Several major cities across the United States have been abusing federal COVID-19 relief funds by instead using them for “guaranteed income” projects, to the tune of millions of dollars.
As reported by Just The News, some of the cities participating in such programs include Los Angeles, California; St. Louis, Missouri; San Francisco, California; and Providence, Rhode Island. The cities are part of a coalition called “Mayors for a Guaranteed Income.”
Los Angeles’ program guarantees $1,000 per month to 1,000 residents, with absolutely no strings attached for the recipients. The program saw over 180,000 applicants. On December 13th, St. Louis formally approved a measure to spend up to $5 million providing checks for $500 a month to 440 households across the city, over a period of 18 months.
On December 6th, the city of San Francisco announced that it would also be spending $5 million on a guaranteed income program that exclusively targets pregnant black women, giving $1,000 to 425 women once a month for the next year. And in Providence, 110 low-income households will receive checks for $500 each month for 18 months, at a total cost of $990,000 for the city.
However, the use of temporary federal funding such as the COVID-19 relief funds has raised concerns that such programs ultimately cannot last.
“It seems highly unlikely that these programs could be funded absent either a dramatic shift in funding from existing anti-poverty programs or a huge, permanent increase in federal spending,” said Kyle Wingfield, CEO of the Georgia Public Policy Foundation. “A shift is pretty improbable in the current political climate. Given that Congress is already borrowing at a large scale to pay for other programs, this increase would lead to more federal taxpayer debt.”
“When the money is gone, state budgets will have to pick up the tab,” said Veronique de Rugy, the George Gibbs Chair in Political Economy at the Mercatus Center. “I assume that when COVID money is gone, some states will give up the programs while others will keep them going.”
The misdirection of funds meant to ease the economic pain of the COVID lockdowns represents yet another example of how attempts by the federal government to provide financial relief during the pandemic have only resulted in corruption and abuse of the system, such as Payment Protection Program (PPP) loans meant for small businesses instead being taken by wealthy individuals and large corporations.