I would think this depends on how you define ‘government benefits’.
For example, Max S. mentioned “housing assistance”. Do you include in that the tax deduction for mortgage payments on buying a house? That is a huge government benefit to many people. (And probably costs the government more than all the Food Stamps programs.)
Ivanka Trump’s new $5.5 million house probably gets her much more than $1,000 per month in tax deductions!
At 4% on a new loan, just shy of $1k/mo, assuming top marginal rate (I have no idea what bracket they’re in.) At 5%, about $1150/mo.
Once the loan is for >$750k, it didn’t do anything for you here. That’s down from $1M.
That’s $1000 per kid per YEAR. Assuming each child gets subsidized school meals ten months out of the year, it works out to $100 per kid per month. You’d have to have 10 kids to be getting $1000 per month in subsidized meals.
:smack: You’re absolutely right. Thanks for correcting my arithmetic failure.
Depending on where you come down on Social Security and Medicare payments is a big factor. My wife pulls in around $1,200 in Social Security, and we’re both on Medicare. Based on some data I pulled off the Kaiser Family Foundation website in 2017 total spending for Medicare was 702 billion dollars with 56,800,280 recipients for a per capita spending of over $1,000 per month. The total payments paid by us amount to around $215 per month each, including parts B, C, and D, so the net government spending on our two-adult household is $2,770 per month.
It does depend but there’s a potential to also lose track of reality at some point, for example counting the fact that people don’t pay a higher tax rate they ‘should’ pay, as a ‘giveaway’ to them. IOW there’s no totally objective definition of when tax code provisions become ‘govt benefits’.
However the specific example of mortgage interest deduction is generally recognized under the category ‘tax expenditure’*. Although since the 2018 tax reform it is no longer as big as the SNAP program. The Congressional Joint Tax Committee estimated the post tax reform annual cost of the mortgage deduction as of FY 2020 as $37bil/yr. The SNAP program cost around $68bil/yr. recently.
(a link arguing that food stamps do not waste money)
A newly purchased home gets a deduction of mortgage interest on up to $750k principal in mortgage regardless of the home price, previously it was $1mil and older loans grand fathered. At 4% on $750k and max 37% federal bracket, the deduction is worth a maximum of a little under $1k/mo.
The Heritage Foundation calculated ‘govt means tested anti-poverty spending’ in the US at around $1.1tril/yr in total, state and federal. That organization has a distinctly conservative-libertarian POV but it is an attempt to add up all the fragmented programs. It doesn’t include Social Security or Medicare because those have basically age not means based eligibility. Nor ‘tax expenditures’ which are not directly means based (mortage interest) but does include those which are (EITC).
It still doesn’t directly answer the OP question but according to an example given a single mother of two earning $7.25 min wage (2016) would get $13,853 in after tax wages and $12,591 in refundable cash credits, SNAP and school meals. IOW $1k/month UBI would almost exactly replace those programs for a pretty typical poor single parent household, but wouldn’t replace medical (which is ~%60 of the $1.1. tril per Heritage, though in fairness few UBI proponents AFAIK are expecting UBI to replace govt paid medical), or other subsidies like housing (but housing/energy was 5.5% of the $1.1tril).
*per the Tax Foundation: ‘any provision in the tax code that provides a special deduction, credit, exclusion, or other tax preference that wouldn’t be included in a “normal” tax code.’
By “government benefits” are you just meaning “provided by the federal government”? Because I didn’t see that in the OP? Free schooling certainly strikes me as a “government benefit” whether provide by state or municipality?
My understanding is that things like education and health care are not included in the $1000 UBI. We would still have heavy public investments in those w/o it affecting the 1k UBI.
For the most part, most people who get 1k a month in benefits fall into 1 of 3 groups.
The elderly
The disabled
Poor parents
Social security has 62 million beneficiaries, which makes up group 1 and 2.
For group 3, according to this, the welfare cliff for a single parent with 2 kids hits at about $15/hr. At $15/hr you get about 35k worth of welfare. At $18/hr you only get about 8k worth of welfare.
By $18/hr there is almost no welfare anymore.
There are about 14 million single parents. Of them, what % get lots of welfare? I don’t know. 40% of single mother headed households are considered poor. But you don’t have to be poor to get welfare. Welfare seems to be pretty generous until you get to ~150% of the FPL, at least for the situation in the article.
So if 40% of the 14 million single parents are poor, and you ass-u-me that another ~2 million earn between 100-150% of FPL, that works out to about 8 million single mothers who get quite a bit of welfare.
So thats 62 million elderly and disabled on social security (most of whom get over 1k a month) and 8 million single parents who get over 1k a month (excluding health care and education subsidies for all groups).
Seeing how there are about 240 million adults in America, that is a little less than 1/3 of Americans getting a 1k a month subsidy already.
I was sloppy in my reply. I intended to say adult members. I was envisioning households where several adults are living together perhaps along with children and all of the adults receiving <$1K/mnth. I don’t think that situation is common.
I hadn’t considered the population of single parents. Nor the situation where one person receives >2K in a household with 2 adults.
Those situations greatly increase my perception of the >$1K population.
The OP said “benefits from welfare programs, food stamps, disability and the like”. Perhaps you consider public school to be in “and the like”. I don’t. I’ve literally never heard anyone (aside from possibly you, here in this thread, if that’s the argument you’re making) contend that public schooling was “welfare” or something similar.
This would come out to somewhere between $75 and $90 per month per kid, on average. With summer break it would probably be more like $90 to $108 per month per kid for the school year, and $0 per month for summer break. It’s a piece of the puzzle but not quite enough to reach $1,000 per month per adult.
And thank you for the interesting prompt!
~Max
It’s unclear because Adam Yang’s proposal is missing the breakdown. All he says is “welfare programs, food stamps, disability and the like”. If I am to be the arbiter of what is or is not included, I will say no to all of these specific benefits.
I had Social Security Disability and means-tested welfare programs in mind (Medicaid, SNAP, housing assistance, and general assistance/TANF).
~Max
I work with a large retired population and agree with your wife, if we were to include Medicare and Social Security Retirement Benefits. Mr. Yang, however, does not seem to include either of these when he says “welfare programs, food stamps, disability and the like”. Rather it appears he is referring to SSDI and means-tested government assistance. I apologize for not being clearer about this in the original post.
I still think many people receive over $1,000 from those programs but I am less confident in my answer and cannot find evidence to back up my guess.
~Max
It is my understanding that the supplemental security income (SSI) counts towards the $1,000 threshold in my original post, but retirement benefits (what you call SSA) do not.
According to the Social Security Administration, who manages both SSI and retirement benefits, the maximum monthly SSI payment for an individual in 2019 is $771 [1]. The actual payment will be $771 minus that individual’s countable income, defined as “anything you receive during a calendar month and can use to meet your needs for food or shelter. It may be in cash or in kind.”[2]
~Max
[1]SSI Federal Payment Amounts for 2019. (n.d.). Social Security Administration. Retrieved from SSI Federal Payment Amounts for 2024 on April 15, 2019.
[2]Countable Income for SSI Program. (n.d.) Social Security Administration. Retrieved from Countable Income for SSI Program on April 15, 2019.
Thank you, USAFacts looks like a good secondary source for profit and loss statistics on the federal government.
I can use this site as a foothold to source individual program spending per beneficiary, but I can’t yet say how many people are on both program X and program Y and therefore exceed $1,000 in monthly benefits.
I’ll keep it in mind for future reference.
~Max
I agree it seems from the figures thrown around that Yang’s proposal does not envision replacing SS (aside from maybe SSDI) or Medicare with UBI. Although confusingly some media accounts describe it that way, UBI to replace all transfer programs.
As to number of people again seems difficult to pin down. But back to the Heritage study quoted above
It gives typical examples of a single mother of two with full time minimum wage job qualifying for >$12.6k/yr in cash, food and school lunch assistance. If qualifying for Section 8 housing assistance that’s another $11.8k/yr or so. In an intermediate step they add in Medicaid at around $10k value but again I assume all proponents of UBI plans envision replacing the current US medical system with a more completely govt funded one with UBI on top.
But in any case the answer to how many households already get more $12k/yr/adult in govt assistance, counting only means tested ‘anti-poverty’ spending, not including SS, not including the provision of general public goods like free primary/secondary education (itself minus school meals or scholarships), not counting non-refundable tax deductions, would seem to be ‘a significant % of the households in the lower and next lowest quintile’.
The Heritage numbers don’t include SSDI which would be a fairly major addition. Their total is around $1.1tril/yr ‘means tested anti-poverty’ but almost 60% of that is medical, making it around $440bil for the other stuff. SSDI is another around $143bil/yr or so. Which is rough agreement with the numbers given in the other thread which seemed to be ‘spending now’, high 500’s not counting medical.
But simply, again not to dodge the specific question, a flat UBI per adult could not practically politically replace all other transfer payments, even on the remote chance most proponents really meant that as a goal. Public debate, once and if the idea was really serious not just an attention getting exercise as I believe it is now, would develop the numbers showing how many millions of children in single adult poor households would get less. Either significant other anti-poverty child-oriented programs would also have to continue so that money would not be available for the UBI, or children would have to at least partly qualify for the UBI in their own right and thus the UBI cost more than it looks just counting adults.
How much of this assistance to poor families would be changed over to “on behalf of the child” and not counted against the parents UBI? I could see at least some of it going that way.
Mr. Yang doesn’t explicitly list what programs are considered “welfare” type payments so I am left grasping at straws. This being my thread and not his, Medicaid is included. I include Medicaid only because Mr. Yang’s proposal comes short hundreds of billions of dollars without it.
That being said, the unpredictable nature of Medicaid benefits has not escaped me. This makes it more difficult to produce a statistic but it should not be impossible. Ideally I would look at an official multivariate probability distribution based on benefit amount for every combination of government benefit programs. Take the probability of benefits exceeding $1,000, multiply by the US population, copy the margin of error, and viola! Problem solved.
In the absence of a published distribution, the next best thing is to construct the distribution from published statistics. This is the part I ran into trouble with - published statistics have high margins of error. Wildly fluctuating Medicaid benefits means they didn’t publish those statistics at all.
There really were a number of people receiving over $1,000 in benefits for each month in the past ten years, and at every point people were collecting data. We should be able to make some sort of conclusion.
~Max
Good point, most government reports on welfare spending don’t include EITC. I think of it more as reduced government revenue than increased spending. From the IRS[1]:
[QUOTE=IRS]
The maximum amount of credit for Tax Year 2019 is:
[ul][li]$6,557 with three or more qualifying children[/li][li]$5,828 with two qualifying children[/li][li]$3,526 with one qualifying child[/li][li]$529 with no qualifying children[/ul][/li][/QUOTE]
From the Department of Labor’s report mentioned in post 2, the average family receiving other means-tested assistance had two children[2]. Going from the above list, that amounts to a maximum of $485.67 per month for the family. But it all comes at once, during tax season (today!).
Nevertheless the Cato Institute report linked by HurricaneDitka in the linked thread included EITC as a welfare program[3]. I will include it for the purposes of this thread, too.
~Max
[1] 2019 EITC Income Limits, Maximum Credit Amounts and Tax Law Updates. (2019). Internal Revanue Service. Retrieved from https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eitc-income-limits-maximum-credit-amounts-next-year
[2] Program participation and spending patterns of families receiving government means-tested assistance. (2018). Bureau of Labor Statistics. Retrieved from https://www.bls.gov/opub/mlr/2018/article/program-participation-and-spending-patterns-of-families-receiving-means-tested-assistance.htm
[3] Tanner M. The American Welfare State: How We Spend Nearly $1 Trillion a Year Fighting Poverty—and Fail. (2012). Cato Institute. Retrieved from https://object.cato.org/sites/cato.org/files/pubs/pdf/PA694.pdf