Trump's latest COVID-19 relief proposal is just another tax cut for the wealthy in disguise

Trump's latest COVID-19 relief proposal is just another tax cut for the wealthy in disguise

August 22, 2020
  • President Trump rolled out a series of executive orders that are theoretically designed to help ease the economic burden of the coronavirus pandemic for Americans.
  • But the orders — from the meager unemployment boost to the payroll tax cut — do little for actual working Americans and mostly help the wealthy.
  • Max Burns is a veteran Democratic strategist.
  • This is an opinion column. The thoughts expressed are those of the author.
  • Visit Business Insider's homepage for more stories.

President Donald Trump's much-delayed plan to repair the economic damage caused by COVID-19 has little that would help the 50 million Americans out of work due to coronavirus. And it's clear Trump's "plan" uses the only tool in the GOP drawer: tax cuts for the wealthy.

Too late, too little

If you're keeping track at home, Trump promised voters a "great" plan to deal with the fallout from the COVID-19 crisis almost five and a half months ago. Now, out of ideas and almost completely disconnected from the dismal reality of this national pandemic, the White House rolled out a set of dubious "relief" proposals in the form of executive orders that actually provide less financial support to American families than they received from the bipartisan CARES Act passed in March.

The surreal centerpiece of Trump's big business bailout is a 50% cut in weekly emergency unemployment payments to regular people from the boosted $600 a week to just $300 a week. Yes, you read that right. Instead of passing a bill to sustain a popular, bipartisan benefit designed to keep working class and middle class families fed and housed during the pandemic, Republicans are simply relying on Trump and slashing it.

Not only does the Trump plan cut the CARES Act emergency unemployment payments, it also tried to shift more of the funding burden onto cash-strapped states. The White House has since backed off some of those requirements, but even the revised edition is still onerous for state governments.

So while both red and blue states struggle to keep their finances afloat amid an unprecedented strain on public health resources, the White House and Republicans in DC are ready to admit defeat and pass more of the financial and logistical weight of this crisis onto states and small towns least able to handle it.

Treasury Secretary Steve Mnuchin told the American people it would likely be only "a few days" before states resumed the now-stalled COVID-19 unemployment payments but weeks later the payments haven't started in many states and the enhanced checks for most people may not go out for weeks more. 

A nonsensical tax cut

That isn't the only problem facing Trump's foolhardy "recovery" plan. 

Social Security benefits are paid out to millions of Americans through the Social Security trust funds, which are in turn funded in large part through payroll taxes. As economists and public policy experts have noted, gutting the payroll tax, as Trump has proposed, would be devastating to the Social Security funds. 

With Trump trailing presumptive Democratic nominee Joe Biden by four points in senior-rich states like Florida, it would seem like a perplexing time for Trump to propose raiding the Social Security trust funds to fund corporate kickbacks.

And no one in the White House can explain how a payroll tax cut helps the millions of Americans who are unemployed and therefore are unable to benefit from a reduction in payroll tax rates.

But the move makes much more sense when you think about it in the context of the GOP's unending war on programs like Social Security.

Trump gave away the game in a rambling press conference where he pledged to "permanently eliminate" the payroll tax in his second term, along with Social Security as we know it. It isn't hard to imagine one of Trump's elite country club members whispering this half-baked idea in the president's ear during a round of golf. 

But the cheers of country club lounge lizards aren't the same as votes in Congress, and it's increasingly clear the transparent greed of Trump's payroll tax scheme is spooking even some Senate Republicans. Nebraska Sen. Ben Sasse decried Trump's proposed giveaway as "unconstitutional slop." Senate Finance Committee Chairman Chuck Grassley warned that raiding Social Security to reward the ultra-rich "creates a public relations problem." 

Failing the Americans who need it most

Unfortunately for millions of Americans in dire need, most of Trump's "recovery plan" collapses upon inspection. 

Take the Executive Order Trump claims will "ban evictions" during the pandemic. 30 million Americans across the country are on the verge of eviction in what NPR called a looming "homelessness pandemic." There's just one problem: Trump's Executive Order doesn't actually ban a single eviction!

"Trump's order neither bans evictions outright nor provides rental assistance," an NPR report found. That's because Trump legally can't step on the toes of Congress — the only body empowered to pass laws on subjects like eviction bans or rent assistance. 

Like so much of Trumpism, the big reveal was just a hollow floor show designed to hoodwink the American people. But unlike the abstract social issues in which Trump normally traffics, voters will notice when promised stimulus checks and eviction support fail to appear. 

Signing Executive Orders may make for compelling cable news programming, but it doesn't deliver a single dollar to families forced to make tough choices between paying rent or feeding their children.

Trump and Senate Republicans have abdicated their leadership role in fighting the coronavirus. Instead, Republicans are using an unprecedented unemployment crisis to advance their tried-and-failed tax cut agenda. So it falls to Joe Biden and congressional Democrats to offer a real way out of our national nightmare.

Max Burns is a veteran Democratic strategist and senior contributor at Millennial Politics. He regularly appears on NBC News Now, Fox News, and Bloomberg Radio. Follow him on Twitter @TheMaxBurns

This is an opinion column. The thoughts expressed are those of the author(s).

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