- Guaranteed income programs, which provide monthly income to help people with financial needs, have become more popular since the Covid pandemic.
- Even as research shows the efforts have been effective in helping improve economic mobility, the backlash against them is growing.
- One program in Texas’ Harris County was recently halted before payments could begin.
About 1,900 residents in Texas’ Harris County were set to start receiving $500 monthly payments starting this spring.
The money — provided through a new 18-month guaranteed income pilot, Uplift Harris, a Harris County Public Health initiative — was aimed at county residents of 10 ZIP codes who are living 200% below the federal poverty line.
The program would provide money with “no strings attached,” so families could decide how to use the resources to meet their needs.
More from Personal Finance:
U.S. experiments with guaranteed income — Will it work?
This city gave some residents $500 per month to help with Covid-19 crisis
New guaranteed income programs take inspiration from Martin Luther King, Jr.
But before the first checks were sent, state Attorney General Ken Paxton obtained a stay from the Supreme Court of Texas forcing the program to stop the payments.
In a statement at the time of the stay, Paxton called the program an “abuse of power and unlawful use of taxpayer money.”
Paxton did not respond to CNBC’s requests for comment.
The decision — which follows the successful execution of other guaranteed income programs in Texas and other states — was “shocking and unfortunate,” according to Christian Menefee, county attorney of Harris County.
“It’s highly unlikely the county continues with the program as it’s currently constituted,” Menefee said.
As guaranteed income grows, so does the backlash
Guaranteed income programs provide cash payments intended to establish an income floor for specific members of a community, according to the Economic Security Project, an advocacy organization. While universal basic income provides money to everyone, guaranteed income may provide either targeted or universal support.
The programs flourished in recent years, helped in part by the Covid-19 pandemic that raised awareness of how direct cash could fill targeted needs.
While the federal government deployed billions of dollars in stimulus checks and child tax credit payments, state and local governments also started to experiment with ways to provide money to residents in need, often with the help of extra federal money provided through the American Rescue Plan Act.
Today, the Economic Security Project is tracking 150 guaranteed income pilots in 35 states. Around 52,000 people have participated in a pilot at some point in the past couple of years, according to Harish Patel, vice president at the Economic Security Project.
Yet backlashes against the programs have also gained momentum.
Idaho, Iowa, and South Dakota passed anti-guaranteed income legislation this year, while Arkansas did the same in 2023. Those efforts happened “very quickly,” and similar proposals are expected in an additional 25 states, according to Patel.
The conservative think tank Foundation for Government Accountability, and its lobbying arm the Opportunity Solutions Project, has led those efforts. The organization did not provide comment, but the foundation’s research lays out the reasons for its opposition. It argues guaranteed income programs discourage work, “trap people in dependency” and cost taxpayers millions.
The bills are written in “copycat fashion,” which make it easier to replicate them among states, according to Patel. Yet that structure also leaves less room for rigorous analysis of their reach; the proposals are so general that they may end up limiting all cash assistance, not necessarily just guaranteed income programs, he said.
“Let’s say you have a natural disaster and you want to give out cash,” Patel said. “In some states, they may not be able to if these sorts of very general policies that are written become law.”
One-year Austin experiment helped residents
Others who have researched the effects of the programs say they see evidence guaranteed income works.
In a one-year experiment launched in Austin, Texas, in 2022, 135 households received $1,000 per month. The program, which was focused on high poverty and rapidly gentrifying neighborhoods, helped improve housing and food security, early research from the Urban Institute shows.
The city of Austin enlisted the Urban Institute to study the effects of the cash infusions.
“We’re awash in evidence in this country that giving people cash infusions works,” said Mary Bogle, principal investigator for the Austin Guaranteed Income Pilot evaluation and principal research associate at the Urban Institute.
Typically, participant workers are in very low-wage jobs, Bogle explained. Once they have access to guaranteed income, that often allows them to figure out ways to increase what they earn, she said.
“Folks who press arguments about guaranteed income creating dependency aren’t looking at the fact that what guaranteed income is actually allowing participants to do is make good choices,” Bogle said. “They have freedom of choice.”
For Austin resident Taniquewa Brewster, 38, being selected for the city’s guaranteed income program helped her break free from a pattern of sporadic, unstable employment.
She found out about the program when she was still struggling to recover from winter storm Uri in 2021, which left her apartment building without gas for months.
At the time, Brewster’s ability to work was also limited because she found juggling a full-time work schedule and child care for her five children to be next to impossible.
The extra money had immediate benefits. Brewster said she was able to pay for the sports, camp and after-school programs her children wanted to participate in. She also helped her sister with costs for the car they shared.
Though Austin’s guaranteed income has concluded, Brewster said it has a lasting impact on her life, particularly because it helped jump start her career. The program’s money helped her go to school and get more education.
She got a certificate to be a leasing agent and now works for her apartment complex. She also became a notary and is currently training to become a doula.
“That gave me time and a cushion to say, OK … you don’t have to put things off so that you can be sure that you can take care of your family,” Brewster said.
‘The status quo isn’t working’
Many other guaranteed income program participants have seen life-changing improvements, particularly when it comes to their earnings capability. That is why the programs’ supporters are puzzled by the growing opposition.
“There’s no real cogent vision for what they want to see, other than the status quo,” said Michael Tubbs, founder of Mayors for Guaranteed Income. “And the reason why guaranteed income is so popular is because the status quo isn’t working for most people, Democrats and Republicans.”
Harris County’s program may have been targeted for political reasons, according to Menefee, the county attorney.
“If Democrats increased the margin of victory in Harris County, because we’re such a populous county, we have the potential to flip the entire state,” Menefee said.
Harris County’s funds have to be committed by December, according to Commissioner Rodney Ellis, and the federal money may instead be used for existing programs.
But Ellis is hopeful the guaranteed income program can be revamped to address the state’s concerns, such as placing more controls on how the money is used and changing the random selection process used to choose participants.
Previously selected participants would likely have to apply again, Ellis said.
The efforts to quash the Harris County program may be replicated to push back against other guaranteed income efforts elsewhere, he said. “I assume other conservative attorney[s] general around the country are looking at this and may resort to doing the same thing.”
Brewster, the Austin program participant, suggests that opponents of guaranteed income might change their tune if they were to switch income and resources with low-income individuals for just one month.
“Sometimes you just need a boost, and most of those families just needed that boost,” Brewster said.
