This one from President Donald Trump (R), who has one on occasion.
I am recommending to Senate Republicans that the Hundreds of Billions of Dollars currently being sent to money sucking Insurance Companies in order to save the bad Healthcare provided by ObamaCare, BE SENT DIRECTLY TO THE PEOPLE SO THAT THEY CAN PURCHASE THEIR OWN, MUCH BETTER, HEALTHCARE, and have money left over[.]
The idea wants study to identify any hidden implications, good or bad. It also wants a couple of criteria attached. One is a means test for eligibility for the payments. The Federal Poverty Guidelines do a good job of locating the threshold for poverty. Anyone or any family with income above the poverty guideline is, by definition, not living in poverty, and so should be ineligible.
The other criterion is a sunset clause. The subsidies, even as direct payments to the individuals, should have a hard expiration date beyond which they end, irrevocably (or as nearly so as a Congress can make a statute, which frankly isn’t much). The duration of the payments should be only long enough to allow the individual and family make their own budgetary adjustments, plus what might be called an engineering slop cushion—perhaps six months.
All in all, though, this is a good initial consideration.
Rather than a cliff at the federal poverty level point, I’d recommend a phase out schedule – at less than 25% below the poverty line, 100% subsidy; at between that point and the poverty line, 75% subsidy; from the poverty line to +25%, a 50% subsidy. I’m not sure I’d go higher that that; I’d like to see some demographics on that population.
I’d also include a work requirement. Captain John Smith wasn’t far wrong.
Work requirement, certainly.
A better way to eliminate the cliff, I think, would be a dollar-for-dollar reduction in the subsidy for every dollar of income–from any source–above the poverty level. Or maybe a 90 cent reduction for every dollar of income increase.
Too much of the cliff–of any welfare cliff–is from the loss of the entire welfare program payment from a single dollar of income above the program’s threshold. The three cutoff levels in your proposal still leave the recipient losing far more subsidy than he gains in [earned] income until a lot of income increment occurs.
To truly incentivize someone, beyond the self-respect aspect (which too many welfare recipients have had beaten out of them), it’s necessary that he at least break even or make a profit on the deal.
Eric Hines