President Donald Trump.
President Donald Trump used an executive order to extend an unemployment benefit and has also added a payroll tax cut after Coronavirus relief bogged down in congress. AP. President Trump renewed the unemployment benefit and authorized an additional $400 a week payment, which was reduced from the original $600 payment. The federal government will be paying $300 of that amount with the rest coming from state sources, which may reduce the payment in states that are having economic troubles due to the outbreak. In addition to the unemployment benefit, President Trump authorized a payroll tax cut that would defer tax payments until the end of the year. This would in essence be an interest free loan that would likely be paid back on the 2020 tax returns. The order also extended student loan deferments and eviction protections from landlords that receive federal funding.
My Comment:
For President Trump to do this action shows how bad the situation in congress is. Just a few weeks ago it sounded like a 5th Coronavirus relief package was a done deal but those efforts look like they have now failed. With congress deadlocked I don't know what else President Trump could have done here.
This benefit will be a godsend for people that have lost their jobs to the pandemic. Though many people are back to work, some of those jobs haven't come back and these payments will help the unemployed take care of themselves and their family. Given the circumstances I think it's a good thing for the people of the United States who have lost their jobs.
It's also true that the payment isn't as big as it once was. Going from $600 a week to $400 is a big dip but you have to remember that this is still way more than people would normally get. For someone like me who lives in the Midwest and has a low cost of living $400 a week would be enough to pay my bills, especially considering that I would be getting the normal unemployment benefit as well.
The payroll tax cut is interesting. As the article says, it's not actually a cut, it's a deferral, that you would probably have to pay back when you file your taxes. In the short term that would be a pretty huge boon to workers as they would have a lot more money in their pockets and they would presumably spend it. But on tax day they might not be happy as they would likely get a much smaller return or might even have to pay back in. For me personally I doesn't make much of a difference but for other workers it could be a lifesaver. And it might have a negative impact during tax time in 2021, assuming nothing is done to ensure it's paid off.
The student loan deferrals and federal eviction protections are pretty huge as well but aren't getting much coverage. Both of them will be lifesavers for people that they effect but won't have much of an effect on anyone else. Given how expensive student loans are it will likely be fairly popular among college graduates.
Politically I think this is a win for President Trump. He's making the case that he can help the people when it's pretty obvious that the Democrats just want to play games. Not that the Republicans in Congress come out looking that great here either, but at least President Trump is giving them some cover for Mitch McConnell's failure to herd the cats.
I think this puts the Democrats in a difficult position as well. They aren't getting anything done and if they try and challenge President Trump on this it's going to hurt them. If they successfully sue and stop President Trump from doing this they are going to have to face the voters wrath. And even if they fail it's going to look bad. I know they don't like the payroll tax deferral, but imagine if it gets implemented and then the Democrats take it away? People will be furious with them.
I do wonder how all of this gets paid for, but that's been a concern for awhile now. Fiscal conservatism went the way of the Dodo in this country and other then a few holdouts in congress it's dead. I am guessing everything will be paid by even more debt, which is less then idea. Still though, I think these stimulus orders will help save the economy and help a lot of people which is probably worth the cost that will be paid.
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