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A guaranteed or targeted basic income (GBI), however, is very feasible at the state level. All of the basic income pilots in the U.S. are a variation of GBI and the recent Child Tax Credit issued by the federal government during the COVID-19 pandemic is lifted up as a type of basic income model. In general, GBI models can target the populations they serve in two main ways: front-end targeting through some type of means-testing, or back-end targeting through the tax system. 36 The Shriver Law Center recommends states choose one of three strategies to set up a GBI pilot or program: Expand or create a state tax credit. Create a public wealth fund. Create a new program infrastructure. A state pilot is not dependent on choosing a strategic approach for a basic income program. However, policymakers should be mindful of the pros, cons, and tradeoffs of each strategy and how the pilot evaluation can inform strategic direction for a fully realized program. Table 6 summarizes the key similarities and differences between each approach.

California: Compton Pledge. The second-largest guaranteed income pilot in the U.S. at present, this cash transfer program serves residents of the City of Compton with unconditional monthly payments. Program start: 2020. Payment amount: Around $450. Payment frequency: Monthly or bi-monthly (depending on participant). Program duration: Two years, ends 2022. Eligibility and application: Applications are not currently available as the program is in progress. How it’s funded: Philanthropically funded through private donors. Number of participants: 800. Big Leap. Currently the largest city-based guaranteed income pilot in the U.S., Big Leap provides unconditional direct cash transfer payments to low-income residents in the City of Los Angeles. Program start: 2022. Payment amount: $1,000. Payment frequency: Monthly. Program duration: 12 months. Eligibility and application: Eligible applicants must 18+, have at least one dependent child, reside in the City of Los Angeles, demonstrate Covid-related hardship and have income that falls at or below the federal poverty level. Participants were randomly selected from eligible applicants. Applications are currently closed. How it’s funded: $38 million in City of Los Angeles taxpayer funds. Number of participants: 3,200. Colorado: Denver Basic Income Project. With money coming from a nonprofit fund established in April 2021, this cash transfer program seeks to end the cycle of poverty by reducing housing and income volatility, including pathways to stable employment. Program start: Pending. Payment amount: Varies. Participants will either receive $6,500 in upfront payments plus a monthly payment of $500, monthly payments $1,000 per month, or monthly payments of $50 per month. Payment frequency: Monthly. Program duration: 12 months. Eligibility and application: Program participants will be selected by random lottery, but Denver residents can review the eligibility criteria on the program’s website. Applications aren’t yet open but the program anticipates “recruiting participants and launching the program in the first half of 2022.” How it’s funded: Philanthropically funded by a mix of private, corporate and foundation donors. Number of participants: 820. Florida: Just Income Gainesville. This cash transfer program serves formerly incarcerated people who are residents of Alachua County, Florida. Program start: Jan. 2022. Payment amount: $1,000 lump-sum payment then $600 monthly for 11 months. Payment frequency: Monthly. Program duration: One year. Eligibility and application: Eligible applicants were limited to formerly incarcerated persons with felony convictions, residency in Alachua County, and a submitted application. Participants were randomly selected from those who qualified. Applications aren’t currently available as the program is in progress. How it’s funded: Philanthropically funded by Mayors for a Guaranteed Income and Spring Point Partners. Number of participants: 115. Georgia: In Her Hands. In Her Hands is an initiative benefiting Georgia women, and is one of the largest cash transfer pilot programs in the South. Program start: Pending – applications are open. Payment amount: $850. Payment frequency: Monthly. Program duration: Two years. Eligibility and application: The program is open to women 18 and older who live in certain geographical areas, have income at or below 200% of the federal poverty level ($27,180 for individuals), and can prove economic setbacks due to Covid. Applications are rolling out on a by-community basis and can be found on the application page. You can sign up for the interest list to be notified about future opportunities. How it’s funded: $13 million philanthropically funded by the Georgia Resilience and Opportunity Fund. Number of participants: 650. Illinois: Chicago Resilient Communities Pilot. This cash transfer program ranks as one of the nation’s largest. According to Mayor Lori Lightfoot, the program seeks to “tackle poverty and put residents at the center of the economic recovery from the COVID-19 pandemic.” Program start: Pending – applications are open. Application deadline: May 13, 2022. Payment amount: $500. Payment frequency: Monthly. Program duration: 12 months. Eligibility and application: Eligible applicants must be 18 or older, live in the City of Chicago, have demonstrated hardships due to Covid, and have an income that falls at or below 250% of the federal poverty level ($40,770 for individuals). There’s an income calculator to help determine your eligibility. Participants will be selected by random lottery. How it’s funded: $31.5 million in federal Covid relief funds allocated by Chicago’s city council. Number of participants: 5,000. Louisiana: Shreveport Guaranteed Income Program. The results of this limited-scope cash transfer program are intended to help lobby for future programs at the state and federal level. Program start: Feb. 2022. Payment amount: $660. Payment frequency: Monthly. Program duration: 12 months. Eligibility and application: Eligible applicants included Louisiana residents who are single parents (you can review their definition) and residents of Shreveport with incomes at or below 120% of the federal poverty level. Applications are now closed and the program is in progress. How it’s funded: Philanthropically funded by Mayors for a Guaranteed Income and Caddo Parish Commission. Number of participants: 110. New Jersey: Newark Movement for Economic Equity. Newark’s guaranteed income pilot program is designed to support city residents experiencing housing instability. Program start: Fall 2021. Payment amount: Two semi-annual payments of $3,000 or bi-weekly payments of $250. Payment frequency: Semi-annual or bi-weekly (randomly selected). Program duration: Two years. Eligibility and participation: While applications for the project are currently closed, previous applicants must be at least 18 years old; live in the City of Newark; demonstrate income at or below 200% of the federal poverty line; and document adverse impacts from the Covid pandemic. How it’s funded: A mix of public and private funds, including federal Covid relief dollars. Number of participants: 430 to date. New York: The Bridge Project. As New York City’s first guaranteed income project, this cash transfer program supports low-income mothers during the first 1,000 days of their child’s lives in one of the nation’s most expensive cities. Program start: June 2021. Payment amount: $500 or $1,000. Payment frequency: Biweekly. Program duration: 3 years. Eligibility and application: To be eligible, households had to show incomes below $52,000 per year. Applications are currently closed. How it’s funded: Philanthropically by the Monarch Foundation. Number of participants: 600 to date.

Guaranteed income programs in American cities have surged over the past year, rising to 82 participating cities across 29 states this year, up from from 11 participating cities in 2021. Among major cities piloting a basic income program are Denver, Chicago, Los Angeles and Oakland, Calif. These guaranteed income programs provide some 26 million Americans in need a basic monthly payment, according to a report by Mayors for a Guaranteed Income, an advocacy group. That group and other advocates are looking at a fund run by institutional investors as a model to emulate. "There's a number of ways to pay for guaranteed income, from a sovereign wealth fund in which citizens benefit from shared national resources like the Alaska Permanent Fund," the mayors group's website says. The group did not return requests for comment. In prior years, guaranteed income programs derived much of the funding from philanthropists, federal dollars from legislation such as the American Rescue Plan Act and money from state/city general funds. "I have not heard of any guaranteed income (program) other than the Alaska Permanent Fund, which invests all over the place," said Mary Bogle, principal research associate at the Urban Institute, referencing Alaska's $73.7 billion institutionally managed portfolio used to provide dividends to state residents. "They're (guaranteed income pilot programs) using CBOs, or community-based organizations, to recruit pilot participants," Ms. Bogle said."And every pilot is different in terms of what they're trying to get at." Pools of capital managed by institutional investors that are used for common-good purposes are more common. The Louisiana Education Quality Trust Fund manages $6.5 billion in investments across 30 portfolios according to its website. Investment income funds the state's board of regents and the Board of Elementary and Secondary Education. The trust fund has allocations in equities, fixed income and mutual funds. Similarly, the $37.4 billion New Mexico State Investment Council, similar to Alaska, uses royalties and taxes from natural resources and public land to contribute to the state's budget, fund education and provide tax relief. It's also set to distribute $1.1 billion to the state's general fund and other beneficiaries this year, according to its website. "If these (guaranteed income pilot) programs are being put into place, particularly instances where you have a city or state that happens to have a large budget surplus at some point in time, then there can be a very strong argument at that point to be made that 'Hey, we should take this and turn it into a sovereign wealth fund,'" said Jim Pugh, co-director of the Universal Income Project, an advocacy group for guaranteed income programs. The testing period is short. Mr. Pugh said that due to the pilot programs only lasting a year or longer to prove the effectiveness of guaranteed income, there hasn't yet been much discussion about using an underlying fund, like the Alaska Permanent Fund, as a model to fund itself full time. Some advocates of guaranteed income programs see the idea of a full-time program being implemented somewhere in the country as inevitable. "A dual purpose part of it is continuing to build an evidence base around what impact it has on people's lives," Mr. Pugh said. "Part of it is just as a demonstration, a kind of proof of concept showing that 'oh, hey, this actually works.'" Mr. Pugh said he believes the U.S. is just one or two years away from seeing its first full-time guaranteed income program in either a city or state. "We are seeing currently elected leaders thinking through how they can make that transition from a demonstration or a pilot into a program that's going to be more long lasting for their residents," said Madeline Neighly, director of guaranteed income at the Economic Security Project. The expansion of tax credits, such as the child tax credit under the American Rescue Plan, is an avenue that her organization advocates as a form of guaranteed income.

Guaranteed income experiments are popping up or expanding around the country, offering no-strings-attached temporary cash payments to low-income residents. Some governmental programs limit what recipients can or cannot pay for with their assistance. Guaranteed income programs select certain groups impacted by income inequality -- such as the impoverished or the formerly incarcerated -- and gives them monthly cash payments for an allotted amount of time. This allows participants to use money on whatever they need or want, which allows residents to fill in the gaps of what other financial assistance may not cover. These programs have been lauded by recipients, who say the payments have acted as a support system and offered mental and financial relief. Recipients have said the money has gone toward things like bills, debt repayment, childcare and more. Some research has indicated programs have the ability to increase employment in participants, improve financial and housing stability and improve physical and mental health in participants. The programs are also intended to address racial, wealth or income inequalities. Guaranteed income was a proponent of the civil rights movement in the 1960s, backed by Martin Luther King Jr. to address racial income inequality. Critics of guaranteed income argue that these programs may encourage dependency and stop people from working -- though such claims have been challenged -- or may be too expensive to maintain. Some call it a "band-aid" solution to the issue of economic inequality. Some of the programs are privately funded, while others have been backed by federal, state or local funding.

In the United States, Hawaii recently approved a state house resolution that will establish a committee to explore and research potentially implementing UBI within the state. 35 The resolution states that a "paradigm shift in policy" will be necessary as automation, innovation, and disruption begin to rapidly worsen economic inequality by displacing significant numbers of jobs in Hawaii's transportation, food service, tourism, retail, medical, legal, and insurance sectors.3 6 Hawaii's unemployment rate is currently lower than the national average. 37 However, State Representative Chris Lee, who introduced the resolution, claims that the unemployment rate does "not capture the real life experience of families working part time jobs without benefits, or seeing stagnating wages bust a rising cost of living."' 38 The "inevitable and accelerating" forces of automation and innovation will not create many new jobs, he argues, and "[t]raditional forms of government assistance are ill equipped" to address such forces. 39

According to Lee, UBI is necessary "to be sure that everybody will benefit from the technological revolution that we're seeing to make sure no one's left behind."4 ° Lee believes that rather than serving as "a support system for welfare recipients," UBI will act as an "empowering tool," which will give everyone new opportunity.4 People may use the aid to go back to school for better education, Lee argues, or pursue work they are passionate about, instead of leaving the workforce.4 2

Another model for statewide implementation of a guaranteed income would be declaring periodic dividends from a state government managed sovereign wealth fund. One prominent example is the annual dividend from Alaska’s Permanent Fund. After oil was discovered in Alaska in the 1960’s, the Prudhoe Bay Oil and Gas lease sale in 1969 brought in $900 million in state revenue. Following the completion of the Trans Alaska Pipeline in 1974, the state grappled with how to invest its anticipated oil royalties. In 1976, Alaska residents voted to amend the state’s constitution to allow the creation of the Alaska Permanent Fund, in which at least 25 percent of all the state’s oil revenue would be placed. The following year, the Fund began with an initial deposit of $734,000. In 1980, a state law created the Alaska Permanent Fund Corporation to invest and manage the fund while also creating the Permanent Fund Dividend Program which has paid Alaskans an average of $1600 annually. Since 1980, the fund has grown exponentially from its initial investment with a 2021 value of nearly $82 billion. Administered by the state’s Department of Revenue, every year each Alaskan submits an application, largely to verify their residence in the state, and then receives a check in an amount determined by the state legislature based, in part, on the performance of the fund’s investments. Although the Permanent Fund Dividend is distributed to Alaska residents regardless of their wealth or income, other states could conceivably embrace a guaranteed income model over a universal model and create income and wealth thresholds for determining eligibility for dividend payment. A number of states have sovereign wealth funds like the Alaska Permanent Fund that originated from natural resource revenue or public land holdings. Texas, New Mexico, Wyoming, North Dakota, Alabama, Utah, Oregon, Louisiana, and Montana, all have funds, most of which are used to fund public education. States could establish funds like these to grow wealth for the purpose of a state-level guaranteed income. While most current models began with investment of revenue from natural resources, annual investments into a state fund could also be powered by equitably raised tax revenue.

Why should states engage with guaranteed income? Every person deserves to live with dignity and have their basic needs met. After decades of rollbacks and disinvestment, our current social safety net is insufficient given the economic situation we face. In the United States there is unconscionable and accelerating wealth inequality,1 wages have been stagnant for 40 years2 and, both before3 and throughout4 the coronavirus pandemic, many Americans struggle to meet their basic needs. In the richest country on Earth, elimination of deep poverty is attainable and long overdue. Historically, states have played a critical role in testing concepts to improve the lives of low-income residents and craaeated a blueprint for anti-poverty measures that can be implemented nationwide.5 It is time to boldly reimagine and revitalize an eroded social safety net, and states have an opportunity to lead by example. It is time to boldy reimagine and revitalize an eroded social safety net. The devastation of the COVID-19 pandemic prompted mitigation strategies intended to get cash to people who were impacted. Federal policies such as increased unemployment insurance, an expanded and fully refundable Child Tax Credit (CTC), and stimulus checks have led to burgeoning support for permanent cash transfer programs like a guaranteed income. Additionally, state and local governments added to relief efforts by using federal dollars provided by both the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the American Rescue Plan Act (ARPA) to fund cash transfer programs of their own.6 At the same time, an increasing number of municipalities and other units of local government across the country are exploring guaranteed income demonstrations in their community, and states should seize this opportunity to build upon this work. Local guaranteed income programs, though limited in scope, produce incredibly valuable data to prove the efficacy of unconditional cash programs, which are critical for states to obtain buy-in from the necessary stakeholders. One limitation of local programs, however, is that they often aren’t scaled to study the potential for community-level change or other broader economic impacts. At the federal level, the expanded CTC being debated as part of President Biden’s American Families Plan represents a form of guaranteed income for 39 million households.7 Unfortunately, federal conversations around nationwide cash transfer programs – like an expanded CTC – have been underwhelming. As of December 2021, the Build Back Better Act does maintain the fully refundable nature of the expanded-CTC, allowing low- and no-income families excluded pre-pandemic to continue to receive a credit, but only a temporary extension is being considered for the increased amounts families received during the pandemic. While the Build Back Better Act has not yet passed, the stimulus checks and expanded CTC have moved the needle, breaking down barriers to moving cash policies at any level of government. We now have a much better sense of what is possible when it comes to distributing monthly cash payments, and we have data and stories of the impact these policies have in the lives of low- and middle-income earning families. In light of the current limits at the local and federal level, there is an opportunity for state governments to explore ambitious, publicly-funded cash transfer policies that: promote dignity and greatly improve the lives of their low-income residents; add to a growing body of research with assessments of larger scale positive impacts across geographically and racially diverse areas; utilize the revenue raising powers of state government; and could be a model for a permanent federal program. We need a permanent federal guaranteed income, but political gridlock and polarization threaten to frustrate attempts at a federal program in the immediate term. States have an opportunity to push closer to that ideal with large scale, publicly funded, permanent programs of their own that will provide essential data and experience toward the realization of a federal program. This guide seeks to arm state-level advocates and policymakers with information regarding the choice points in program design, the positive impacts shown by existing research, and special considerations for states including options for guaranteed income implementation, interactions with existing public benefits programs, opportunities for public funding, and promoting racial equity.

This structural inequity, coupled with decades of cruel immigration policies, has made it harder for immigrants to obtain economic stability. States have an opportunity to provide needed support and progress toward economic and racial justice for immigrant communities excluded from the social safety net by ensuring robust immigrant eligibility for state-funded cash transfer programs. Some states provided benefits both before and during the pandemic, to try to address some of the shortfall of federal programs and federal relief passed in response to COVID-19. California established a $125 million fund to help undocumented workers who cannot access unemployment insurance. Oregon added $20 million to the Oregon Worker Relief Fund which was created to provide temporary financial relief to undocumented workers. Connecticut provided a total of $3.5 million to aid undocumented families with rent relief and direct financial aid. Lastly, in Fiscal Year 2021 Illinois began providing Medicaid coverage for low-income seniors regardless of immigration status, making it the first state to cover older undocumented immigrants.102 Nothing in federal law would prevent states from providing state funds to immigrants in the form of a guaranteed income or other cash transfers, and offering long-overdue support to immigrants who are critical to the success of our communities. The legacy of so-called “welfare reform” and decades of disinvestment have resulted in a social safety net that perpetuates racism and is fundamentally incapable of allowing people to meet their basic needs and live with dignity. It is time to boldly reimagine the social safety net, eliminate deep poverty and provide stability to middle income households by implementing a guaranteed income. Ultimately, a federal program should be vigorously pursued, but a mass movement needs to be built to overcome gridlock at the federal level. States have a vital role to play as leaders in building public policy. Through creation of state-level guaranteed income programs funded through equitably raised revenue, states can progress toward economic justice for their lowest-income residents regardless of employment status, supplement the existing safety net, and build necessary momentum toward a federal program needed to meet current and coming economic challenges.

For the past 30 years, the most furious devolution debate has involved the federal welfare system. The 1996 reform—which replaced the open-ended Aid to Families with Dependent Children (AFDC) program with the Temporary Assistance for Needy Families (TANF) block grants to states—exposed the radical differences between conservative and liberal approaches to poverty relief that make a case for state customization and experimentation based on local values. AFDC was the first broad national welfare entitlement (it was part of the 1935 Social Security Act); replacing it was the first revocation of a major entitlement for low-income families. While TANF is only one piece of the federal welfare system, it was a major departure from the past and does inform the federalism debate: first, its existence was made possible by the example of welfare reforms undertaken in Wisconsin, Connecticut, and New York City in the early 1990s, using federal AFDC waivers to impose work requirements and time limits, as well as require child school attendance;60 and second, TANF displayed many of the promises (and challenges) of welfare devolution. TANF replaced the open-ended AFDC cash entitlement for families (with minor children) earning below a certain income with a fixed-amount block grant that allowed states to create their replacement system—but one that must require work activities and include a fiveyear lifetime limit on benefits (both with significant exemptions). Beyond that, states were given broad latitude to design their welfare systems as long as they met four federal goals that generally involved assisting needy families, promoting work and marriage, and reducing out-of-wedlock pregnancies. The law also required states to contribute their own funds to the new system—80% of what they had spent in the old AFDC system.61 On the positive side, TANF has shown that block grants can succeed if Washington sets broad goals and provides states with flexibility in program design. Despite hysterical predictions of mass starvation, third-world poverty, and death,62 TANF has exceeded even its most optimistic predictions. Following the passage of welfare reform, the number of families collecting AFDC/TANF quickly fell from 4.5 million to 2 million—and then to 1.2 million by 2018.63 Many of these families moved into full-time jobs that paid much more than welfare and began the journey toward self-sufficiency.64 The poverty rate quickly fell to its lowest level in nearly 30 years; the black poverty (and black child poverty) rates fell so far that even the “Great Recession” of 2007–09 did not raise poverty rates to pre-TANF levels.65 While critics credit the economic boom of the late 1990s for this progress, previous economic expansions did not produce such large poverty and caseload reductions, 13 and subsequent recessions showed a lower poverty ceiling than before 1996 for most populations. Still, the TANF devolution was imperfect. States exploited loopholes in the law to exempt most families from work requirements and ignore the five-year time limit.66 The federal grant has been frozen at $16.5 billion since 1996, despite cumulative inflation of 64%—although sharply reduced caseloads have roughly maintained per-family spending, adjusted for inflation.67 A few outlier states have offered very low cash benefit levels, rejected as many as 98% of TANF applicants, and diverted funds into questionable or illegal uses.68 The percentage of families in deep poverty has not fallen. The strongest criticisms of TANF have come from liberal states that object to the federal work requirements and time limits. These states prefer to put more resources into education and training (or even return to open-ended assistance with no obligations for recipients) and not be constrained by federal goals such as promoting marriage or reducing out-of-wedlock births. The result of these complaints was the Obama administration’s offer to waive (with questionable legality) some of the work requirements for some states.69 To be sure, state and local customization is vital for a well-functioning welfare system. Every state and local community has unique poverty drivers and needs. Some communities may be plagued by high housing costs, extraordinarily expensive child care, or energy costs. Moving welfare recipients into jobs may be more feasible in one local economy than another. Even within a community, each low-income family has its own story and poverty solution. Furthermore, liberal and conservative communities have their preferred poverty approaches based on local values. These considerations do not imply that the country (or low-income Americans) would be better off by returning to AFDC; they argue, instead, for better rationalization of the federal welfare system in the direction of greater devolution. In any case, the federal welfare system is a bureaucratic mess with seemingly no one in charge. It consists of approximately 80 different federal meanstested programs spread across a half-dozen federal departments and dozens of federal agencies. For example, the Department of Agriculture runs several food programs, the Department of Housing and Urban Development (HUD) operates housing and urban aid, the Department of Health and Human Services (HHS) contains a multitude of cash programs, and the Treasury Department coordinates low-income tax credits. Many federally funded welfare programs are overseen by different congressional committees and reauthorized in separate bills that are enacted years (or decades) apart from each other. Lacking any consistent approach, these programs contain wildly divergent eligibilities, benefit formulas, and requirements from recipients—even the programs that interact with each other. Some programs block grant money to states, others rely on matching grants, and others bypass states entirely. Countless state welfare programs have their own approaches, eligibilities, and benefit levels, as well. In sum, federal and state welfare programs spent $1.1 trillion in FY 2016—enough to grant $100,000 per year to each of the 10 million families with incomes at or below 125% of the federal poverty threshold (or to provide $67,000 per family excluding health-care benefits).70 In 2016, just the cash, food, and housing assistance came to 140% of the amount needed to bring every American family out of poverty.71 In fact, much of it does—as the federal poverty rate does not include most federal benefits. Additionally, antipoverty programs assist millions of struggling families whose earners exceed the official poverty line of $21,960 for a family of three. From the standpoint of devolution, the pertinent issue is what states could do with all federal antipoverty funds consolidated into one block grant that roughly matches how much each state is already receiving. Each state could combine the federal block grant with its own funds to build a coordinated system of assistance to vulnerable families. Rather than navigate a maze of dozens of federal programs, families could visit one local welfare office and enroll in one coordinated system that is tailored to their needs. These offices could also assist with education, job training, and job placement. Policy scholar Oren Cass has called such a system a “Flex Fund,” noting that such a consolidation “increases the likelihood of constructive reform by increasing accountability and eliminating unfunded mandates from above or efforts to game the system from below.”72 Not all federal means-tested benefits can be part of this block grant. Earned Income Tax Credit (EITC) would remain part of the federal tax code. However, aggressively expanding EITC can push enough working families out of poverty so that fewer families would need to enroll in the new state fund. Some may suggest a separate fund for health-care benefits (discussed below). This block grant concept is not new; yet it can address criticisms of past proposals. For instance, while the TANF block grant has been frozen at $16.5 billion for nearly 25 years, this new block grant can be designed to expand automatically annually by a formula that accounts for state poverty populations and the cost of Devolution: Four Proposals to Empower States and Reduce Washington’s Political Strife 14 living. It can also include recession triggers for additional increases. As with TANF, states can be required to continue contributing to this welfare system at their previous levels. And if states truly fear being cheated by Washington on the size of the grant, they can be given a frequent choice between the current system or accepting this grant. Perhaps the most challenging issue is that of federal performance standards and goals. Federal work requirements have been successful in TANF, yet more liberal states have supported more of an education and training approach, with additional work exemptions. Liberal states have also preferred to focus more on reducing poverty (by any means) than encouraging work or reducing welfare caseloads. This can all be negotiated while emphasizing that devolution means trusting states to experiment with new approaches that reflect their values. Relatedly, states that accept a federal block grant must accept basic accountability rules to ensure that funds are not misspent and that a minimum safety net is maintained. States that set absurdly low benefit levels or reject nearly 100% of applicants must be subject to federal sanctions. The continued failure to produce a welfare system that meets minimum federal standards should result in the revocation of the state’s block grant and its re-enrollment in the current federal system that sets eligibility and benefit levels for most programs. The vast majority of states are clearly equipped to design and run their welfare system if they choose. Federal accountability standards can address any outlier states that may misspend funds or attempt to eviscerate their safety net. Some states may choose more education, training, and open-ended benefits, while other states more aggressively push work requirements. Each state should reflect its own values and discover which approach works best.

The $750 billion aid system is a roundabout way to fund state and local activities that the deficit‐​ridden federal government cannot afford. The aid system does not deliver efficient public services, but rather delivers bureaucracy, overspending, and federal micromanagement. It undermines policy diversity and political accountability. The states are entirely capable of funding and operating their own programs. President Reagan’s 1987 executive order on federalism noted, “In most areas of governmental concern, the states uniquely possess the constitutional authority, the resources, and the competence to discern the sentiments of the people and to govern accordingly.” President Trump’s most recent budget proposed small cuts to federal aid. But that proposed reform provoked a prominent liberal think tank to issue a study defending aid. The study’s first sentence was, “Federal funds that go to state and local governments as grants help finance critical programs and services on which residents of every state rely.” But if aid funds “critical” programs, then federal cuts would prompt the states to fill the void with their own programs, and those programs would likely be superior for the reasons discussed. It is understandable that federal policymakers are eager to try and fix the nation’s many ills. But they should appreciate that the states can handle domestic policies by themselves and that federal intervention is often counterproductive. The optimism of previous decades about the ability of federal aid programs to efficiently solve state and local problems was misguided.

Job-dependent health coverage can create instability, as highlighted by the crisis created by the COVID-19 pandemic (Collins et al. 2020). Between 2019 and 2021, more than 1.2 million more individuals have obtained health insurance during the special and open enrollment periods through the marketplaces created by the Affordable Care Act. Between March and August, 2020, 5 million other people newly enrolled in Medicaid and CHIP, many after losing their jobs and employer-sponsored health insurance. Prior to the pandemic, a substantial majority of the states had adopted the Affordable Care Act’s Medicaid expansion, making poor adults younger than age 65 whose current incomes are below 138 percent of the poverty line eligible for Medicaid, which almost certainly helped significant numbers of residents of those states remain insured during the crisis. Figure 12 shows Medicaid and CHIP enrollment growth between February and August 2020. Interestingly, of the 13 states that have not implemented the ACA’s Medicaid expansion, four (Florida, Missouri , Utah, and Wyoming) saw increases in Medicaid and CHIP enrollment of over 10 percent in the 6 months following the onset of the pandemic.7 Of the 29.8 million individuals without insurance in 2019, two-thirds were eligible for subsidized health insurance: roughly 20 percent met requirements for Medicaid and CHIP, and roughly 50 percent were eligible for a marketplace subsidy or subsidized employer-sponsored health coverage. Employer-sponsored health coverage is subsidized for many individuals through employer contributions, as well as through arrangements that exclude from taxable income employee premium payments deducted from paychecks

For families with modest incomes and with children who do not have private health insurance and do not qualify for Medicaid, there is CHIP. CHIP, which is administered by the states and funded jointly by the federal and state governments, provides health coverage for children in families who cannot afford private insurance but whose incomes exceed the Medicaid income eligibility limits. States can operate CHIP as a separate program or as a component of Medicaid. CHIP has significantly increased health insurance coverage for children (Gruber and Simon 2008), including among the children of immigrants (Bronchetti 2014). States have some flexibility to set the terms of the program, such as charging premiums, which can result in lower take-up and a shorter duration of enrollment (Dague 2014). CHIP improves children’s health (Bronchetti 2014) and educational outcomes such as test scores (Levine and Schanzenbach 2009), as well as high school and college completion (Cohodes et al. 2016). In adulthood, enrollment is associated with better labor market outcomes, including higher labor force participation rates and earnings (Brown, Kowalski, and Lurie 2015).

A more experimental path to disability reform, proposed in a THP proposal by Jeffrey Liebman and Jack Smalligan (2013), would institute three demonstration projects to build evidence on the impact of various types of early interventions for disability applicants. The first trial would screen applicants to target those with highest potential for returning to work if provided the proper range of services, and would supply candidates with targeted vocational and health interventions and some form of wage-replacement to test improvements in well-being and employment outcomes. A second trial would allow states to redirect portions of existing funding streams for programs like Medicaid, TANF, and vocational training to target populations that are at risk of receiving lifetime SSI and SSDI benefits, offering states incentive funding for measures to reduce participation in disability programs. The third demonstration project would provide a tax credit incentive to employers against their disability insurance payroll taxes for employers that reduce their disability incidence by at least 20 percent.

State social security fund management agencies include the State Social Security Administration and the state's internal social security fund management agencies. The state's Social Security Administration is responsible for overseeing the state's social security management, coordinating federal and state governments' social security relationships, and providing federal social security services to citizens. The state's internal social security fund management agency is mainly responsible for the fund management of social security and supplementary guarantees established by each state. The US state government has a very large right to manage social security funds. They can determine the payment standards and payment standards of certain insurance items and determine the investment operation mode of some insurance funds. In some cases, the social fund protection management agencies of the states will jointly discuss a certain issue or jointly supervise a certain institution

Despite that sordid background, for most of U.S. history, federalism also ensured that the units of government that were most capable of solving health problems—the states—had the legal authority to do so. When few people traveled and most goods were locally produced, the states (and their cities and towns) were in the best position to respond to disease outbreaks. States and localities could and did impose quarantines, license physicians and institute a range of other measures designed to protect the public’s health. All of these actions were grounded in the states’ so-called police powers, the sovereign powers that the states retained when they joined the federal union. For the most part, courts deferred to such powers, leaving states with broad authority over public health. Indeed, courts have repeatedly emphasized the centrality of public health to the states’ police powers. The federal government, in contrast, lacks a police power. Its authority is limited to the areas specifically enumerated in the Constitution. Health is not one of those areas. Nevertheless, the federal government has long used its might to regulate international and interstate commerce, and to tax and spend for the general welfare, for the protection of health. For example, in 1798 Congress enacted a law providing Relief of Sick and Disabled Seaman, which led to the establishment of marine hospitals along navigable waters. In 1848 Congress passed the Drug Importation Act, which required the U.S. Customs Service inspection to block the importation of adulterated drugs. As the economy became more integrated and travel became faster and more frequent, health threats were increasingly recognized as nationwide in scope. In turn, the federal government’s involvement with health expanded. In 1889, Congress established the United States Public Health Service. In 1906 it passed the Pure Food and Drug Act, leading to the establishment of the Food and Drug Administration. In 1965 Congress created Medicare and Medicaid. The Environmental Protection Agency was established in 1970. One year later, the Occupational Safety and Health Administration was born. Today the federal government’s role in health policy is pervasive. Many federal health programs rely on what is commonly known as “cooperative federalism.” The federal government sets minimum standards and pays much of the costs. In exchange, the states, federal territories and tribal jurisdictions follow federal guidelines, do much of the on-the-ground work and, at times, set standards that are even more protective of health than those set by the federal government. Still, many Americans cling to the nostalgic notion that the protection of health belongs primarily to the states, territories and tribal jurisdictions. In the early months of the COVID pandemic, then-President Trump expressed that view, telling governors that they were going to call their “own shots.” That’s a sentiment that the conservative justices of the Supreme Court seemed to share last June when they limited EPA’s ability to address climate change and overturned Roe v. Wade. Photo of Lizelle Hererra carried during a July protest in Santa Monica, Calif., of the Supreme Court’s decision to overturn Roe vs Wade. Hererra was arrested in April in Texas for allegedly self-inducing an abortion. Credit: David McNew/Getty Images There are times when it makes sense to leave health policy to the states. Some health threats are truly local. Consider an unsanitary restaurant. It probably doesn’t require a nationwide solution. By leaving restaurant inspections to states and local governments, the public is more likely to be protected against unsafe meals. Likewise, states and local governments are in a far better position than the federal government to provide many on-the-ground health services, from sexually transmitted disease clinics to tuberculosis screenings. The day-to-day work of public health departments depends in large measure on their placement in and relationships with local communities. States, territories, and tribal government can also serve as “laboratories of democracy,” to borrow Justice Louis Brandeis’ term. They can develop innovative health policies that other governments and even the federal government can copy. For example, Massachusetts 2006 health care reform law served as the model for the federal Affordable Care Act. States and cities have also led the way in tobacco control, banning youth access and indoor smoking years before the federal government made a serious effort to reduce cigarette consumption. Policy differences between jurisdictions can also serve as a type of a natural experiment, from which policy makers can learn which laws work and which don’t. Researchers can look at how varying motor vehicle safety laws in different states or different childhood vaccine laws correlate with motor vehicular accidents and vaccination respectively. Much of what we know about the efficacy of health policies comes precisely from such studies.

Despite this initial lack of political conflict in the Medicare and Medicaid Programs, tension ultimately arose that recapitulated some of the themes of the historical transformation of health insurance in the twentieth century and the political debate over Medicare in the sixties. Medicaid, for example, emerged in 1965 as a program aimed at the poor and administered by the States. In these respects, it resembled the concept of sickness insurance that had been prevalent in the progressive era, although it covered the costs of health care rather than providing temporary disability insurance and it did not reach the entire working class, just those members of it who happened to qualify for welfare. Over the past 40 years and in particular since the 1980s, Medicaid has expanded beyond its roots as a welfare program to cover more people in need of medical services. In 1987, Congress widened the scope of the program to cover pregnant women and children living in families with incomes nearly 100 percent above the Federal poverty level (Morgan, 1994). As a result of such actions, a State program endures, even thrives, as a major component of the U.S. approach to national health insurance, a fact that might have surprised the creators of Medicare in 1965. Suggestions that the Federal Government take over the Medicaid Program arise periodically, as in 1982 when President Reagan suggested that the States take over the Aid to Families with Dependent Children Program and that the Federal Government pick up all the costs of Medicaid (Berkowitz, 1984). However, none of these suggestions have moved beyond the proposal stage. As for Medicare, it was modeled on health insurance practice that was current in 1965 in ways that respected the contribution that the private sector had made to health care delivery and finance. No one in Congress seriously proposed that the Federal Government should get directly involved in the health care business by operating hospitals or drafting doctors into national service. The program also reflected some of the wisdom of Falk et al. from the thirties and forties who had wanted a health insurance program run separately from cash disability programs. The doctor who treats a patient does not also have the right to certify him or her for disability benefits (Berkowitz, 1987). Furthermore, Medicare was a national program, rather than a source of funds for State programs. Still, the story of Medicare over the past 40 years has been one of experimenting with elements of choice and of cost containment while trying to maintain the quality of care for the Nation's elderly. State waivers, which permitted variations in practice from State-to-State, figured prominently in the development of Medicare in the seventies and eighties. The program's demonstration waiver made it possible for States to test the prospective payment system for hospitals that ultimately became a formal part of the program in 1983 (Shirk, 2003).

There is a trend toward more state-level health policy development and implementation in the United States, with less emphasis on homogenous federal reforms. Given the inherent challenges posed by the naturally occurring variation in such natural policy experiments, new methods are needed to take into account differences in policy implementation. We describe a method based on Delphi assessments and analysis of source documents relevant to policy implementation that may be useful for assessing differential impacts of SIM across states. Importantly, the SIM implementation factors prioritized by the expert panel process included the extent of behavioral health integration and the depth and breadth value-based payments, which were recently found to be important differentiators of SIM implementation in national evaluations of round 1 SIM states.13,14 As our natural experiment research moves forward, we will directly examine the impact of implementation variation on healthcare utilization and outcomes. We hypothesize that SIM states with high implementation intensity for the prioritized areas and greater resources will achieve relatively greater reductions in preventable utilization and improved patient outcomes.

Partly due to the ACA, health care cost spending growth has slowed in recent years. Before 2014, there were five years of historically low growth, and 2011 was the first time in a decade that spending on health care grew more slowly than the U.S. economy. Health care costs are still projected to grow faster than the overall economy, however, and health care spending already puts tremendous pressure on state and federal budgets and limits spending on other important services. More needs to be done to sustain this slowdown in growth. The current political environment makes it unlikely that reforms to control system-wide health care costs will be achieved at the federal level in the near future. States, however, are well-positioned to take the lead on implementing cost control and quality improvement reforms. Indeed, many states are already innovating and seeing positive results. There are several advantages to implementing reforms at the state level. State-level reforms can be tailored to work best for each state, depending on its size and demographics and the structure of its insurance markets. States also have considerable authority over the regulation of health insurance and the provision of health care within their borders. States control their own insurance markets: They run their Medicaid and CHIP programs and state employee plans, and certain states run the exchanges for individual health insurance. States also control the rate review process, scope-of-practice regulations, physician licensing, antitrust laws, and provider and insurer regulations. Lastly, states and governors have considerable convening power to bring together diverse stakeholders, making reform efforts more politically feasible. The innovations that some states are implementing to reduce costs while maintaining or improving quality can and should be replicated by other states. Following is a comprehensive summary of options that states can choose from to improve the quality and sustainability of their health care systems. Generally, these options relate to implementing new payment models, increasing accountability and transparency, collecting more data, increasing the use of high-value services and practices, and removing barriers to effective practices. (More detail on each of these options and examples and successful strategies from pioneering states can be found in a recent report from the Center for American Progress.)

Despite the raised awareness around the issue of reparations, the political will to enact a federal plan is currently lacking. H.R. 40, a bill to establish the Commission to Study and Develop Reparations Proposals for African Americans, is an important first step toward passing such a federal plan, but has yet to be brought to the House floor for a vote in its 32-year history. In the absence of a federal plan, various states and localities have convened their own commissions and, in some cases, enacted their own reparations-style plans at the sub-federal level (i.e, below the federal level). California’s Reparations Task Force represents the largest state effort to investigate reparations thus far, but cities like Evanston, Illinois, St. Paul, Minnesota, and Providence, Rhode Island have all investigated and worked toward creating and implementing programs under the auspices of reparations. As more states and localities attempt to design reparations plans, it is important that they keep certain principles in mind to ensure that the plans are effective as reparations. There is an important difference between policy that is simply “good” for Black people or people of color more broadly, and policy that is reparative. Darity and Mullen identify three criteria for an effective federal reparations plan. The plan must include acknowledgement and apology for the harm committed; it must provide material redress for that harm; and it must bring closure through a mutual understanding between the beneficiaries (white Americans) and victims (Black Americans) of the oppressive systems that were implemented. In this post, I expand these criteria slightly to provide guidelines for states and localities that are attempting to create their own reparations-style plans in the absence of a federal effort. In addition to acknowledgement and redress, I suggest that any sub-federal reparations plan that aims to be effective should: Specify what harms are being addressed and who will benefit. Stay within its capacity to provide redress for its harm—and avoid absolving the federal government from its responsibility. Commit to structural change designed to prevent future racial injustice. Sub-federal reparations plans should acknowledge and apologize for the harm done

— Louis Weathers had a stable job and was married when he decided to buy a home in the Chicago suburb of Evanston in 1959 – but high interest rates and White real estate agents who seemed adamant about keeping him and other Black residents out of certain neighborhoods nearly discouraged him. More than six decades later, the 87-year-old received a payout to make up for the discriminatory housing practices that he and other Black residents experienced between 1919 and 1969. After three years in the making, Evanston gave Weathers and 15 other Black residents $25,000 each in May to put toward a down payment on a home, mortgages or home repairs. Like Weathers, generations of Black Americans have faced disparities in housing, transportation, business and other areas. And as descendants of enslaved people many say they have not been compensated for their labor and the lingering effects of systemic racism. Recent federal reparations efforts have stalled in Congress, but cities like Evanston are working to atone for the harms caused by slavery and institutional racism – and address the racial wealth gap. Last week, Detroit’s city council unanimously approved how it would structure the city’s first reparations task force. Meanwhile in Massachusetts, the Amherst Town Council approved the creation of a fund to allocate a total of $2 million in reparations over the course of about a decade. The push for reparations has gained momentum on the heels of the national uprising in the aftermath of George Floyd’s killing in 2020, which rekindled the Black Lives Matter movement. Kamilah Moore, of the California Reparations Task Force, said she sees reparations “as fulfilling the promises made to her ancestors” in the mid-19th century following the abolition of slavery. The federal government now has the chance to live up to those commitments, she said. “You can’t talk about a racial reckoning in this country without mentioning reparations,” she said. “Reparations are comprehensive enough to address all of the ills that still impact the African American community.” From cash payouts to issuing extensive reports and building a bureaucratic system to examine what reparations could look like, here is what some local and state governments have done so far: Evanston, Illinois Robin Rue Simmons, a former Evanston alderman who introduced the idea to the city in 2019, said the Restorative Housing Reparations Program was created to remedy some of the harm caused by the city’s historical anti-Black housing policies. When it was approved last year, it was considered the country’s first reparations program. Since it was founded in 1860s, the city “created systems to segregate, limit, deny, and control Black citizens,” who were denied equal access to many areas, including schooling and housing. In the early 20th century, real estate agents developed a practice of informal racial zoning, almost exclusively offering Black residents housing on the city’s west side, according to a 2020 report commissioned by the city that details how the city perpetuated discriminatory practices toward Black residents. The report also highlights that Evanston banks typically refused mortgage loans to Black residents seeking to buy homes in predominantly White neighborhoods. When the city’s Restorative Housing Reparations program opened online applications in September, officials received more than 600 applications. In January, Weathers and 15 others were chosen at random from the first 122 applications submitted by eligible Black residents. The program’s payments were funded by donations and money collected by the city from cannabis sales taxes. Weathers says he was “elated” when he learned that he would receive a payout and decided it could help current and future generations of his family. Instead of using the money for himself, he transferred his payout to his 60-year-old son, Michael Weathers, to put toward his mortgage. “It was a no brainer,” he said. Rose Cannon, a long-time Evanston resident, said she was initially excited when she heard about reparations efforts coming to Evanston, but grew to be against them once the conversation shifted from direct cash payments to a housing program. For her, conflating housing equity efforts with reparations minimizes the larger reparations movement. “When you use the term reparations, we would like for it to be associated with the full repair of human beings, to close the racial income gap,” Cannon said. “Housing can only be a portion of it, maybe a silo of it.” The current program, Simmons said, is the city’s initial reparations effort and was informed by a mass of research that led them to identify the legacy of discriminatory housing practices. Following more work to address housing disparities, Simmons said the city is expected to focus its reparations efforts on economic development and education initiatives. A committee has recommended grants for Black businesses and the establishment of a Black history museum in the city, she added. “It’s not so much that the initial 16 recipients are going to completely transform the life circumstances for all of Black Evanston, but the fact that it has happened means that we can expand it and we can build on it and do more,” Simmons said. “Not just in housing, but in other areas as well.” St. Paul, Minnesota Cities like St. Paul have taken steps to build a bureaucratic system to examine what a reparations package for Black Americans could look like. After the city apologized last year for its role in the institutional and structural racism experienced by its Black residents, officials established an advisory committee to create a framework for a reparations commission. A year later, the advisory committee has released a report recommending direct cash payments to eligible Black residents and the establishment of a permanent reparations committee focused on implementing reparations to address racial disparities in housing, healthcare, education, employment and more. As far as funding, the report identified various sources, including the city’s funding under the American Rescue Plan, sales taxes and philanthropic donations. Trahern Crews, a member of the St. Paul city council’s reparations legislative advisory committee, partially influenced reparations efforts in Minnesota’s capital city. “The fact that [Evanston] led on [reparations] and they were so bold to actually do it, let our city council know that this is something that can happen, and it can happen in our lifetime,” Crews said. Although Minnesota was a free state, Black Americans were enslaved at St. Paul’s Fort Snelling and used for free labor by the US Army. Following the abolition of slavery, they faced forced segregation, redlining, housing discrimination, and the destruction of Saint Paul’s Rondo neighborhood – the city’s center of Black business and cultural life. It was destroyed to give way for the construction of an interstate highway, the advisory committee’s report says. Yohuru Williams, another member of the committee, said the task force decided to take a more “holistic approach” to reparations because the damage of institutional racism is uneven and impacts different descendants of slavery in varying ways. “It may be inflicted in one way for one set of descendants,” said Williams, a history professor and founding director of the Racial Justice Initiative at the University of St. Thomas. “It could have been unfair labor practices that resulted in unequal acquisition of wealth. For others, it was outright slavery.” California One of the largest reparations efforts in the nation is taking place in California, where a statewide task force is expected to become “a model for partners across the nation.” In 2020, California became the first state in the country to establish a state reparations task force and nearly two years later, the panel released its first report last month outlining the state’s involvement in slavery and how it continues to harm Black Americans. In the 500-page interim report, the task force detailed how California perpetuated institutional racism in connection to slavery and state-sanctioned discrimination, as well as how the federal government perpetuated these harms. Chairperson Kamilah Moore said the report is the most extensive issued by the government on the African American community in more than 50 years. One of the report’s main goals, Moore said, was educating California residents about the state’s role in maintaining the institution of slavery. The task force’s report outlines how Black Americans have been harmed, including by slavery and political disenfranchisement, and in labor, housing, education, the criminal justice system, and arts and culture. The panel included preliminary recommendations for each category but said a final report will be issued next year. Some of those recommendations include updating language in the state’s Constitution; removing racial bias and discriminatory practices in standardized testing; compensating people deprived of profits for their work; investing in and creating free healthcare programs; and apologizing for acts of political disenfranchisement. Brandon Greene, the director of the racial and economic justice program at the ACLU of Northern California, said the report is extremely comprehensive and hopes officials consider direct cash payments as the center of their reparations efforts. “Reparations to me explicitly is giving money for harm,” Greene said. “If reparations is giving me a million dollars, I can do whatever I want with it. If I want to buy a million dollars’ worth of Jordan’s, I can do that.” With several state and local governments leading the push for reparations, Moore and others said they hope the federal government is empowered to advance H.R. 40, which was first introduced in Congress in 1989 and proposes the creation federal commission to study reparations and recommend remedies for the harm caused by slavery and the discriminatory policies that followed abolition. “The federal government is not off the hook,” Moore said. “I hope that people use this report as leverage to fight for reparations on a federal level.”