As federal direct payments to households expire, cities move forward

The covid-19 pandemic brought back a concept that was rejected in the 1990s, give money to those who need it, without any strings attached. The United States sent out three rounds of stimulus checks and set up a monthly basic income scheme through child tax credit advance payments.

Both programs have helped alleviate the difficulties imposed by the fallout from the economic crisis induced by covid-19. The latter is credited with having reduced child poverty by more than 40 percent this year, but it will now expire at the end of the month. The Senate remained on vacation without passing the Build Back Better Act, which would have extended the measure by one year.

Although federal aid is drying up, US cities are scaling up and implementing their own direct payment programs to help households in need. They hope their experience will convince lawmakers in Washington to do so on an ongoing basis at the national level.

Studies on programs, that allow people to spend the money they receive where they need it, show that beneficiaries were more likely to work full time, pay bills on time and spend less on alcohol and drugs than before payments.