“Since 1975, politicians have built huge portions of the American safety net — like the child tax credit (CTC) — around the idea that excluding the poorest Americans from government assistance will motivate them to climb out of deep poverty on their own and get a job.
This long-standing bipartisan consensus is manifest in the twin ideas of work and income requirements. Work requirements are simple: You either have a job or you don’t, and that binary is what determines whether you’re eligible for a handful of welfare programs.
Income requirements are a little wonkier. They stipulate that anyone without any income will receive no benefits. Only after earned income surpasses a specified level do benefits begin kicking in — which is where we get another dry name: “phase-ins.””
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“The consensus excluding the poorest Americans from some forms of government assistance through phase-ins held until President Joe Biden’s 2021 American Rescue Plan. Its anti-poverty centerpiece was to cut phase-ins from the existing CTC and crank up the payment, creating what’s known as the expanded CTC.
The results were historic. Over the course of 2021, child poverty was cut nearly in half, and the long-running fear at the heart of the American welfare system — that unconditional aid would discourage work — never came to pass.
Then, to the dismay of advocates and recipients alike, Sen. Joe Manchin (D-WV) blocked the Democratic Party’s effort to make the expansion permanent, fearing, among other familiar concerns like the cost, that recipients would just buy drugs (the data shows that recipients spent the money on food, clothes, utilities, rent, and education). Come 2022, phase-ins returned to the CTC, approximately 3.7 million children were immediately thrust back into poverty in January, and the rest of the year saw the sharpest rise in the history of recorded child poverty rates.”
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“Now that we have real-world evidence from a nationwide, year-long experiment, the expanded CTC’s success should ignite efforts to roll back phase-ins across the board. That also means cutting them from the CTC’s sister program, the earned income tax credit (EITC), which phases in as a supplement to wages for low-income Americans and helps about 31 million Americans.
The expanded CTC is estimated to have reduced child poverty rates anywhere from 29 percent to 43 percent, with the vast majority of that drop attributable to removing phase-ins. Extending that success to include the EITC would cut child poverty by an estimated 64 percent.”
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“Winship was unsurprised that his fears of parents choosing to work less didn’t show up during the expanded CTC. It only lasted for one year and was recognized all the while as a temporary program. “These kinds of behavioral effects take time to set in,” he writes. In the long-term, after a decade or a generation of the program being in place, that’s when he would expect to see, as Oren Cass, executive director of the conservative think-tank American Compass, put it, “communities in which labor-force dropout is widespread and widely accepted.””
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“Long-term speculation, however, can go both ways. The generational impacts of unconditional transfers could just as well lead to long-term investments in education and skills training, support entrepreneurship, and actually raise productivity and economic activity in the long run, all of which would boost, instead of wipe out, poverty reduction.
In 2018, researchers from Washington University in St. Louis estimated that childhood poverty costs the US $1.03 trillion per year, or 5.4 percent of the GDP. They found that every dollar spent on reducing child poverty would save the public 7 dollars from the economic costs of poverty.
Results from basic income pilots across the US also stand in contrast to Winship’s concern. “Our moms get the guaranteed income and not only do they continue to work, they level up their work,” Nyandoro, who runs the nation’s longest-running guaranteed income program, told me. “They’re able to move from jobs to careers. They’re able to go back to school. They’re able to get out of debt.”
The most recent evidence in favor of phase-ins Winship cites is a 2021 paper by a group of economists from the University of Chicago, led by Kevin Corinth and Bruce Meyer. It predicted that making the CTC expansion permanent would spark a 1.5-million-person exodus from the labor force. As analysts were quick to point out, however, the paper is based on a model that already assumes unconditional cash reduces work. Predicting work disincentives using a model that already assumes them tells us nothing about whether the assumption itself is tethered to reality.
Corinth and Meyer have since responded to criticism of their work disincentive assumptions, arguing that they fall well within the range used in other studies. These academic debates will continue, but in the meantime, where should the burden of proof lie?
Eliminating phase-ins from the CTC was a massive anti-poverty success and had no short-term negative employment effects. Recipients spent the extra few hundred bucks on necessities, from food and clothing to shelter and utilities. Even small businesses voiced their support on the grounds that it would boost spending and entrepreneurship.
On the other hand, a minority of skeptics retain speculative concerns that a few generations down the line, newfound consequences might overshadow these benefits.”
“Out of the $105 billion paid out in 2021 and 2022 as part of the temporary expansion of the child tax credit here in the US, only 5 percent went to families without any income at all.”
“The series of subsidies and tariffs that the federal government uses to artificially inflate sugar prices in the United States cost consumers between $2.5 billion and $3.5 billion every year, according to a timely Government Accountability Office (GAO) report released today. Those protectionist policies aren’t the cause of the recent spike in sugar or candy prices, of course, but prices would absolutely be lower without them.”
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“Those higher prices get baked—quite literally—into the cost of everything from Milky Ways to Sour Patch Kids. And, as the GAO also points out, this is a classic case of concentrated benefits for a special interest that results in huge, but very diffused, costs for everyone else: “Because the program guarantees relatively high prices for domestic sugar, sugar farmers benefit significantly, and sugar farms are substantially more profitable per acre than other U.S. farms.””
“With so much money stolen, it is likely that many EIDL loans will never be repaid. That doesn’t mean the SBA should just throw up its hands and stop trying.”
“Grocery store chains don’t have some anti-Chicago bias. If the people in charge of the city made those neighborhoods safe and economical places to do business, groceries would be as plentiful as they are anywhere else in America. Reducing Chicago’s high crime rate would surely help, though that’s admittedly a long-term project. But there is something city officials could do almost overnight: Reduce Chicago’s commercial property tax rates, which are some of the highest in the country, or the city’s high sales taxes that incentivize consumers (the ones who can, anyway) to do their shopping outside the city.
At best, a government-run grocery store is merely addressing the symptoms, not the underlying problems plaguing Chicago—and it seems unlikely to improve the symptoms, for that matter.”
“In the six months since states began double-checking the eligibility of people enrolled in their Medicaid programs for the first time in three years, more than 8.5 million Americans have lost their Medicaid benefits.
Based on enrollment numbers at the start of the year, that means roughly 1 in 10 people covered by Medicaid have lost their health insurance in a matter of months. After the US saw its uninsured rate hit historic lows during the pandemic, millions of the most vulnerable Americans are now falling off the rolls — with no assurance they will be able to find another form of coverage.
Worse, many of those losing coverage are losing it because of administrative hiccups and would otherwise be eligible — a problem that is disproportionately impacting children.
We won’t know until next year’s national insurance surveys how many people simply ended up uninsured and how many people successfully enrolled in another form of health coverage even as they lost their Medicaid benefits. But it is safe to expect that millions more Americans are now uninsured than were at the beginning of the year.
The health effects of this massive loss in health insurance will take years to be realized. But we know that having Medicaid means people are more likely to see a doctor and keep up with managing chronic conditions. The program helps people live longer. So losing coverage will make it even more difficult for a population that already struggles with its health to stay well.
Here’s why this is happening: During the pandemic, Congress approved an emergency provision that prevented almost anyone from losing their Medicaid coverage. Even if you had a change in income or life circumstances that in normal times would have led to you leaving the program, you were allowed to stay as long as that emergency policy was in place. But that provision expired earlier this year, part of the government standing down from its pandemic footing, and states were tasked with double-checking the eligibility of every person who was on their Medicaid rolls — a process referred to as unwinding. Starting in April, they could remove people who they found were no longer eligible.”
“unless you pin down the details, basic income is too vague to mean anything politically concrete. Like the Rorschach inkblot, you can interpret and design UBI in an endless variety of ways. A program that provides $250 per month is a different ballgame than one providing $1,200 per month. The same goes for one that replaces all other welfare, like food aid (sometimes referred to as a “pure UBI,” which would actually leave the most disadvantaged worse off, and is a bad idea), compared with one that complements existing programs.
Ultimately, the effects of any income guarantee hinge on the details. How much does it pay? Who gets it? How’s it financed? How does it relate to the rest of the welfare state? But most of the real proposals that have made their way through the policy world share a noteworthy trait: When the dust settles, they just wouldn’t be that radical, in either direction.
Generally, most people at the bottom of the income ladder would be better off, those in the middle would break even as they pay about as much in higher taxes as they’d receive from the basic income, and those at the top would be a little worse off. Society would neither ascend into utopian communism nor collapse into bleak idleness. There would just be less poverty and higher taxes.”
“Biden’s administration sold off more than 40 percent of the Strategic Petroleum Reserve last year to help limit rising fuel prices after Russia invaded Ukraine, leaving the stockpile at its lowest levels since the early 1980s. That’s fueling Republican accusations that Biden has left the U.S. vulnerable to a disruption of global oil supplies — at a time when Hamas’ terrorist attacks in Israel are stoking fears of a wider regional war disrupting fuel shipments from the Middle East.”
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the reserve still holds 351 million barrels — equivalent to nearly 56 days of total U.S. oil imports last year — though well below the peak of 727 million barrels it held during the Obama administration. That’s on top of 424 million barrels that private companies were storing in the U.S. as of early October.
The administration has defended its handling of the reserve, saying it still holds ample crude to protect the nation’s strategic needs and offer a cushion against price shocks. “I am not worried about the reserve levels at all,” Energy Secretary Jennifer Granholm told a House committee in September, adding: “It is the largest strategic reserve in the world.”
And the U.S. is no longer the energy beggar it was in 1973, when the Yom Kippur War prompted an Arab oil embargo against the United States that sent prices spiraling and left Americans waiting in hours-long lines at gas pumps. Back then, U.S. oil production was dropping while its thirst for the fuel was rising — prompting Congress to pass a law in 1975 to create the reserve.”
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” the United States is the world’s biggest oil producer, which exports more crude and petroleum products than it imports. Its output is at record highs and is climbing, even as demand has flattened.
Over the years, some conservatives have even called for abolishing the reserve, complaining — as the Heritage Foundation did eight years ago — that “Presidents have used the SPR as a political tool.”
Still, the reserves’ diminished volumes limit Biden’s options to respond to a future shock to the oil markets, including those that could result from a widening of the war in the Middle East.”
“B 1228 applies to fast-food chains with at least 60 locations nationwide — except for those that make and sell their own bread. The bill’s landmark change is a minimum wage hike to $20 per hour, almost $5 higher than the Golden State’s minimum wage of $15.50.
It would also see the establishment of a Fast Food Council to set wages and make recommendations for working conditions. The council has the power to increase the new minimum wage each year through 2029 up to 3.5% or the average change in the Consumer Price Index for urban wage earners, whichever is lower.
One key part of the bill has been removed since its proposal. Previously, AB 1228 would have made fast-food corporations jointly liable if franchisees committed labor violations, which the NOA believes could have led to “frivolous lawsuits against franchisees” that would then force the larger corporate head offices to exert more control over local operations.”