likely to approve of Biden and Democrats. What’s remarkable is this effect was consistent across party lines, even among Trump voters. Seventy-seven percent of parents who were receiving the child tax credit — tens of millions of people — supported it.

    Among communities of color, there might’ve been even more reason for optimism. According to Pew Research, trust in government is up 8% among Hispanic people this year. For the Black community, it’s more than doubled: from 15% to 37%. One must believe this hopeful direction hangs in the balance.

    Just imagine explaining to a parent who came to rely on the monthly tax credit payment why the checks were cut off. You can toss out all the “pay-fors,” “parliamentarians,” “filibusters,” and “Byrd baths” you want. The only thing that matters is that the government screwed up something in their life. And that’s all they’ll remember when it comes time to vote.

    The project of restoring the American people’s faith in government needs Sen. Manchin and the White House to find a path forward. You start by passing a bill that invests directly in people. You open the doors and invite more people to participate in democracy. You make good on your promises.

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  • New Mexico Passes Its Own Child Tax Credit

    Residents of New Mexico should expect Child Tax payment to begin again in the next few days. Will other states follow them?

    By:  Stephen Silver.

    Original Post: https://nationalinterest.org/blog/politics/new-mexico-passes-its-own-child-tax-credit-201133.

    The expanded child tax credit may have expired at the end of last year, but with a possible extension of the credit very uncertain, some states have considered their own new child tax credits. This includes Alabama, Vermont, Michigan, and other states, which have either passed a new child tax credit or advanced it to some degree in their legislatures. 

    The latest state to follow is New Mexico, with Gov. Michelle Lujan Grisham signing legislation this week that includes a refundable child tax credit and other benefits for citizens. According to a fact sheet distributed by the governor’s office House Bill 163 creates a new refundable child tax credit of up to $175 per child and eliminated the income tax on Social Security. Other provisions include a one-time income tax rebate, a three-year income tax exemption for armed forces retirees, and a $1,000 refundable income tax credit for full-time hospital nurses. 

    The Albuquerque Journal reported last month that an initial proposal had the child tax credit as high as $350 per child. The same newspaper reported this week that families in New Mexico are struggling without the monthly federal child tax credit. 

    “New Mexicans, like all Americans, are feeling the pressure of rising costs,” Gov. Lujan Grisham said. “Coupled with the state’s robust current financial situation, there is no reason we shouldn’t be taking every action to cut costs for New Mexican seniors, families, and businesses – and today, we are doing just that.”

    Legislative leaders praised the child tax credit provision specifically. “New Mexico is leading the way with innovative tax policies that support our working families,” House Majority Leader Javier Martínez said in the governor’s statement. “Our Child Income Tax Credit will make it easier for struggling families to make ends meet in every community across the state.”

    The White House this week released a state-by-state analysis of tax relief that had been distributed from the American Rescue Plan Act, which passed about a year ago. In New Mexico, 420,000 children received the child tax credit, while 134,000 workers benefited from the expansion of the earned income tax credit. 

    As for the federal child tax credit, could it make a comeback? 

    A report this week stated that Sen. Sherrod Brown (D-OH) and Sen. Mitt Romney (R-UT) are engaged in bipartisan talks to bring back the credit in some form. Brown had been pushing for the child tax credit for several years before it was enacted, while Romney proposed a “child allowance” of his own in 2021. 

    ___________________________________

    About the Author: Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

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  • Britons to get 350 pounds a month to open homes to Ukraine refugees

    By: Andrew MacAskill

    Original Post: https://news.yahoo.com/brits-350-pounds-month-open-001431626.html

    (Reuters) -Britain will pay people to open their homes to Ukrainians fleeing the Russian invasion as the government moves to deflect anger over its response to the fastest-growing refugee crisis in Europe since World War Two.

    The new scheme called “Homes for Ukraine” will let refugees from the war come to Britain even if they do not have family ties, the government said on Sunday.

    Britain will pay people 350 pounds ($456) a month if they can offer refugees a spare room or property for a minimum period of six months.

    Prime Minister Boris Johnson has sought to portray Britain as helping lead the global response to the Russian invasion – which Moscow calls a “special operation” – but his government has faced criticism over delays in accepting refugees.

    Lawmakers from all the main political parties have attacked the government’s insistence that Ukrainians seek visas and biometric tests before arriving in Britain, saying this prioritised bureaucracy over the welfare of those fleeing war.

    Under the new scheme, members of the public, charities, businesses and community groups should be able to offer accommodation via a web page by the end of next week, the government said.

    “The UK stands behind Ukraine in their darkest hour and the British public understand the need to get as many people to safety as quickly as we can,” Michael Gove, the minister for housing, said in a statement.

    “I urge people across the country to join the national effort and offer support to our Ukrainian friends. Together we can give a safe home to those who so desperately need it.”

    Anyone offering a room or home will have to show that the accommodation meets standards and they may have to undergo criminal record checks.

    In an interview on Sky News, Gove estimated tens of thousands of Ukrainians could come to Britain via this route, with the first arrivals likely in around a week’s time.

    Gove said local authorities would be given just over 10,000 pounds per Ukrainian to help fund the additional demands on public services, with extra funding for school-age children.

    The number of refugees fleeing Ukraine could rise to more than 4 million, double the current estimates of about 2 million, the UN’s Refugee Agency said last week. Britain has so far issued visas to around 3,000 Ukrainians.

    ($1 = 0.7671 pounds)

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