The Quest For A Guaranteed Basic Income During the Nixon Era

Guaranteed basic income (GBI) was considered, by many economists and historians, as the key anti-poverty experiment of the 20th century. [1] A concept originating back nearly 500 years to Thomas More’s 1516 book “Utopia” a guaranteed basic income implements a system in which the national government provides a guaranteed baseline level of income for all citizens. This theoretical plan and its varied tributaries, would provide a personalized financial safety net for all citizens and allow each individual to spend the money as they saw fit. With the birth of the “demonstration research era” in the 1960s, several localized experiments were conducted all throughout the United States. [2] The Nixon administration, which would go on to introduce their own legislative plan called the Family Assistance Plan (FAP), championed the program as a cost-cutting welfare reform measure, in tangent with a first of its kind federal working poor initiative. [3] However, by the mid-1970s, in what many academics deemed as the decade of successful guaranteed basic income experiments, the experiments would come to a close. And though activists like Martin Lurther King Jr. deemed the GBI as the “simplest approach” towards abolishing poverty, liberal Democrats and conservative southern agriculturalist alike would find ways to demagogue the program. [4] With fiscal conservatives describing the Family Assistance Program as an endless inflationary tax which would, ironically, imbalance the labor market in favor of the poor. While liberal Democrats feared providing too much assistance to the poor would be considered “demeaning.” [5 [6] By the time successful social experiments like the New Jersey Income-Maintenance Experiment, which dissuaded the notion of an uptick in lines workerless federal doll collectors, could be completed, the political capital needed to simultaneously court conservatives and liberals alike would prevent the Nixon Administration from successfully passing the bill through both the House and the Senate. [7]

An idea once considered anathema to the Republican Party of the early 1960s, the guaranteed income program offered by the Nixon administration was nothing short of a massive deviation from the Republican party’s traditional hands-off approach to welfare and the wage market. The concept of a negative income tax (NIT), which was just a shade away from the GBI concept, was continually thrown around during policy discussions in the Johnson White House, but was never actually presented publicly due to fear that Democrats would be, “run out of town” according to one Johnson official. [8] However, the range of economists who supported experimental income programs were just as diverse as the body of social and labor activists, whom made up the “New Left,” that began to actively champion the cause throughout the period. Dr. Benjamin Spock, who ran for president on behalf of the People’s Party in 1972, a small minority leftist party campaigning on the withdrawal of troops from Vietnam, socialized healthcare, and a maximum wage, campaigned on the GBI platform and claimed it could lift nearly 56 million Americans out of poverty. [9] In Martin Luther King Jr.’s last book, Where Do We Go From Here, King argued that a GBI could simultaneously attack the “multiple evils” of unemployment, poor housing, and educational facilities, social decay, and poverty all in one brush stroke. [10] King saw the program as moving away from, “the realm of constitutional rights” and towards the “area of human rights.” [11] Where unemployed and working poor blacks and whites alike, would be guaranteed a level of subsistence above the first rungs of poverty.

Various guaranteed income plans were presented by liberal and conservative economist alike throughout the 1960s. In 1968, a statement signed by more than 1,000 economists from 125 American universities, urged the federal government to pass legislature promoting “a national system of income guarantees and supplements.” [12] A “successful” program would: “(1) Need, as objectively measured by income and family size, should be the sole basis of determining payment to which an individual and/or family is entitled. (2) To provide incentive to work, save and train for better jobs, payments to families who earn income should be reduced by only a fraction of their earnings.” [13] The five prominent economists to cosign the proposal, Paul Samuelson from the Massachusetts Institute of Technology; John Kenneth Galbraith from Harvard; James Tobin of Yale; and Harold Watts and Robert Lampman from the University of Wisconsin, would insist that any future legislation must meet or exceed income standards required for building a stable family. [14] These standards were intended to meet all the basic needs of consumers; housing, food, social well being, and job improvement skills. In a successful implementation of a GBI plan, the “red tape” that conservatives often argued “trapped” people in system of poverty and dependability would be eradicated. [15] Along with conservatives arguing that the need for redundant programs like food stamps, public housing, and supplemental welfare would no longer be an issue. [16]

On August 8th, 1969 President Nixon spoke to the nation over broadcast television and radio about his new plan to address “the failure of government…in its efforts to help the poor… in its system of public welfare.” [17] In a plan that would come about over the next two years, the administration formulated an “income security” plan that would combine housing, welfare, and food assistance into one program. The Family Assistance Program (FAP), as it came to be publicly known, would provide a husband and wife with two children $1600 annually, with an additional $300 per child. [18] Administration officials estimated that the plan would increase the number of those eligible for welfare assistance from 1.7 million families, or 6.8 million persons to 4.6 million families, or 22 million to 23 million persons. [19] The Republican plan would increase the number of Americans on assistance, it would however have several cost-cutting “advantages.” Those receiving assistance would not be able to participate in existing housing, welfare, or food assistance programs. The reduction in program complexity, would allow for a single administration office the ability to directly deliver checks through the mail via a simple process of tax receipt verification. This adage would reduce complexity for the consumer, but also reduce radiancy in administration offices and the number employees needed to administer the programs. To appease conservatives within Congress and the Senate, the administration attached a work requirement program, and to protect working parents, the plan would also provide for some $600,000,000 in funding for daycare centers. [20]

In comparison to past efforts by previous Democratic administrations, the Nixon Administration set out specifically to create a program that would benefit both poor and working-class Americans. The measure was seen as non-racially biased and qualitatively superior to past efforts where county welfare departments in the south had been notoriously “punitive” and selective in assistance with black welfare clients. [21] Within the White House, the push for a mechanism of support for America’s working poor specifically was actively seen as a measure to appeal to the “forgotten” white working-class male. [22] The 1960s Civil Rights movement positioned the able-bodied black male and women at the center of political media attention, while for many reactionary whites, black men and women would appear as the undeserving poor, unworthy of public assistance, and a threat to urban law and order. [23] Nixon’s new plan, which allowed for able-bodied working white men the “chance” at government assistance, unlike like previous administrations, would provide the Nixon administration the opportunity to capture the white working class vote away from the Democratic party and aid in his reelection. [24]

The plan wasn’t intended to be apart of some large cabal of smoke and mirrors. Political commentary from both the Democratic and Republican Party along with labor and social welfare advocates had come out to criticize the already existing welfare system. Millions of Americans living in poverty and the complexities of nationalize economy stressing urban and rural manufacturing centers had resulted in a net increase in the number of unemployed. [25] However, not everyone was a fan of the plan offered by the Nixon Administration. While some GBI advocates had praised the administration for attempting to come up with a plan, the $1600 sum, forced work agreement, and the theoretical closure of other welfare programs left many of those on the left seeking more.

The Family Assistance Program was able to successfully pass through the house in 1971 and 1972, but the bill froze several times in the Senate. Senator Russell B Long. of Louisiana modified the original Republican House bill to guarantee that cuts to Social Security, Medicare and Medicaid would not occur. [26] Several other leading liberal voices in the Democratic Senate majority pushed for an increase to the original “floor” offered by the Nixon Administration. Senator Long wanted an increase to $2,400 while Senator Ribicoff of Connecticut saught a total of $4000 per year. [27] The push for a higher “floor” would force more conservative senators to second guess their support of the bill even though the support of all Republicans was needed to pass the bill. [28] Welfare groups also attacked the “forced work” measures in the bill. Senator McGovern of the Senate Finance Committee, and Democratic Presidential candidate for president in 1972, invited National Welfare Rights Organization’s vice chairman Beulah Sanders to hearings on the Senate bill in ’72 described the work incentives requirement as forced labor and similar to the treatment of “house slaves.”[29] Sanders would go on to describe her experience of living in NYC, claiming that her minimum needs, at the time, were nearly three what the Republican FAP was offering. As the representative of the NWRO, Sanders said the organization would only support the Senate version of the bill if it met a floor value of $5,500 annually.

The work requirement trade -ffs the Nixon administration made with conservatives drew demonstrable criticism from left-leaning labor and social advocates. Along with the low “floor” value, Democratic support was all but lost by the end of the 1972 Senate session. Internally within the White House, Nixon also had limited support. His policy was seen as too liberal and a free giveaway to the poor. [30] Counselor to President Nixon and former Chairman of the Federal Reserve, Arthur Burns, described the idea of a GBI for working poor would bring the, “addictive philosophy of welfare to those who are presently self-reliant.” [31] Burns also relied upon a considerable common argument found within the administration after the publication of the ‘Speenhamland Report.” A GBI program made workers unwilling to work in scenarios they found unpleasant. [32] In that, when labor lacks the forced necessity of wage-earning and scarcity, exploitative managers are less likely to find workers. [33] The subsequently forces workplace conditions at a cost to the producers.

The Nixon Family Assistance Plan was unique for its time. A Conservative Republican administration saught to tackle the troubles of bloated government with a uniquely socialist policy that would nearly sextuple the number of individuals on government assistance. The GBI program would fall short of its goal by being too liberal for the Nixon Administration’s internal intellectual apparatus and financial supporters, while simultaneously not being liberal enough for a Democratic party unable to pass its own version of the policy. Following the policy debates of the early 1970’s Nixon’s plan was seemingly lost in time. That was until recently, with the popularization of discussion around universal basic income spawned by many of the same driving economic factors that drove the Nixon administration to implement its original plan, automation and changes in the America economic system. It’s hard to say what we can learn today from this plan, but if today’s policies proposal like the Freedom Dividend is ever going to pass, it’s going to take considerable efforts to find some form of compromise that will be beneficial for all parties.

Sources :)

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