Part 4: Implementation and Conclusion

PRINT A Basic Deal (Part 4) Mar. 2024 v5.pdf

Download PDF • 77KB

Implementing A Basic Deal's ideas would be a big lift. But it would be feasible, with certain components dependent on the development of others, and everything eventually integrated.

Basic Need Accounts and the Public Jobs Program should be developed along separate tracks. The latter in particular shouldn't be rushed. Different PJP models should be tested in localities around the country, resulting in best practices worthy of replication when the program is expanded to full scale. At that point, it would also be possible to scrap the minimum wage laws.

Transitioning subsidized housing programs to Community Housing requires that Basic Need Accounts and the Public Jobs Program first be in place. But that's not necessarily a bad thing. It will provide time for the unsubsidized housing supply to further expand in anticipation of the additional demand these programs will stimulate; that, in turn, will help determine how large a subsidized Community Housing program is required in those markets where needed.

Additional low-barrier (more welcoming) and less crowded shelters and other temporary accommodations should be developed as quickly as possible to meet the short-term need - no one should be living on the street. But they should be constructed to be easily adaptable for other purposes. Over time, Basic Need Accounts, the Public Jobs Program, and the increased supply of permanent housing of both an unsubsidized and subsidized nature will substantially reduce the need for temporary facilities.

On more of a nuts-and-bolts level, there will certainly be a host of practical issues that must be addressed to ensure A Basic Deal's programs are implemented smoothly and sensibly. For example, how do we make sure all households can conveniently sign up for Basic Need Accounts and, if they wish, obtain assistance with managing their funds and identifying suitable opportunities? For the Public Jobs Program, how do we create flexible enough work schedules so its participants, who will mostly see this as a temporary stop, can at the same time apply for positions in the mainstream marketplace or get job training? And what should be the appropriate levels of support for incarcerated individuals and for non-citizens with various immigrant and refugee statuses?

No doubt, the proposed programs would be expensive. At $7,200 per person annually, assuming a population of 335 million people, we're talking about $2.41 trillion for Basic Need Accounts alone. If we further assume 1,000,000 full-time equivalent Public Job employees, approximately .6% of the labor force, at an annual cost of $40,000 per employee (including benefits, supervision, and administration), that's another $40 billion. Let us further assume the investments in Community Housing and the decline in existing subsidized housing expenditures will offset each other. So the total increased public tab would be $2.45 trillion.

Given these additional costs, we should look to eliminate or reduce expenditures that serve the same purposes as those covered by A Basic Deal. Taking note of some of the big-ticket items, we could scrap, for example, SNAP (food stamps), Temporary Assistance for Needy Families, Pell Grants, and the Earned Income Tax Credit. And looking more broadly at the federal budget, it's sensible to re-consider spending for lower priority items and tax breaks particularly beneficial to higher income households, such as the mortgage interest tax deduction.

In the end, if we can't justify eliminating an equivalent amount of spending from existing programs, we should be open to increasing the total amount of public spending. As evident from 2022 OECD data, comparing the United States (where government spending totaled 45% of Gross Domestic Product – several percentage points above its norm due to the pandemic response) with other wealthy countries such as Finland (56%), and France (59%), there is nothing inherently good or bad about a larger or smaller public sector. The question is whether the money is spent wisely and has been raised in a fair and economically stable manner.

One additional economic consideration is that A Basic Deal's programs would directly produce their own savings and inspire investments that benefit the economy. The considerable costs associated with serving homeless populations, including massive health care expenditures, would substantially decline; the private housing industry would benefit from increased demand; and households with low to moderate incomes would provide a boost to the economy through additional direct spending, the enhancement of job skills, and possibly the start of new businesses.

Conclusion

Change is hard, and radical change is harder. That's especially so in a country with a constitutional framework that generally serves us well, but makes it difficult to institute fundamental change.

I believe most Americans would agree that everyone should have a decent chance at a dignified life with stability and prospects for success. But the system we have in place to serve this purpose is not really a system and is not ambitious enough. Numerous programs, each targeting narrowly defined groups, each with its own eligibility criteria, each weighed down by its own bureaucracy and operating in uncoordinated fashion with the others does not make for a system. It does not make for an efficient use of limited resources. And most importantly, it’s not getting the job done.

A Basic Deal offers an alternative framework founded on the elements of a household budget rather than a disjointed assortment of siloed programs. It places a premium on flexibility and enables people to pursue their own priorities. It plays no favorites, but it does enable people to catch up from a rough start in life or errors in judgment or bad breaks. In one sense, it's built on a set of abstract principles and simple arithmetical relationships. But it's more than that, as it deals with fundamental aspects of people's lives and spirit.

To be clear, A Basic Deal’s focus is principally on the demand side of the equation. On the supply side, it would create a new mechanism for making housing affordable, but it won’t develop the housing itself, nor will it fill other critical voids related to meeting Americans' basic needs.

A Basic Deal won’t ensure the availability and affordability of certain high-cost services, such as child care; nor will it won't improve poor quality public schools or constrain higher education tuition expenses; nor will it meet the nutritional needs of lower income populations residing in “food deserts”.

And then there is health care, which perhaps best exemplifies the need for thoughtful intervention to more effectively, efficiently, and fairly address the supply requirements of a complex system with numerous players directly and indirectly serving people whose needs must be met under a wide variety of circumstances.

Finally, let’s acknowledge that A Basic Deal can't substitute for the unique, intangible benefits a supportive family and community can offer.

All that said, by integrating Basic Need Accounts, a Public Jobs Program, a Community Housing Program, and universal basic health insurance guided by complementary standards - and by providing sufficient, appropriate housing for low-income seniors and people with severe disabilities - consider what we can start to envision: every American can have a home; anyone who wants a job can get a job; one person maintaining a full-time job can earn enough for a family to not only afford permanent housing, but also meet its other immediate needs; no one will be without quality health insurance and the ability to pay for health care as needed. And finally -- this is important – households can save additional dollars to invest in their members’ long-term well-being in accordance with their own priorities.

Fortunately, we are not burdened by a standing start. America came together in the 1930s and 1960s to make this society more economically secure and vital. But it's now time to take the next step. It's time to apply our collective resources more sensibly, efficiently, and yes, generously to create a stronger foundation every American can stand on to manage life’s necessities and build a brighter future.

That's what A Basic Deal would do. That's what we can do for each other.