You’ll remember that about a month ago, Trump signed an executive order and three “memoranda” that were supposed to take care of the economy, since Mitch McConnell wouldn’t. These were: a payroll tax deferral, a supplement to unemployment benefits, a deferral on student loan repayments, and a possible ban on evictions. Let’s review how those are doing.
First, the payroll tax cut is pretty much dead in the water. It wasn’t a tax cut but a tax deferral, as you know; the taxes would still be owed. And employers didn’t want to mess with it.
More than a month after Mr. Trump signed an executive memorandum to defer the collection of the payroll taxes that workers pay to help fund Social Security, few companies or people are taking part. Trade groups and tax experts say they know of no large corporations that plan to stop withholding employees’ payroll taxes this fall. As a result, economic policy experts now say they expect the deferral to have little to no effect on economic growth this year.
The exceptions are the military and other government employees, who don’t have a choice to opt out.
The Trump administration’s controversial payroll tax deferral plan will be mandatory for military members and Defense Department civilians, officials announced over the weekend, although businesses can choose whether to participate.
The result will be that, starting with the September mid-month pay period through the end of the year, most service members will see paychecks increase by about 6.2%, but will have to pay back all of that money through larger withholdings from Jan. 1 through April 2021. Late payments will be subject to penalties, yet to be named.
Such a deal. But there’s more.
President Donald Trump pledged that service members and Defense Department civilians won’t have to pay back the extra money that will be in their paychecks through the end of the year under the payroll tax deferral plan — if he wins re-election in November.
In a Twitter post Thursday night, Trump wrote, “When we win I, as your President, will totally forgive ALL deferred payroll taxes with money from the General Fund.”
He also charged that former Vice President Joe Biden would “do the opposite” if he wins.
Presidents don’t have the constitutional authority to “forgive” a tax, of course.
In signing the Aug. 8 executive order authorizing the payroll tax deferral, Trump suggested that he might seek to waive repayments; he appeared to double down on the promise in the tweet Thursday night.
House and Senate Democrats have said that the deferral plan is a threat to the stability of the Social Security trust fund. Rep. Don Beyer, D-Virginia, charged Friday that Trump is seeking to buy votes.
“The President’s promise to forgive deferred payroll taxes if he is re-elected is open, intentional corruption,” said Beyer, a member of the tax-writing House Ways and Means Committee, in a statement. “It is akin to paying people for votes.”
Of course Trump is trying to buy votes. I hope most of the government employees who see a pay increase have the sense to sock the increase in the bank so they can pay the tax back next year.
And, of course, Trump’s payroll tax cut will hurt Social Security and Medicare, and if it became permanent those programs would no doubt be destroyed. See Biden introduces a powerful new issue for 2020: Social Security.
Another memorandum was supposed to extend the supplemental employment benefit, although at $400 a week instead of $600. The idea was that the feds would provide $300 a week if the states could cough up $100. As near as I can tell, no state could provide the $100, so the Trumpies quickly revised the supplement to just $300 a week. Now, even the $300 is ending.
In recent days, the Federal Emergency Management Agency, the agency funding the unemployment aid program, said the benefit was scheduled to last for a maximum of six weeks from the beginning of August. The benefit has been going to workers in 48 states, Guam and D.C.
The agency has told states including Texas, Iowa, Montana, Tennessee and New Hampshire that the week ending Sept. 5 was the last covered by the additional benefit. Some states appear to have received even less. New Mexico, for example, told residents that they could expect only four weeks of payments — assistance lasting only through Aug. 22.
Again, this money was coming out of the FEMA budget, which is leaving FEMA hard pressed to do, you know, FEMA stuff. We have a few emergencies going on right now, you know.
The student loan payment deferral was implemented, and as far as I can tell no one has any objections to it.
Finally we come to the eviction ban. Trump’s executive order didn’t implement the ban; it just directed HHS Secretary Alex Azar and CDC Director Robert Redfield to “consider” whether an eviction ban was needed. No money was provided for this. I doubted anything would be done, but the CDC actually did ban some evictions through the end of the year. However —
The ban doesn’t relieve tenants of their obligation to pay rent or set up any funds to help renters meet their rent, making it likely that many will rack up debt during the reprieve. And for many, the order will just delay their eviction. And other holes in the federal protection and inconsistent state applications also leave renters vulnerable, housing advocates say.
The CDC ban does not ban late fees or interest, meaning that by the end of the tear most tenants would be sunk in a debt so deep they can never hope to climb out of it. And the landlords aren’t getting any money, meaning they might not be able to pay for repairs or upkeep. And there is evidence a lot of people are being evicted, anyway.
We need a real relief package, but I’m not seeing one as long as Republicans control the Senate.