credit: susan walsh, associated press
President Trump announced a stimulus plan of his own over the weekend by executive order. You can’t blame him for not wanting to wait for Congress to come to an agreement. But the orders, which he continues to call a bill, even though it is not a bill, could fall far short of providing the help the country so badly needs.
What’s in the
The orders call for additional funds for the unemployed to the tune of $400. It is not the $600 we had grown accustomed to from the Cares Act but it is also not the $200 that Republicans had wanted. But it is something and since the Cares Act expired in July, families have had nothing.
The orders also suspend the collection of payroll taxes from September 1 through December 31. This will save employers the 6.2% Social Security tax on wages for employees making less than $100,000 per year.
There is also a moratorium on evictions but only for homes that are financed with federally-backed loans. This is an odd stipulation. How is a tenant to know what kind of loan is on their landlord’s property? And what of those that do not qualify? Most of my investments do not have loans on them so can I evict with wild abandon now? That’s not right. Why not just keep in place the Cares Act moratorium that has seemed to be working just fine?
Recall that several states still have in place their own eviction moratoriums, which will hopefully safeguard some tenants for the time being.
Lastly, there is a furlough of student loans for a future 6 months. Democrat’s Heroes act would forgive up to $10,000 but there is no loan forgiveness in the President’s orders. It is simply a pause on payments.
So where is all of this money to come from if the country will not make income through payroll taxes and will dole out more for unemployment? Much of this will come from the Disaster Relief Fund, the government’s in-case-of-emergency stores. This fund currently has approximately $70 million but after these orders, it will be depleted by almost two thirds. Of course, what we are in qualifies as an emergency but keep in mind that hurricane season is upon us and experts are saying that it could be a doozy. If you were not a prayer before, now is the time!
So look, before this weekend we had nothing and people were hurting. Now we have something but many people will still be hurting.