Amid Devastating Federal Cuts, States Can Help Struggling Families With Direct Cash

Over a quarter of Americans live paycheck to paycheck and have less than $1,000 in emergency savings. This means there’s no buffer when the car breaks down or an unexpected hospital bill hits.

Congress’s recent cuts to SNAP and Medicaid will worsen this crisis for working families, as millions of people lose money to buy groceries and face higher health premiums and less coverage.

But across the country, some communities are experimenting with a bold solution: just give people cash.

When states and cities invest in direct cash support — whether through tax credits or guaranteed income programs — people get the autonomy to decide how to cover basic needs like utilities, rent, or school supplies.

Our organization was part of a coalition that helped pass Washington State’s Working Families Tax Credit in 2021. This annual cash boost to people with low incomes passed overwhelmingly with bipartisan support during the pandemic because lawmakers on both sides of the aisle knew people needed cash back in their pockets.

In 2025, over $200 million went to around 300,000 low- and moderate-income households, with an average payment of $723. This includes over 400,000 children, or almost one in four Washington kids, whose families are more financially secure because of this tax credit.

Thirty one states plus the District of Columbia and Puerto Rico have enacted a state tax credit or a child tax credit. This investment in people has ripple effects for the economy: for every $1 paid out in tax credits like these, $2 is returned to local economies. Refundable state tax credits can act like guaranteed income, especially if they’re large enough to be distributed monthly and don’t require earned income to be eligible.

Direct cash allows people to solve their own problems and avoid financial crises, which makes all of us safer and helps our communities thrive. And it’s simply good policy.

In fact, hundreds of mayors, legislators, and elected officials have signed on in support of Guaranteed Basic Income (GBI) in recent years. Federally, Rep. Rashida Tlaib (D-MI) recently introduced the “Economic Dignity for All” agenda: a policy platform that includes a universal child benefit, a boost for families who just welcomed a new baby, and a monthly cash payment for adults to tackle the affordability crisis.

Results from over 200 GBI pilots across the U.S. are showing improved health, employment, and education outcomes. These impacts far exceed the cost of investment.

Notable GBI programs include RxKids in Flint, Michigan, which gives a monthly payment to all expecting moms and babies in the city — a program now extended to multiple cities across Michigan.

The Denver Basic Income Project offers unconditional cash payments to people experiencing homelessness, and results after one year show significant improvements in housing stability.

And the Just Income program in Gainesville, Florida is providing cash assistance to people returning home from incarceration. This program removes barriers to reentry and has been shown to reduce recidivism.

In Washington State, several local GBI pilots have had great results, including Growing Resilience In Tacoma (GRIT), run by United Way of Pierce County. GRIT provided $500 a month to 110 single parents in the city’s highest-need zip codes. The pilot showed families became more financially resilient.

The nonprofit Hummingbird Indigenous Family Services runs a program in King and Pierce Counties and the Tulalip Reservation called The Nest, which provides $1,250 a month until a child’s third birthday. These programs address disparities in maternal and birth outcomes for Indigenous communities and are built with a core tenet of respect and support.

Excitingly, Washington’s Department of Social and Health Services recently began a study on the feasibility of a larger statewide direct cash program for pregnant parents and babies.

As we enter the Trump administration’s second year, state and local governments must take the reins to protect people’s well-being. Direct cash is a promising solution to help boost local economies and ensure families can better survive financial crises.