Biden’s $1.9 trillion Covid-19 relief bill has passed the Senate, clearing the way for it to become law. Much of the legislation is dedicated to handing out cash to individual Americans. This is a sign post for a tectonic shift that’s underway in U.S. policy thinking toward unconditional money transfers as the optimal way to help people in need.
When I was a kid in the 1980s and 1990s, everyone was talking about “a hand up, not a handout.” This was the mantra of workfare -- the idea of using government programs to incentivize labor and self-betterment. In 1996, President Bill Clinton signed the Personal Responsibility and Work Opportunity Act, which turned the old Aid to Families with Dependent Children welfare program into a state-administered block grant with work requirements. Meanwhile, the flagship next-generation welfare programs touted by economists and so-called “third way” reformers were the Earned Income Tax Credit and the Child Tax Credit, which only give people money if they also manage to earn some income for themselves.