The Biden administration is planning to drastically expand the nation’s welfare state through increased child allowance grants quietly added into the latest stimulus, which some experts say is a move toward universal basic income.
As part of the $1.9 trillion COVID-19 relief package, the annual child tax credit was increased to $3,000 per child from ages 6 to 17, and $3,600 for children under 6. It will be made fully refundable, and payable in monthly installments of $300.
Before this, the maximum annual credit was $2,000 for every child under 17.
The problem is that “it’s unnecessary, and it’s counterproductive,” he said.
‘Permanent Expansion’
During the 1990s, the U.S. welfare system was overhauled, shifting the focus away from giving cash unconditionally to one that focused on a work-oriented system. Rector noted that change slashed the poverty rate among children roughly in half while reducing dependence and increasing employment.He says that what Biden is doing now is returning to a policy of unconditional aid that is “extremely expensive but also very harmful to the poor themselves, because when you do that you’re pushing them toward the social margin.”
Rector notes how experiments in these types of programs indicated that for roughly every $1,000 given, there is a loss of $660 in earnings. He said the child tax credit is “clearly intended” to move in the direction of enacting a universal basic income.
“They’re presenting this as if it’s a one-year change in response to the COVID crisis,” he told The Epoch Times. “But it’s clearly intended to be a permanent expansion.”
“With interest rates likely to increase due to inflation, servicing the debt will become a lot more expensive. This growing debt is unsustainable over the long term,” he added. “Thirdly, there is no fathomable way of implementing a program like this along with universal health care and education programs.”
Measuring Poverty
One issue related to the debate over welfare is how the United States measures poverty levels. The government, when it counts income, doesn’t count money taken from the half-trillion dollars in welfare as income, according to Rector.“Our poverty statistics are kind of meaningless,” he said. “When these organizations run a calculation and say, ‘Look at how much this credit reduces poverty,’ the credit calculations are based on these ridiculous databases that exclude all of the current spending, or nearly all of it.”
“Now, they’re saying if we’re spending new money, we’re going to say that it’s income, but if it was money created in the previous welfare programs and so forth, that doesn’t exist.”
It’s important for a variety of reasons to have a working adult in a household, according to Rector, who notes that it initiates social contacts, creates role models for the children, and improves the psychological well-being of the individuals.
“It’s a huge cultural trap that you’re creating, by creating this artificial environment where the poorest people are kind of set aside and told, ‘You’re not expected to work or do anything,’” he said. “And in here, we’re going to give you a lot of money and they’re there. It’s not just this program, there are still a lot of old programs that already do this.”