While thinking about economic issues for the coming years, we should remember that Vice Presidential candidate Kamala Harris in May proposed a historically generous bill for a Universal Basic Income.
Under the Harris initiative, the pandemic could be used to launch a program that would extend much further into the future. There has been discussion that a Biden-Harris administration coupled with a Senate majority would bring about such an outcome.
Harris’ legislation would provide $2,000 for most individual Americans through the pandemic and for an unspecified future—maybe forever. This means that a family of five could receive $10,000 a month.
AEI’s Matt Weidinger breaks down the numbers:
How much would households receive each month? Each US resident would receive $2,000 per month, subject only to household income limits (see below) and a cap of three dependents per household. That means households of five (mom, dad, and three kids) would generally receive $10,000 per month, while a single parent with two kids would receive $6,000 per month, and a single adult would receive $2,000 per month.
How long would payments continue? The legislation calls for payments beginning in March 2020 and ending three months after the COVID public health emergency ends. A summary of Harris’ plan also says payments would be “retroactive to March,” resulting in massive initial back payments — as high as eight months times $10,000 or $80,000 per household if the legislation were implemented in October. And since payments would flow to the vast majority of households, there would be enormous political pressure for extending the public health emergency — or continuing payments beyond its end.
The most important question is how much would the Harris UBI plan cost:
How much would this cost? The Harris plan doesn’t mention offsets, and an official score is not available. But if we conservatively assume 75 percent of 330 million US residents would be eligible for $2,000 per month payments (and ignore others eligible for partial payments), the cost would be a staggering $500 billion per month, or $6 trillion per year — far exceeding prior federal spending on all other programs combined, and all added to the deficit.
The massive Obama-Biden stimulus was $700 billion. The cost of this plan for two months significantly exceeds the entire Obama-Biden bailout. Taxes to support this would be massive (for as long as it could even be supported). This plan could lead to an America that funnels massive tax revenue into modest stipends that make us all dependent and take so much out of the economy that entrepreneurship and ambition are impossible.
I urge you to read Weidinger’s breakdown of the numbers.