Texas May Reverse Plan to Give People $9,000

Texas may reverse its plan to give $500 monthly checks through a guaranteed-income program for Harris County.

Texas Attorney General Ken Paxton sued Harris County on April 9 in an effort to prevent Uplift Harris—a pilot program that would pay families $500 for 18 months, amounting to $9,000 over the program's duration—from moving forward.

A post-pandemic spike in the national poverty rate has sparked calls for expanded stimulus programs. Harris County originally allocated $20.5 million from its federal coronavirus relief funds to supply the payments to families living 200 percent below the federal poverty line.

Conservative lawmakers have pushed back against the program—introduced by Democrats Harris County Judge Lina Hidalgo and Commissioner Rodney Ellis—since it was first approved in June. In the lawsuit, Paxton called the program an "illegal and illegitimate government overreach." He also referred to the guaranteed income as the "Harris Handout." The Republican attorney general said the program would violate the Texas Constitution, which "expressly prohibits giving away public funds to benefit individuals."

"This scheme is plainly unconstitutional," Paxton said, according to a press release announcing the suit. "Taxpayer money must be spent lawfully and used to advance the public interest, not merely redistributed with no accountability or reasonable expectation of a general benefit. I am suing to stop officials in Harris County from abusing public funds for political gain."

The program's first set of payments is scheduled to go out this month, and Harris County has not announced a delay.

"This lawsuit is nothing more than another attack on Harris County government by Republican state leaders looking to make headlines," Harris County Attorney Christian Menefee said in a statement. "This program is about helping people in a real way by giving them direct cash assistance—something governments have always done. I cannot for the life of me understand why any public servant would be opposed to that."

Other cities, including Austin, San Antonio and El Paso County, have also attempted guaranteed-income programs after federal stimulus payments ended a few years ago. Austin, for example, gave select residents $1,000 monthly as a way to keep poor residents financially afloat and in housing.

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Meanwhile, in Houston, more than 75 percent of residents said they supported a universal basic income for low-income working residents, a 2023 Kinder poll found.

"Harris County was approaching their guaranteed-income plan with the same perspective as many state and local governments currently, which is to target specific groups that are most in need of financial aid," Alex Beene, a financial-literacy instructor at the University of Tennessee at Martin, told Newsweek.

"This particular plan wasn't aimed at giving everyone a $500 check, but rather providing one to residents who were living 200 percent below the poverty line. $500 to this group could be the difference between being able to eat one day or having some type of shelter over their head," Beene added.

Inflation across the United States stands at 3.2 percent, and many Americans are still struggling to afford everyday necessities, including food and shelter.

Beene said Americans' past reliance on stimulus payments has also made the general public more encouraging of direct payments due to financial need.

"Stimulus payments have gained wide popularity since the pandemic, but there are still many Americans who fall in line with legislators calling these unconstitutional handouts that can be spent on anything and not just the essentials of life," Beene said.

"Still, plans like the one in Harris County are at least attempting to use guaranteed income to help boost those living in extreme poverty out of their situation. If they succeed, it could set a new standard by which other counties are judged in assisting their most economically at-risk population," the instructor continued.

Michael Ryan, a finance expert who runs michaelryanmoney.com, said guaranteed-income programs often served to help with economic disparities between Black, Hispanic and white households across the country.

"Research has also shown that similar guaranteed-income programs can have lasting positive impacts on health, employment and child development," Ryan told Newsweek. "So Harris County viewed this as a potential model for sustainable, equitable anti-poverty efforts."

Still, Paxton's lawsuit reflects a continuing philosophical debate on the role of the government in providing direct cash assistance, Ryan said.

"Some view it as overreach or socialism, arguing it exceeds the county's authority," he continued. "If the AG prevails, it could set a precedent limiting the ability of local governments in Texas to implement similar guaranteed-income programs even when funded by federal dollars."

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As political debate heats up amid the upcoming 2024 election, Kevin Thompson, the CEO and founder of 9i Capital Group and a Texas resident, said Republicans and Democrats are fighting to keep power and dismantle each other's plans.

"The backlash comes from the politics," Thompson told Newsweek. "The far-right feels as if liberals are basically buying votes. By providing free money without restrictions, the conservatives feel as if this is a hard-and-fast way to purchase the voting public."

Thompson expected the new lawsuit to delay the payments and take the program in front of a new legislative body, which could end it.

He said, "The question we need to ask ourselves, if the conservatives feel as if liberals are buying votes, are you not just selling those voters to Democrats if you forgo this plan?"