Universal Basic Income Proposals for the United States
link to page 2 
April 3, 2018
Universal Basic Income Proposals for the United States
Overview
all existing social transfers, such as the Supplemental
Conceptually, a universal basic income (UBI) program
Nutrition Assistance Program (SNAP) and housing
provides a modest cash income at regular intervals (e.g.,
assistance, other targeted federal spending (e.g., agricultural
each month or year) to all individuals meeting minimal
subsidies), and the tax expenditures such as the Earned
eligibility criteria. A UBI can serve as a social insurance
Income Tax Credit (EITC). These proposals suggest that a
program, a method for distributing income generated by a
UBI could be financed in large part by forgone costs of
government-owned asset (e.g., the Alaska Permanent Fund
such programs. Some have suggested, however, that new
Dividend), or both. Other terms for a UBI are a “basic
taxes may be needed to cover full UBI program costs.
income guarantee” or “unconditional basic income.”
Others view a UBI as a mechanism for distributing income
Whereas some countries—like Finland and Canada—have
generated from a state-owned resource. For example, the
experimented with UBIs, for the United States, UBI
Alaska Permanent Fund Dividend provides an annual
discussions are largely notional: the United States does not
payment to eligible Alaskan residents generated from an
have a country-wide UBI, and UBI proposals have not been
investment fund seeded by Alaskan oil sales; the annual
introduced in the 115th Congress. Specific UBI policy
dividend was $1,100 in 2017. Some Native American tribes
proposals for the United States, however, have been offered
similarly distribute a share of profits generated from tribe-
by members of the social policy community, business
owned casinos to tribe members.
world, and the technology industry (e.g., the company Y
Combinator has announced plans to conduct a basic income
Potential Benefits
experiment in California).
UBI programs have been proposed to address a wide range
of social issues. Some frame a UBI as an efficiency-
Defining Features
improving replacement for the current body of social
Key defining characteristics of UBI proposals are the
insurance and welfare programs in the United States. Such a
following:
UBI, it is argued, could potentially reduce administrative
costs and application burden for recipients, give more
Universality of Benefit. The UBI benefit is provided to
freedom to households over how they allocate funds, and
all persons subject to minimal criteria such as
encourage households to establish stronger community ties
citizenship, adulthood, and non-incarceration.
or otherwise establish nongovernmental support systems.
Unconditional Benefit Receipt and Usage. Beyond
Some UBI proposals respond to growing unease about labor
meeting minimal eligibility criteria, UBI proposals do
market conditions, particularly the availability of jobs that
not generally condition benefit receipt on particular
are sufficiently rewarding in terms of wages and quality. In
attributes, behaviors, or outcomes; means-tests and work
this context, a UBI is viewed as one lever to raise living
requirements are not common features of UBI
standards among workers in low-wage jobs or jobs with
proposals. Likewise, few proposals place restrictions on
low wage growth, and to provide security for workers
UBI recipients’ use of the cash benefit.
whose jobs are susceptible to automation. According to
these proponents, the UBI benefit may also serve to
“Basic” Benefit or Profit-Sharing Dividend. Where a
improve job prospects by offering the financial cushion
UBI is proposed as a social insurance program, the
needed to seek out work in new labor markets (e.g., by
proposed benefit amount is generally selected to be
financing a move across county or state lines, or to take a
large enough to cover basic living expenses. Two recent
career break to invest in new skills training). In addition to
proposals, for example, place the disposable UBI benefit
facilitating better quality job matches, increased labor
between $10,000 and $12,000 per year (Table 1), which
mobility may further improve labor market conditions by
is near the official poverty threshold for a single person
encouraging employers to improve wages and working
under age 65 years with no children ($12,752 in 2017).
conditions to attract and retain workers.
Where a UBI is used to distribute income generated by a
government-owned asset, the dividend amount varies
The benefit could also provide a steady income to those
from year-to-year based on the performance of the
engaged in productive nonmarket activities such as
financing instrument (e.g., the Alaska Permanent Fund
caregiving, education, and training. They posit that it may
Dividend).
also promote greater savings, allowing individuals to invest
or take constructive risks (e.g., starting a new business,
Financing
testing an idea) or engage in more leisure activities (e.g.,
Proposed UBI financial mechanisms depend on the
vacation).
underlying objectives for the program. Some UBI
proponents view the benefit as a replacement for some or
https://crsreports.congress.gov
link to page 2 link to page 2
Universal Basic Income Proposals for the United States
Table 1. Two UBI Proposals Published in 2016
Charles Murray
Andy Stern
In Our Hands: A Plan to Replace the
Raising the Floor: How a Universal Basic Income Can
Welfare State
Renew our Economy and Rebuild the American Dream
Proposal
Benefit
$13,000 per year, of which $3,000 must be used
$12,000 per year ($1,000 received monthly).
Amount
to purchase catastrophic health insurance. The
benefit is reduced as personal income increases
beyond $30,000 per year. The minimum benefit
is $6,500 per year for individuals with annual
personal income of $60,000 or more.
Recipients
All non-incarcerated U.S. citizens who are 21
Persons aged 18 to 64 years, and those 65 and older receiving
years or older with a U.S. bank account.
less than $1,000 in monthly Social Security payments.
Estimated
$2.8 tril ion in 2020 (in 2017 dol ars).
$1.8-$2.8 tril ion per year (in 2017 dol ars).
Cost and
Financed largely by forgone costs of all existing
Financed largely by forgone costs of certain transfer programs
Financing
federal transfer payments, including Medicare,
and tax expenditures, reforms to Social Security and health
Medicaid, Social Security, certain tax
care financing, and fiscal policy changes.
expenditures, federal transfers to select groups
(e.g., grants, subsidies, or services), and health
care reform.
Source: Charles Murray, In Our Hands: A Plan to Replace the Welfare State (Washington, DC: American Enterprise Institute, 2016); and Andy
Stern, Raising the Floor: How a Universal Basic Income Can Renew our Economy and Rebuild the American Dream (New York: Public Affairs, 2016).
Potential Concerns
pressure on wages), and potential future political pressures
Program costs and the related potential for new taxes are
to increase the benefit amount (beyond inflation), raise
among the central concerns expressed about proposed UBI
taxes, or reinstate discontinued transfer programs.
schemes. Two proposals published in 2016 (see Table 1)
estimate program costs in the range of $1.8 to $2.8 trillion
Recent Discussions
per year, depending on the benefit amount and other
Table 1 summarizes two UBI proposals published in 2016
program details. Proponents, however, point out that at least
by Charles Murray, an American Enterprise Institute
some of those costs could be recouped by the
Emeritus Scholar, and by Andy Stern, former president of
discontinuation of existing federal transfer programs.
the Service Employees International Union. Similarities
exist in the spirit and details of their proposals. For
Other critiques focus on the potential for a UBI to create
example, both see a UBI as a means to help people live
work disincentives. The labor supply effects of a proposed
fulfilling lives, propose similar benefit amounts, and cover
UBI generally would depend on the benefit amount and
UBI program costs largely by eliminating some (Stern) or
other program factors, and its overarching effects on the
all (Murray) existing transfers. But there are important
labor market (e.g., how it affects labor dynamism, private
differences as well. Murray’s proposal appears to be driven
investment in training and education). However, the limited
by his concerns that public assistance has eroded U.S.
body of related research on universal dividends (e.g.,
values around family, work, and community; Stern’s focus
Alaska) and the negative income tax experiments conducted
is on mounting labor market challenges, particularly for
in the 1960s and 1970s do not find large declines in labor
low- and middle-wage workers. Whereas both see a need
force participation.
for changes to health care policies, Murray’s plan would
UBI critics also raise questions about the replacement of
eliminate federal support for health care financing, require
targeted government support with the UBI benefit. They
UBI recipients to purchase catastrophic health insurance,
express concern about the fate of households that suffer
and rely on market forces to change cost and availability of
large financial losses, for example, due to serious illness or
medical services. Stern is less specific about health care
catastrophic weather events, and whether the general public
policy changes, but states that he would retain Medicare.
has sufficient financial skills to protect against job loss,
Stern is open to creating new taxes to support a UBI
poor investment outcomes, and other risks. Some
program, such as a value added tax and a financial
proponents acknowledge the need for complementary
transaction tax; Murray does not include new tax revenue in
policies—for example, to improve financial skills and to
his financing plan.
deter those who would scheme to separate vulnerable
Emma Sifre provided research support for this In Focus.
recipients from their payments.
Others have raised concerns about the possibility of rising
Sarah A. Donovan, Analyst in Labor Policy
prices (i.e., due to increased consumption and upward
IF10865
https://crsreports.congress.gov
Universal Basic Income Proposals for the United States
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10865 · VERSION 3 · NEW
April 3, 2018
Universal Basic Income Proposals for the United States
Overview
all existing social transfers, such as the Supplemental
Conceptually, a universal basic income (UBI) program
Nutrition Assistance Program (SNAP) and housing
provides a modest cash income at regular intervals (e.g.,
assistance, other targeted federal spending (e.g., agricultural
each month or year) to all individuals meeting minimal
subsidies), and the tax expenditures such as the Earned
eligibility criteria. A UBI can serve as a social insurance
Income Tax Credit (EITC). These proposals suggest that a
program, a method for distributing income generated by a
UBI could be financed in large part by forgone costs of
government-owned asset (e.g., the Alaska Permanent Fund
such programs. Some have suggested, however, that new
Dividend), or both. Other terms for a UBI are a “basic
taxes may be needed to cover full UBI program costs.
income guarantee” or “unconditional basic income.”
Others view a UBI as a mechanism for distributing income
Whereas some countries—like Finland and Canada—have
generated from a state-owned resource. For example, the
experimented with UBIs, for the United States, UBI
Alaska Permanent Fund Dividend provides an annual
discussions are largely notional: the United States does not
payment to eligible Alaskan residents generated from an
have a country-wide UBI, and UBI proposals have not been
investment fund seeded by Alaskan oil sales; the annual
introduced in the 115th Congress. Specific UBI policy
dividend was $1,100 in 2017. Some Native American tribes
proposals for the United States, however, have been offered
similarly distribute a share of profits generated from tribe-
by members of the social policy community, business
owned casinos to tribe members.
world, and the technology industry (e.g., the company Y
Combinator has announced plans to conduct a basic income
Potential Benefits
experiment in California).
UBI programs have been proposed to address a wide range
of social issues. Some frame a UBI as an efficiency-
Defining Features
improving replacement for the current body of social
Key defining characteristics of UBI proposals are the
insurance and welfare programs in the United States. Such a
following:
UBI, it is argued, could potentially reduce administrative
costs and application burden for recipients, give more
Universality of Benefit. The UBI benefit is provided to
freedom to households over how they allocate funds, and
all persons subject to minimal criteria such as
encourage households to establish stronger community ties
citizenship, adulthood, and non-incarceration.
or otherwise establish nongovernmental support systems.
Unconditional Benefit Receipt and Usage. Beyond
Some UBI proposals respond to growing unease about labor
meeting minimal eligibility criteria, UBI proposals do
market conditions, particularly the availability of jobs that
not generally condition benefit receipt on particular
are sufficiently rewarding in terms of wages and quality. In
attributes, behaviors, or outcomes; means-tests and work
this context, a UBI is viewed as one lever to raise living
requirements are not common features of UBI
standards among workers in low-wage jobs or jobs with
proposals. Likewise, few proposals place restrictions on
low wage growth, and to provide security for workers
UBI recipients’ use of the cash benefit.
whose jobs are susceptible to automation. According to
these proponents, the UBI benefit may also serve to
“Basic” Benefit or Profit-Sharing Dividend. Where a
improve job prospects by offering the financial cushion
UBI is proposed as a social insurance program, the
needed to seek out work in new labor markets (e.g., by
proposed benefit amount is generally selected to be
financing a move across county or state lines, or to take a
large enough to cover basic living expenses. Two recent
career break to invest in new skills training). In addition to
proposals, for example, place the disposable UBI benefit
facilitating better quality job matches, increased labor
between $10,000 and $12,000 per year (Table 1), which
mobility may further improve labor market conditions by
is near the official poverty threshold for a single person
encouraging employers to improve wages and working
under age 65 years with no children ($12,752 in 2017).
conditions to attract and retain workers.
Where a UBI is used to distribute income generated by a
government-owned asset, the dividend amount varies
The benefit could also provide a steady income to those
from year-to-year based on the performance of the
engaged in productive nonmarket activities such as
financing instrument (e.g., the Alaska Permanent Fund
caregiving, education, and training. They posit that it may
Dividend).
also promote greater savings, allowing individuals to invest
or take constructive risks (e.g., starting a new business,
Financing
testing an idea) or engage in more leisure activities (e.g.,
Proposed UBI financial mechanisms depend on the
vacation).
underlying objectives for the program. Some UBI
proponents view the benefit as a replacement for some or
https://crsreports.congress.gov
link to page 2 link to page 2
Universal Basic Income Proposals for the United States
Table 1. Two UBI Proposals Published in 2016
Charles Murray
Andy Stern
In Our Hands: A Plan to Replace the
Raising the Floor: How a Universal Basic Income Can
Welfare State
Renew our Economy and Rebuild the American Dream
Proposal
Benefit
$13,000 per year, of which $3,000 must be used
$12,000 per year ($1,000 received monthly).
Amount
to purchase catastrophic health insurance. The
benefit is reduced as personal income increases
beyond $30,000 per year. The minimum benefit
is $6,500 per year for individuals with annual
personal income of $60,000 or more.
Recipients
All non-incarcerated U.S. citizens who are 21
Persons aged 18 to 64 years, and those 65 and older receiving
years or older with a U.S. bank account.
less than $1,000 in monthly Social Security payments.
Estimated
$2.8 tril ion in 2020 (in 2017 dol ars).
$1.8-$2.8 tril ion per year (in 2017 dol ars).
Cost and
Financed largely by forgone costs of all existing
Financed largely by forgone costs of certain transfer programs
Financing
federal transfer payments, including Medicare,
and tax expenditures, reforms to Social Security and health
Medicaid, Social Security, certain tax
care financing, and fiscal policy changes.
expenditures, federal transfers to select groups
(e.g., grants, subsidies, or services), and health
care reform.
Source: Charles Murray, In Our Hands: A Plan to Replace the Welfare State (Washington, DC: American Enterprise Institute, 2016); and Andy
Stern, Raising the Floor: How a Universal Basic Income Can Renew our Economy and Rebuild the American Dream (New York: Public Affairs, 2016).
Potential Concerns
pressure on wages), and potential future political pressures
Program costs and the related potential for new taxes are
to increase the benefit amount (beyond inflation), raise
among the central concerns expressed about proposed UBI
taxes, or reinstate discontinued transfer programs.
schemes. Two proposals published in 2016 (see Table 1)
estimate program costs in the range of $1.8 to $2.8 trillion
Recent Discussions
per year, depending on the benefit amount and other
Table 1 summarizes two UBI proposals published in 2016
program details. Proponents, however, point out that at least
by Charles Murray, an American Enterprise Institute
some of those costs could be recouped by the
Emeritus Scholar, and by Andy Stern, former president of
discontinuation of existing federal transfer programs.
the Service Employees International Union. Similarities
exist in the spirit and details of their proposals. For
Other critiques focus on the potential for a UBI to create
example, both see a UBI as a means to help people live
work disincentives. The labor supply effects of a proposed
fulfilling lives, propose similar benefit amounts, and cover
UBI generally would depend on the benefit amount and
UBI program costs largely by eliminating some (Stern) or
other program factors, and its overarching effects on the
all (Murray) existing transfers. But there are important
labor market (e.g., how it affects labor dynamism, private
differences as well. Murray’s proposal appears to be driven
investment in training and education). However, the limited
by his concerns that public assistance has eroded U.S.
body of related research on universal dividends (e.g.,
values around family, work, and community; Stern’s focus
Alaska) and the negative income tax experiments conducted
is on mounting labor market challenges, particularly for
in the 1960s and 1970s do not find large declines in labor
low- and middle-wage workers. Whereas both see a need
force participation.
for changes to health care policies, Murray’s plan would
UBI critics also raise questions about the replacement of
eliminate federal support for health care financing, require
targeted government support with the UBI benefit. They
UBI recipients to purchase catastrophic health insurance,
express concern about the fate of households that suffer
and rely on market forces to change cost and availability of
large financial losses, for example, due to serious illness or
medical services. Stern is less specific about health care
catastrophic weather events, and whether the general public
policy changes, but states that he would retain Medicare.
has sufficient financial skills to protect against job loss,
Stern is open to creating new taxes to support a UBI
poor investment outcomes, and other risks. Some
program, such as a value added tax and a financial
proponents acknowledge the need for complementary
transaction tax; Murray does not include new tax revenue in
policies—for example, to improve financial skills and to
his financing plan.
deter those who would scheme to separate vulnerable
Emma Sifre provided research support for this In Focus.
recipients from their payments.
Others have raised concerns about the possibility of rising
Sarah A. Donovan, Analyst in Labor Policy
prices (i.e., due to increased consumption and upward
IF10865
https://crsreports.congress.gov
Universal Basic Income Proposals for the United States
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10865 · VERSION 3 · NEW