DFL’s $100 million ‘basic income’ program is just more welfare with a new name

Last week, a House bill — HF 2666 — was referred to the Ways and Means Committee. The bill, authored by Reps Hollins (DFL), Gomez (DFL), Agbaje (DFL), Keeler (DFL), Xiong (DFL), Sencer-Mura (DFL), and Kozlowski (DFL), would use $100 million of taxpayer’s money to fund handouts of hundreds of dollars each month to up to 10,000 people, including illegal immigrants.

The Star Tribune reports that the bill would make Minnesota “one of the first states in the nation to pilot a basic income program.” The phrase “basic income,” which is the bill’s language, is curious. It derives from the concept of universal basic income (UBI) which, the Star Tribune notes, “has been around for centuries.” It is, Wikipedia explains:

…a social welfare proposal in which all citizens of a given population regularly receive a minimum income in the form of an unconditional transfer payment, i.e., without a means test or need to work. [Emphasis added]

Some such schemes have previously drawn support from conservatives and free marketeers. Milton Friedman proposed a ‘negative income tax’ and, when asked how that compared to a universal basic income, he replied that UBI was “simply another way to introduce a negative income tax.” In Britain, the Adam Smith Institute has long argued for abolishing all current welfare programs and replacing them with a UBI. If the United States and Minnesota were to do this, a quick calculation suggests that a Minnesotan family of four would have received $22,000 in 2021.*

But the basic income scheme proposed by HF 2666 isn’t universal. The Star Tribune reports:

The pilot program would give grants to nonprofits and local and tribal governments, which would distribute payments. To qualify, recipients would have to be receiving public benefits or have a household income at or below 300% of the federal poverty level, which is $93,600 for a family of four.

Under the House bill, a recipient would get at least $500 a month for at least 18 months, in addition to any other public benefits they are already getting. If someone got a higher-paying job during that time, they would still get the benefit.

Instead of “all citizens” receiving this money only some citizens will. The Star Tribune obscures this point — to put it politely — by referring to “no-strings-attached cash aid,” “cash without conditions,” and even “free money” — the bill has a price tag of $100 million, remember — while listing a bunch of conditions which an individual would have to meet to receive these handouts which amount to a means test.

We already have a phrase for taxpayer financed transfers of cash to people who meet certain conditions: welfare. This “basic income” is, then, just another new welfare measure. It has been rebranded, presumably, because “basic income” polls better than “welfare.” Whatever the merits or otherwise of this bill, let us at least be honest about what it is.

* (Federal welfare spending of $1.1 trillion / United States population of 332.4 million) + (Minnesota welfare spending of $18 billion / Minnesota population of 5.2 million) = $22,000