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McDuffie Wants to See Fiscal Incentives in D.C.

Calls for a Baby Bond for Newborns

In his push for racial equity in the District, D.C. Council member Kenyan McDuffie recently proposed to Mayor Muriel Bowser — as she makes up the fiscal year 2021-2022 budget — a $120 million pilot program which consists of a $100 million guaranteed minimum income for extremely poor residents and a proposal for up to $2,000 for each baby born in the city to a low-income family.

“Centuries of slavery, segregation and government-sanctioned discrimination have prevented Black Washingtonians from building wealth and becoming financially secure,” McDuffie said in a March 1 letter to the mayor. “We must be bold and intentional about closing the racial wealth gap and investing in historically underserved communities.”

Studies by such think-tanks as the D.C. Fiscal Policy Institute (DCFPI) have consistently shown whites in the District having substantial wealth advantages over Black residents due to systemic racial practices and McDuffie would like to start the process of closing that gap by extending financial incentives to impoverished residents with the help of the city government.

A Baby Bond?

The council member wants $100 million for the District government to study and craft a guaranteed minimum income program for city households whose incomes fall below 100 percent of the federal poverty level.

McDuffie also wants Bowser to create and fund a Baby Bond initiative. This program will give families who earn below 500% of the federal poverty line would receive at least $1,000 at birth and up to $2,000 annually based on family income, according to the council member.
Lower-income families will get larger endowments, he said.

Funds would become available once the child turns 18 and may be used for education, business ownership, homeownership and retirement. He said prospects are good that a child may have $50,000 with a Baby Bond when they turn 18, depending on the economy and the stock market.

When the leaders of the Fair Budget Coalition, an organization seeking to ensure the District’s budget prioritizes the needs of economically-challenged residents, heard about McDuffie’s proposals, they responded with glee.

“At the FBC, we are a part of the Universal Basic Income coalition and we support economic stipends, guaranteed income and reparations for Black individuals,” the statement said.

“Combating poverty is one of the most impactful ways to combat violence, health concerns and other issues low-income individuals face. This is an unexpected proposal for McDuffie since he has opposed legislation that will likely result in a tax increase on the rich, but he has been looking to directly impact Black D.C. residents progressively lately and the change of heart is encouraged,” the FBC said.

GOP Slams Idea as ‘Bad Social Engineering’

McDuffie’s proposals have drawn the ire of some D.C. residents who see it as a handout for people who don’t want to work.

“This is really bad social engineering,” Ralph J. Chittams Sr., a former vice chairman of the D.C. Republican Party, said. “McDuffie’s proposals don’t give people any incentive to get off welfare. I think it is a slap in the face to people who get out of bed every day to go earn a living.”

Chittams said the proposals could have the affect of some residents opting out of the workforce to participate in the programs.

“I can see a struggling Washingtonian looking around and seeing a non-working resident getting a check for not having a job and they are thinking, ‘Why can’t I do that, too?’” he said.

“As far as the Baby Bond is concerned, people’s behavior doesn’t change easily. If people don’t save and invest at an early age, I doubt they will do so when they reach 18. Basically, they will spend the money any way they see fit and I doubt some will use it for something useful like a college education.”

Closing the Income Gap Appeals to Policy Analysts

While residents like Chittams have their doubts, some policy analysts believe McDuffie’s proposals have promise and don’t share the view that they disincentivize work.

“I was excited to see McDuffie request substantial investments in two initiatives that could help close the racial wealth gap here in D.C.,” Doni Crawford, policy analyst at DCFPI.

“Early research and pilots show that guaranteed income programs immediately help families pay for basic needs and achieve economic stability. Baby Bonds are a longer-term solution to closing the racial wealth gap and would be the most effective at doing so when program is designed — as proposed in this request.”

Tarza Mitchell, the policy director at DCFPI, said the District “has one of the largest Black-to-white wealth and income gaps in the nation and the median racial wealth gap actually grows with higher education levels.”

“This shows that Black people cannot work harder to close the wealth gap — that’s a lie Americans have been sold by capitalism and dog whistle politics,” Mitchell said. “We need to fix our broken economic model that stacks the deck against Black and low-income residents, and the anti-poverty initiatives that McDuffie is calling for would be a step in that direction.”

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