$ 2000 per year until majority: New York mayoral candidate wants to introduce unconditional income for children

Paying cash to the poor has become a hot political idea across the country. And the race for the mayor of New York is no exception. For example, mayor candidate Andrew Young promises to allocate about $ 2 a year to half a million city residents with the lowest income. But Young is not the only candidate for mayor who advocates putting more money directly into the hands of the people. Sean Donovan, the former Obama administration's secretary of housing, is building his campaign for the mayor of New York on an economic plane called Children's Bonds. What is it and how does he plan to carry out his plan, the publication said. Gothamist.

Donovan's Bonds will create savings accounts for all children in New York City. In addition, the program involves annual government contributions to the accounts of children from low-income families. The candidate is betting that such a program can make the city a pioneer in addressing racial income inequality.

What's Donovan's Plan

The Equity Bonds offer aims to open savings accounts for nearly all children in New York. Moreover, each child will receive $ 1 in the form of "seed capital". In the future, the city will contribute up to $ 000 per year to the accounts of children from low-income families.

Donovan estimates that savings accounts that collect annual contributions could accumulate up to $ 50, including interest, by the time the children become adults. It will be possible to get access to the money when the recipients turn 000, but you can not spend money anywhere, but only to pay for studies or start a business.

The idea is not new. Donovan's "bonds" borrows from the concept of children's bonds, which was first introduced by Darrick Hamilton, professor of economics and urban policy. Donovan consulted with Hamilton, and he approved his plan.

Who will be eligible for money from the city

Donovan estimates that about 1,4 million children will join the Equity Bonds program annually, which is the number of those who receive the initial $ 1 amount.

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Only families earning less than $ 150 per year will be eligible for additional annual contributions from the city. According to 000 data, there were over 2017 million households in this income category in New York.

What about illegal families

Donovan said he plans to bring illegal immigrant families into the program, which will potentially set New York City's plan apart from the nationwide one if it ever comes to fruition.

How much is it

Many. Donovan calculated that the first year alone could cost $ 3,2 billion.

How is he going to pay for it?

Donovan said he intends to attract the city's budget, as well as private and charitable foundations. Interestingly, he does not support tax hikes for the rich. He said he would strive to create a 50-50 compliance program in which every dollar in the budget would correspond to at least one private dollar.

But most of his calculations are based on his belief that the version of the program will eventually be adopted in Congress. The most famous version of the children's pay plan was introduced in 2018 by US Senator Corey Booker. The New Jersey Democrat later made "bonds for children" a centerpiece of his economic platform when he ran for president. Since then, similar pieces of legislation have been in the works, including the law of Republican Senator Mitt Romney.

If one of these proposals is legislated, the federal government will provide a significant portion of the funding for Donovan's plan.

But Donovan said he will push for his program "no matter what happens at the federal or state level." At this point, he added, "racial inequality is the most important thing we need to overcome."

Have you tried anything like this elsewhere

In the United States, New Jersey came closest to such a plan. New Jersey Gov. Phil Murphy proposed $ 1 savings accounts for underprivileged children. The plan, which did not include annual contributions, was estimated at $ 000 million a year. The proposal was rejected during the state budget negotiation.

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In 2005, the United Kingdom launched the Children's Trust Fund program in which the government made initial contributions and encouraged future contributions from family members. Participants were also allowed to invest in the stock market. But Conservatives canceled the program in 2010. Last year, British teens who were enrolled in the plan and turned 18 were finally able to access the money. Depending on how the funds were managed, the amounts on the accounts ranged from £ 1000 to £ 70, or from $ 000 to $ 1.