Ilhan Omar would give money to all Americans — but who pays for it?

Ilhan Omar would give money to all Americans — but who pays for it?
© Getty Images

Hard as it may be to believe, the most expensive bill proposed in Washington in the past few weeks isn’t the bipartisan trillion-dollar infrastructure bill. It’s also not the Democrats’ mammoth $3.5 trillion, 10-year spending plan. It is instead the Sending Unconditional Payments to People Overcoming Resistances to Triumph (SUPPORT) Act, which was introduced on July 30 by Rep. Ilhan OmarIlhan OmarPhotos of the Week: Schumer, ASU protest and sea turtles Omar to accept award Saturday as American Muslim Public Servant of 2021 GOP infighting takes stupid to a whole new level MORE (D-Minn.). This bill — which, according to one analysis, is “the closest legislation to universal basic income the U.S. has seen” — would increase federal spending by an astonishing $3.75 trillion per year.

Omar’s legislation, cosponsored by a few progressive colleagues, would provide universal basic income (UBI) payments to nearly all Americans. Federal checks would flow each month to all but the richest U.S. residents, and a typical family of four (two adults, two children) would collect federal payments totaling $43,200 per year — even if no one in the household worked at all. A summary prepared by Omar’s office explains that “no one needs earned income to receive the credit.” The summary adds that “[t]hese payments will not count as income to affect eligibility of other federal assistance,” despite the fact that these government handouts would elevate the income of non-working families above the poverty line. That means food stamps, housing and other welfare benefits would continue to be paid as if such families had no income whatsoever.

Without even a hint of irony, Omar announced this plan just two weeks after de facto universal basic income checks started flowing for the first time to America’s parents in the form of monthly federal “child allowance” payments. Those monthly checks to 39 million households with children were created by the pandemic relief law that President BidenJoe BidenPfizer CEO says vaccine data for those under 5 could be available by end of year Omicron coronavirus variant found in at least 10 states Photos of the Week: Schumer, ASU protest and sea turtles MORE signed in March. 

ADVERTISEMENT

Omar’s bill would expand those payments in multiple ways. First, assuming current child allowances are extended, as Biden and other supporters desire, Omar’s legislation would, at the very least, double the payments per child (which now max out at $300 per month) to $600 per month in 2028, when her far broader UBI program would start. Second, the new policy would provide even larger checks ($1,200 per month) to nearly every adult in the United States, including parents, seniors and other adults not raising children. Finally, and unlike current child allowances starting as “temporary” policy for cost reasons, Omar’s legislation simply creates a permanent new federal UBI program, starting in 2028. 

One of the many problems with such a policy is that “universal” government checks are astronomically expensive. For example, the current temporary child allowances alone cost an additional $110 billion per year — the equivalent of $333 in higher annual taxes for every man, woman and child in America. Those costs are so great that those who wish to make the current temporary policy permanent can’t find the funds to pay for that, even in their mammoth budget bill. Instead, the legislation assumes only a temporary extension, which means the $3.5 trillion spending plan is more than $1 trillion short of what it really will cost in just the coming decade if extension supporters have their way. 

Omar’s bill, which amounts to “nearly doubling the federal budget,” simply ignores such concerns. The legislation includes not a single word about how to pay for its proposed tsunami of new government benefits. And all of that spending would be in addition to the more than 80 current programs providing cash, food, housing, energy, child care, health care and other benefits to mostly lower-income families.

The monthly child allowance checks to parents, created in the March 2021 pandemic relief law, reflect what is often described as the desire of policymakers to never let a serious crisis go to waste. Omar’s legislation, proposing a far greater wave of monthly checks to nearly all residents of the United States, dials that up to 11. 

One might be tempted to dismiss Omar’s proposal as a fringe bill offered by one of the most liberal members of the House. But that’s also how the world once viewed Sen. Bernie SandersBernie SandersOvernight Health Care — Presented by March of Dimes — Abortion access for 65M women at stake Hospitals in underserved communities face huge cuts in reckless 'Build Back Better' plan Sanders urges Biden to delay Medicare premium hike linked to Alzheimer's drug MORE (I-Vt.) when he was a House backbencher. Now chairman of the Senate Budget Committee, Sanders just crafted legislation — fundamentally transforming the nation’s budget and social policies — that was supported by every Democratic senator. That shows how anything is possible in America, including once-fringe positions becoming national policy. 

Matt Weidinger is the Rowe Fellow in poverty studies at the American Enterprise Institute. He is a former deputy staff director of the House Committee on Ways and Means.