Rumblings from the Democratic National Committee seem to bear out a rumor that in this 2014 election year, Democratic candidates will shy away from Obamacare.
With unemployment hovering just under 7 percent, and retroactive extended unemployment benefits just approved by the Senate, the Democratic Party will emphasize what it intends do about income inequality in the United States.
Interestingly, the PBS News Hour recently reported on a ballot referendum in Switzerland which, if passed, will guarantee each Swiss citizen an unconditional basic income of 30,000 Swiss Francs (about $34,000) per year whether they work or not. Would the Swiss proposal result in the ultimate welfare state? Will Obama’s minions latch on to the idea?
Actually, the concept has been around a while, and surprisingly it has had support, in one form or another, among both conservatives and liberals. Conservatives, including such a luminary as Milton Friedman, see a guaranteed basic income as a means of rebuilding a civil society, putting citizens’ fortunes back in their own hands and wiping out the messy, piecemeal nanny-state safety net and its bureaucracy in one swoop.
Liberals see it as the fastest way to eliminate poverty by making sure that everyone has enough money to live on. Liberals, however, would superimpose a guaranteed minimum income on top of existing welfare programs.
The concept came very close to becoming law in the United States during the Republican administration of Richard Nixon. In 1969, a Nixon-appointed commission, studying how to assure basic economic security for all Americans, came up with its report entitled: “Poverty Amid Plenty: The American Paradox” which recommended that a family of four receive a base income of $2,400 per year ($15,182 in current dollars) with continued support for earnings up to $4,800 per year ($30,365 in current dollars).
The program was expected to cost $6 billion per year ($37.9 billion in current dollars). Recipients should not be required to work, the commission proposed, although above the base of $2,400 the plan provided an incentive to work. The commission’s rationale was that poverty was caused be forces beyond an individual’s control hence the federal government needed to provide a solution.
With the support of the Nixon Administration, including Office of Economic Opportunity Director Donald Rumsfield, the measure (called the Family Assistance Plan) passed the House 243 to 155 on a bipartisan vote.
But it stalled in the Senate, some Democratic senators protesting that it wasn’t generous enough and others fearing that it would disrupt the agricultural economy in the south.
Following this stalemate and in order to determine real-life responses to such a plan the Department of National Health and Welfare conducted four income maintenance experiments in New Jersey, Pennsylvania, North Carolina, and Iowa as well as several large cities.
Families were randomly selected and given financial support over a long period. The result was an average reduction in labor force participation of 13 percent, mostly by women and older children who dropped out; the divorce rate also increased.
Skeptics claimed that the experiments proved that free money was a disincentive to work and broke families up. Others praised the freeing up of working mothers to tend to their families and of older children to complete their education. In any case, the results dampened any enthusiasm for resurrecting the concept in Congress and it lies in limbo.
Will the Democrats dust the measure off and bring it front and center again for this year’s election? Will conservatives still support a “clean” version of the concept which replaces all welfare programs and bureaucrats?
Jim Clark is president of Republican Advocates, and has served on the Washoe County and Nevada state GOP Central Committees. He can be reached at firstname.lastname@example.org.