As Americans are crushed by affordability, mayors push cash handouts as the answer in growing trend
A spokesperson for the Economic Securities Project (ESP), an organization that led the creation of more than 100 guaranteed income programs, told Fox News Digital that affordability is creating the "need to bring cash to communities even more urgent."
"Further, the destruction of the social safety net paired with skyrocketing costs of healthcare and food have made the need to bring cash to communities even more urgent," ESP's director of cash initiatives, Shafeka Hashash, told Fox News Digital.
"Amid the affordability crisis, we have a responsibility to share what we know about cash: that it provides stability, supports economic mobility and helps families move toward a more economically secure future," she added.
As Americans are struggling with rising housing, food and energy costs, both parties are trying to convince voters they have the answer to the affordability crisis ahead of the high-stakes midterm elections. The past holiday weekend was emblematic of ongoing concern over affordability. The AAA estimated that nearly 40 million Americans would pay unprecedented prices for gasoline, making it the most expensive Labor Day holiday at the pump on record.
Meanwhile, the ESP has been pushing for guaranteed income long before affordability became a salient issue. Founded in 2016, ESP launched with more than "100 entrepreneurs, activists, researchers, and philanthropists" advocating for direct cash payments.
Hashash’s comments came after ESP released a report published Aug. 12 and titled "Right on Time: How Cash Helps Families Move Through Life’s Transitions," making the case for institutionalizing "no-strings-attached" cash assistance.
The push comes as city leaders across the nation face a financial cliff. Dozens of municipal mayors are scrambling to maintain local cash-handout experiments as the federal pandemic aid that funded them nears its final spending deadline.
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The report's authors build their case by citing "a wealth of data collected from over 250 cash and guaranteed-income pilots across 40 states and the District of Columbia," claiming the findings prove that direct cash transfers are a "legitimate policy tool."
However, rather than pushing immediate, universal cash handouts nationwide, the authors suggest a tactical shift of tying direct payments to specific life events. Cash assistance works best during periods of personal or financial hardship, they argued, writing that "cash does its strongest work in moments of transition."
The report highlights life events such as having a child, housing relocation or post-incarceration reentry.
Hashash told Fox News Digital that the "‘cash for transitions’ memo was not inspired by the lack of federal funding."
"It is a reflection of our learnings and observations from more than 250 pilots across 40 states over the past decade. We examined the data and found cash has its greatest impact in moments of transition. These findings are increasingly urgent and resonant across the field as our society collectively grapples with how to approach mass transitions in the face of an increasingly AI-powered economy," she explained.
The report pointed to the COVID-19 pandemic as a prime model, calling direct government checks an example of "large-scale transfers" that reached "households at speed and scale."
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Advocates and mayors are hoping to transform pandemic-era cash assistance programs into permanent government policy now that federal COVID-19 relief funds are expiring.
Under federal law, local governments had until Dec. 31, 2024, to legally obligate their American Rescue Plan Act (ARPA) funds, and most obligated funds must be fully spent by Dec. 31, 2026.
The broader campaign for direct payments includes Mayors for a Guaranteed Income, led by former Stockton, California, Mayor Michael Tubbs. Tubbs, who launched one of the nation's early municipal cash experiments, has long argued that federal tax dollars should fund income supplements to help lower-income Americans keep up with rising inflation, rent and groceries, claiming it's a viable policy to tackle affordability.
In the Chicago suburb of Evanston, Illinois, municipal officials recently announced an expansion of the city's guaranteed income program using the remainder of previously allocated ARPA funds before the spending clock runs out.
Evanston is one of more than 100 U.S. municipalities that have launched universal basic income-style pilots since 2018. While many early experiments relied on a blend of private philanthropic dollars and emergency federal stimulus, those coffers are rapidly hitting zero. The looming shortfalls are driving local officials to find alternative avenues to make cash handouts permanent, mirroring recent tax-funded budget maneuvers in neighboring Cook County, Illinois.
State affiliates are already moving forward. Economic Security California, an ESP arm, is laying groundwork for state-funded guaranteed income programs. California leads the country in pilot programs, hosting more than 60 cash initiatives to date. To sustain these efforts, ESP recommends that local and state governments look beyond donor funding and establish dedicated revenue streams from local taxes.
"We can say, however, that there’s an active and growing movement for cash in hundreds of communities across the country," Hashash said.
She added: "We regularly take calls from some of the 1,500 members of the Guaranteed Income Community of Practice – researchers, nonprofits, local government officials, and community leaders all interested in bringing cash to their neighborhoods. We just can’t announce any pilots or policies before the localities do."