Anthony Behar/Sipa USA via AP Images
Yang speaking to members of the press outside the Fort Washington Armory vaccination site in New York earlier this month
Sludge produces investigative journalism on lobbying and money in politics. The American Prospect is re-publishing this article.
During his presidential run, Andrew Yang’s signature policy of sending $1,000 a month to every adult posed a trade-off. For millions of lower-income Americans, choosing the cash “Freedom Dividend” would replace other government assistance, like food stamps and housing vouchers, and not be in addition to existing programs.
Many advocates for a universal basic income (U.B.I.) criticized the design of the Yang policy, which they said would force lower-income people to choose between current social programs and the cash transfer. Yang’s $3 trillion national plan would have been funded in large part through a 10% value-added tax on consumer purchases, which progressive economists argued would hurt the economic standing of struggling people.
Yang, who is now running for New York City mayor, has downsized his guaranteed income proposal for his current campaign: an average of $2,000 a year would be given to 500,000 low-income recipients. The price tag for Yang’s proposal would be $1 billion per year, which the candidate said he would produce through resolving inefficiencies in social programs and reallocating some current assistance like homeless services that he says would be made duplicative, as well as through private philanthropy.
With the citywide Democratic primary under two months away on June 22, local political reporters have noted vagueness around the specifics of Yang’s policy platform, including a lack of detail on his economic goals.
Yang’s name recognition in the mayoral race was supercharged through his national U.B.I. pitch.
While it’s common for registered lobbyists to consult on New York City campaigns, Yang’s run for City Hall has been significantly driven by Tusk Strategies, a lobbying firm with corporate clients that have included AT&T, Uber, private equity giant Blackstone, Walmart, and business group the Times Square Alliance. Yang’s top staff are all employees of the consultancy, which was founded by Bradley Tusk, the former campaign manager for Mike Bloomberg’s third mayoral campaign who cultivated a reputation as “Silicon Valley’s favorite fixer” with city governments. His 2018 book was titled “The Fixer: My Adventures Saving Startups from Death by Politics.”
Previously, Tusk was a top aide to former Illinois Gov. Rod Blagojevich, who was convicted of federal corruption, and in 2009 helped steer Mike Bloomberg to a narrowly-won third term as New York City mayor after a 29-22 Council vote in October 2008 changed the city’s term-limit laws. Later, Tusk made a fortune valued at over $100 million through being compensated in Uber stock for his firm’s consulting work and has reportedly bragged that politics is just a hobby. An August 2018 Wall Street Journal profile credited Tusk with delaying for years proposed regulatory caps on Uber’s growth by New York City government.
Tusk, who was a bundler for Pete Buttigieg’s presidential campaign, has also been registered to lobby in New York City for MoneyLion, a credit-builder loan app; Bird, the electric scooter startup; and Charter Communications, the giant telecom company with billions of dollars in income. The website of Tusk Ventures, the VC firm where he is a co-founder and managing partner, touts its advisory experience in helping startups push back against city government regulations. The firm’s investment portfolio lists dozens of tech companies including Bird, as well as past investments like insurance company Lemonade and cryptocurrency platform Coinbase. Reporter Jeff Coltin found in City & State NY that Tusk Strategies is registered to lobby for two startups, Latch and Pymetrics, with business in front of city government; the former is in Tusk Ventures’ portfolio. Sludge’s review of NYC lobbying disclosures shows that Tusk Strategies also lobbied this year for Bird, as well as the services company formerly called Angie’s List (now ANGI Homeservices) and rideshare platform Wapanda.
Earlier this month, Tusk said in a Fox Business appearance that Yang opposes tax increases, reflecting Yang’s party-outsider and Silicon Valley inclination toward business interests. In a February speech to NYC executives, Yang threw cold water on the progressive campaign at the state level to increase taxes on the wealthy and corporations. During his presidential run, Yang had opposed the federal $15 minimum wage proposal, but endorsed it later; New York City adopted a $15 minimum wage as of Jan. 1, 2020.
NYC Budget Priorities
Yang’s name recognition in the mayoral race was supercharged through his national U.B.I. pitch. The guaranteed income pilot Yang is floating was put in context last month by economic journalist Bryce Covert, a New York Times contributor, who wrote that Yang’s $40 a week in cash pales in comparison to the benefits from housing or child care programs that could see reductions under Yang’s plan. The Yang campaign did not respond to Sludge’s inquiries about the details of its economic plans or the campaign’s economic advisers.
The New York City annual budget is typically a fixed pie, so the size of each slice matters. To put the trade-offs in perspective, the Independent Budget Office of NYC found that every $10 million in the city budget could provide 1,377 child care vouchers, 100 school-based nurses, 1.2 million home-delivered meals to seniors, or 213 homeless family shelter units for a year, among other uses. Income levels are set up in Albany: about two-thirds of New York City’s revenue comes from taxes like property and income taxes, and taxes are set by state law, so the city’s limited powers of home rule usually can’t do much to raise another billion here and there. Another 17 percent of city funding typically comes from the state and 7 percent from the federal government, according to a Feb. 2021 presentation from the nonpartisan Citizens Budget Commission (CBC).
New York has a “strong mayor” system, where the executive proposes the budget and then negotiates with the city legislature on how much goes to education, social services, and other municipal agencies. CBC analysts foresee city deficits of around $5 billion in the years ahead, from 2023-2025, and balanced budgets are required by state law, so some reductions to city expenditures will likely be required of the next mayor unless changes occur in Albany. (The 2022 city budget currently backed by Mayor de Blasio and the City Council is an exception, ticking up from a proposed $95.6 billion to $98.6 billion due to an influx of federal coronavirus relief funding.)
Last year, the Department of Education had the largest operating budget among city agencies, at over $24 billion, followed by the Department of Social Services at over $10 billion, according to CBC. The NYPD follows, at what amounted to an over $5.6 billion operating budget in 2020, with another $2.3 billion in spending on fringe benefits and $2.8 billion in spending on pensions, bringing the total expenses for policing levels closer to $11 billion, or nearly 12 percent of the 2020 city budget. The total NYPD operating budget has grown by one-third over the past decade, CBC found, mostly due to increased spending on administration and communications, street patrols, and counterterrorism.
Frontline community groups say they face a looming budget crunch, despite rising need for the resources they marshal for New Yorkers in need. The Center for an Urban Future (CUF), a nonpartisan policy organization, recently published a report on the roles played by human services nonprofits in New York during the pandemic and their funding shortfalls. Through interviews with two dozen groups, CUF found that both state and city governments had slashed funding support by around 20 percent last year, throwing services like emergency food aid and domestic violence counseling into jeopardy.
Community nonprofit RiseBoro’s CEO Scott Short told CUF in its report this month, looking ahead to deficits projected for the city budget, “We believe that the fiscal cliff that’s coming for the city and the state in FY22 and beyond are going to lead to further erosion in government programs, and we’re not confident that philanthropy is going to have the required attention span to really backfill the losses that we’re going to experience on the government contracts. So we’re doing okay for the current fiscal year, but very, very worried about the future.”
One potential source of savings, the NYPD budget, seems to be almost entirely off the table for Yang. Since last year’s nationwide protests against police brutality and for public accountability, a coalition of nearly 200 NYC groups in the campaign #NYCBudgetJustice has called for reductions of at least $1 billion in the $6 billion NYPD operating budget, achievable through measures such as a hiring freeze, removing NYPD from schools, and cutting PR budgets.
Yang has signaled that he would keep NYPD funding at current levels, calling for increased spending on things like subway patrols while also saying he would reallocate some funds toward things like mental health treatment. One of Tusk Strategies’ clients, starting in 2016, is the largest municipal police union, the New York City Police Benevolent Association, previously represented by Yang’s co-campaign manager Chris Coffey.
Bloomberg-Era Pilot in Guaranteed Income
With his promise not to use his influence in Albany to increase tax revenues from the wealthiest New Yorkers and his campaign’s ties to big business lobbyists, Yang’s vision of a “human-centered economy” seems to some like a rerun of the policies of former Mayor Mike Bloomberg.
Seth Pollack is an NYC activist and cofounder of No IDC, a progressive campaign that challenged New York state Senators who were elected as Democrats but in 2011 formed a coalition with Republicans. “The proposal that Yang has touted isn’t U.B.I.: it’s not universal, not available to everyone, and not basic, which means enough to live on,” Pollack told me.
Pollack compared Yang’s plan with the Opportunity NYC program under Mayor Bloomberg in 2007, which was also described as an experimental initiative in direct cash transfers to targeted low-income recipients. The three-year Bloomberg experiment sent an average of more than $6,000 a year to participating families, mostly single-parent households in low-income areas. “The program operated pretty similarly—the only difference is that at the time it was clear it wasn’t a progressive program, it was a technocratic one,” Pollack said. “The goals were to encourage poor New Yorkers to save money and spend it on education. Now there’s less paternalistic messaging, but the goals are the same: to pare back the welfare state and instead send cash to bank accounts and hope that people manage their lives with less assistance from the city.
“What gives the game away here is how Yang proposes to pay for this cash payment system,” Pollack said. “He’s not active in the campaign to tax the rich on the state level, he’s suggested he’d rely on private philanthropy. That’s naked privatization, making a program dependent on the whims of philanthropy rather than progressive taxation. It also tells us he thinks the richest class will be interested in a program whose size and scale they get to determine.”
In 2011, near the end of Mayor Bloomberg’s three-term tenure, about 46 percent of New Yorkers were making less than 150 percent of the city’s poverty threshold, according to an analysis by the Bloomberg administration. On Bloomberg’s way out of City Hall in 2013, the city’s inequality ranked among the widest of major cities in America, and it was accompanied by a decline in public housing maintenance, an increase in the homeless population, and abusive policing practices that led to the billionaire apologizing in 2020 during his try for the Democratic presidential nomination.
Charles Khan is the organizing director of the Strong Economy for All Coalition, composed of unions and community organizations advocating for fair taxes and budgets. “There really isn’t much to say about Yang’s human-centered economic policy,” Khan told me. “It’s a shell game. His platform is mostly platitudes, vague language and hyperlinks that send you back and forth to more vague language.
“Considering how much cash Yang’s campaign has on hand, it reinforces the idea that Yang has absolutely zero governing skills,” Khan said. “He could and should put real plans forward and be judged on them.” Khan mentioned promising ideas like Yang’s support for minority and women business enterprises (MWBEs) and a real estate vacancy tax, but noted that they all lack details on implementation and costs.
Khan said that previous mayors have made the pitch that they could spur financial powerhouses like big banks and billionaire philanthropists to invest in job growth with livable wages, with little to show. “Yang’s plan to have New York City invest directly in a stake in Amazon competitors and his ‘business czar’ are particularly concerning as a model for economic development because of the likelihood of corruption and pay-to-play,” Khan said.
While Yang has proposed a one-year moratorium on business fines, Khan said, “he wants to increase police presence, interactions and ticketing of street vendors who are much more likely to be poor, women, or a person of color. We all witnessed what this enforcement looked like, whether it be Eric Garner selling cigarettes or Churro ladies being tossed out of the subways.”
Khan sees in Yang’s statements on NYPD funding “a full-throated endorsement of Broken Windows policing, dog whistling to the ‘law and order’ crowd, and continuing the harmful and failed policing strategies we’ve seen under de Blasio and Bloomberg.”
“Honestly the more I look at his statements, the more I see the costly policies of Bloomberg with a new paint job,” Khan said.
With eight major Democratic candidates among the dozens of hopefuls running for mayor, New York City voters can take a short interactive quiz to find their matches and see candidates in different city races. This year is the first with ranked-choice voting, where voters can pick up to five candidates in order of preference, and unless a candidate wins a majority of first-place votes, the last-place candidate is then eliminated and their second-choice votes would be counted until a winner is determined. A list of current mayoral endorsements can be found here.
This post was updated to clarify that as a presidential candidate Andrew Yang had opposed the federal $15 minimum wage proposal, which he later endorsed as a New York City mayoral candidate.
