The Growing Discussion About Reparations
Reparations and America
By Annika Pillutla
The Progressive Teen Contributor
What Are Reparations?
Reparations are restitution for slavery and the myriad of racist policies that have restricted socioeconomic advancement of black African-Americans, specifically the direct descendants of slaves. In a policy context, there have been innumerable ideas floated around, from direct cash payments to specifically subsidized housing and higher education.
Below, we examine the policy proposals of Democratic candidates, several stances held by Party leaders, and polling of the general public concerning reparations.
Political History
Reparations are not a new idea, as they have been proposed several times in Congress, specifically with Rep. Conyers and Rep. Sheila but have failed to pass (evidently). There is also a bill in Congress, H.R.40, the Commission to Study and Develop Reparation Proposals for African-Americans Act, which has garnered support from several Democratic candidates.
Slavery reparations have been a sideline political issue for several years, with virtually no support from either party, being seen as too radical. Democratic Party leaders, the ever-influential Obama and Hillary Clinton have declined to support the idea of reparations through the years.
It emerges uncertainly in the 2020 election with varied proposals for reparations, and if those policies could even be considered reparations. Most candidates have declined to explicitly support or endorse reparations themselves, but the largest step forward is the rapidly growing discussion about reparations.
Role in the 2020 Election
Of the current Democratic Party Candidates, only a few have explicitly endorsed reparations: Corey Booker, Kamala Harris, Elizabeth Warren, Marianne Williamson, and Julian Castro. Of these, only Booker, Harris, and Warren have definite policy proposals.
Sen. Booker: American Opportunity Accounts Act
Booker’s proposal ‘American Opportunity Accounts Act’, casually referred to as ‘Baby Bonds’, aims to improve the racial disparities in net wealth- an important injustice, as the median white family holds nearly ten times the wealth of the median black family.
It provides every child born in the United States (regardless of race and ethnicity) with a $1,000 savings bond and depending on household income, the child would receive up to an additional $2,000 annually.
The program does not provide additional deposits for children in households earning over $125,000 annually.
The fund would sit in a low-risk account, managed by Treasury with approximately 3% annual returns. It would only be accessible when the child is 18, and only for pre-approved uses deemed practical, such as education or housing.
The distribution of funds varies significantly by income bracket, resulting in considerable differences in final accounts. A child in the lowest income bracket would accrue $46,215 by the end of the fund, while a child in the highest income bracket would have $1,681.
And because of the racial disparities in income, the benefits of the program would largely go to minority children.
A recent study by Columbia University finds that the policy would “considerably narrow wealth inequalities by race” and “improve the net-asset position of all young adults and alleviate the concentration of wealth at the top”.
The policy would cost approximately $60 billion, and Booker intends to finance it by closing loopholes in capital gains tax and increasing estate taxes back to 2009 levels while adding a surtax for estates worth (at least) $10 million and $50 million.
What sets the proposal apart is it focuses on reducing wealth disparity through children, and subsequent younger generations instead of focusing on repairing current infrastructure. Additionally, limiting the usage of funds ensures that the policy will result in further economic growth and socioeconomic advancement through spending.
Sen. Harris: LIFT the Middle-Class Act
Harris proposes the ‘LIFT the Middle-Class Act’ to combat financial insecurity amid stagnant wages. It provides middle and working-class adults with a refundable tax credit of up to $3,000 annually or $500 monthly (or $6,000 for married couples filing jointly).
The policy is an expansion of EITC, Earned Income Tax Credit, a current welfare policy. Essentially the same policy in terms of benefits, but credit is not determined by the number of children in households or for adults.
In order to qualify, recipients must be employed adults and earning at least $3,000 annually (or $6,000 for married couples) to benefit. Households and individuals earning over $100,000 annually do not qualify, nor do the unemployed/retired. Having over $3,850 in investment income (interest, dividends, net capital gains, and rental income) is also a disqualification.
Credit is determined upon incomes, marital status, and children (if applicable), and phase out based on said criteria.
The LIFT act is estimated to provide $42 billion in benefits and lift 2.7 million people out of deep poverty, and 2.8 million children out of poverty.
However, the plan has two major shortcomings: it is geared towards adults and discludes children and cuts out key welfare programs, which many rely on.
The act is only applicable to legal adults, which proves problematic because poverty disproportionately affects adolescents, the child poverty rate is higher than the overall poverty rate. Additionally, the policy ignores common domestic and familial labor dynamics, many working teenagers are the sources of income for households in which adults are not able to work, or are entirely self-sufficient without familial/guardian support.
Secondly, the plan cuts out key welfare programs which millions are dependent upon, such as Social Security, Supplemental Security Income for disabled individuals, Social Security Disability Insurance, etc.
There is a large overlap between those who qualify for government welfare assistance and those who do not qualify for Harris’s program. Millions are unable to work, either from disabilities or are retired and rely on government programs. In addition, a significant amount of Americans do not meet the income requirement, a rising number of Americans report having virtually no cash earnings from welfare or work.
Although the plan will benefit many and effectively combat everyday financial insecurity, it ignores those who may need the tax credit the most, and by cutting out major social programs, may leave the most economically helpless worse off.
The Tax Foundation analyzed additional economic impacts of the policy and reported that the LIFT credit would reduce economic output by 0.7%, decrease federal revenue by $2.7 trillion over a decade, and would take away almost 830,000 full-time jobs.
The policy would cost $274 billion annually and Harris is still unsure of funding, but currently plans on financing it through repealing Trump tax cuts and through the cut social programs.
The policy is controversial in nature; although the program shows great promise, voters must contemplate whether it is worth trading welfare programs, whether it’s conditions of eligibility are inclusive enough, and the negative tradeoffs involved with it as well.
Sen. Warren: American Housing and Economic Mobility Act
Warren’s proposal ‘American Housing and Economic Mobility Act’ focuses on housing in previously segregated and redlined neighborhoods that remain low-income.
Warren first wants to tackle the often inaccessibly high rent around the US, by investing $500 billion in affordable housing over the upcoming decade. This will bring down rental costs by 10% on average and creates 1.5 million new jobs in the process.
Breaking down the $500 billion investment shows the various areas and types of housing being invested in. $500 million is invested in rural housing, $2.5 billion in Native (mainland) American and Native Hawaiian tribal lands, $4 billion in a new Middle-Class Housing Emergency Fund, and $10 billion into a new competitive grant program for infrastructure.
This is fully financed by raising estate taxes and lowering the threshold for estate taxing from $22 million to $7 million- a change that would only affect 14,000 families annually.
Warren’s plan also adresses the disparity in racial homeownership rates (30% between whites and blacks) by creating a new down payment assistance grant program for first-time homebuyers who live in a formerly segregated/redlined neighborhoods and qualify as low-income.
The grant is applicable to purchasing homes anywhere in the country, and effectively provides people a fair chance to buy a home, a chance that was previously denied by racist housing policies.
The policy also includes a nondiscrimination clause for tenants and landlords on racial/gender/sexual identity
Warren’s policy invests in homeowner wealth disparity and state/local/regional infrastructure to close gaps from previously discriminatory policies which caused the socioeconomic gaps in the first place.
Other Candidate Stances
Bernie Sanders responded to the policy proposal of reparations with “I think there are better ways to do that than just writing out a check,” and questioned the meaning of reparations in policy.
Rep. O’Rourke and Rep. Klobuchar have not endorsed reparations as a policy but do acknowledge the need to combat institutional and socioeconomic racism and racial disparities in wealth.
Mayor Buttigieg stated that “the cleanest way to redress wrongs done to black Americans were to focus on policies which address inequality” when addressed about reparations.
All of the above candidates, however, do support H.R.40.
Are these policies really slavery reparations?
In the most direct sense, no. These proposals are not specifically geared towards descendants of slaves, and are at large, anti-poverty and aim to reduce racial and socioeconomic disparities in wealth.
Although they do reduce wealth disparities between races, none of the policies proposed can be considered reparations definitionally, as they affect multiple racial groups and focus more on socioeconomic status.
This reduces the debate over reparations to one over anti-poverty policies and government redistribution of wealth.
Public Opinion
Polls show that Americans, specifically Democrats, are increasingly unsatisfied with the societal treatment of blacks in society.
A recent Gallup poll revealed that (as of 2018) only 44% of Americans feel that blacks are treated fairly in society, a 7% decrease from 2016 Among blacks, just 18% feel they are treated fairly in society, almost 50% down from 32% in 2016.
Between political parties, there seems to be the greatest divide. As of 2018, only 20% of Democrats feel that blacks are treated fairly in society, versus 74% amongst Republicans, and 45% of Independents.
When asked directly about reparations, a 2016 Marist poll showed that just a quarter (26%) of Americans support reparations, in contrast to the majority (60%) of black Americans.
But the unpopularity may stem from the phrasing of the question: “should or should not the United States pay reparations, that is, should or should not pay money to African-Americans who are descendants of slaves?”.
The question implies a direct monetary payment with no institutional or infrastructure improvements through policy, and as we’ve seen with the aforementioned policy proposals by candidates, this is not nearly the case.
Another factor to consider is that the poll was taken in 2016 when reparations were not a mainstream issue as they are now, so a lack of information on what reparations would look like realistically in 2020 may not be an accurate evaluative tool for Americans stances on reparations.
As the 2020 election progresses, public opinion as a whole will be clearer, as information about specific ‘reparation’ policies will become more mainstream.
