President Trump signed four executive on Saturday in an attempt to bypass Senate inaction on the next round of COVID-19 economic relief. While the stock market continues to perform well, the fundamentals of the American economy are shaky. If unemployment remains high and wages remain low, the economy for most Americans will get worse over the next few years. Through federal action now to keep families in their homes and food on the table will go a long way in stabilizing the American economy and allow for a strong recovery.
What are the four executive orders? Will they make a difference?
In summary, talking about the important issues isn’t enough. We need real investment to solve America’s most pressing needs.
A furlough of payments on the payroll tax: This is unlikely to make much of a difference for most Americans, if upheld in the courts, because the tax payments will still be due in January. This is problematic because it will take money out of the social security and medicare funds that are financed by the payroll tax. It will also leave families struggling in January when skipped payments are still due.
Instead: Congress should expand the Earned Income Tax Credit and Family Tax Credits for low and middle income families. Not only will these changes place more money into the pockets of families making less than $100,000 a year, but also be easier to implement and not put social security and medicare in a funding crisis.
Consider an Eviction moratorium: Many families are in need of assistance right now. However, this is a very short-sighted approach to our housing crisis, because the rent payments are still due at the end of the moratorium - if it is implemented. (The E.O.’s do not actually create a moratorium but instruct others to consider whether or not to do it). While moratoriums are helpful to buy families a month or two, Congress needs to appropriate rental assistance funding to cover those missed rent payments. While our focus is normally on the families interests first, we must also recognize the overall economic reality that landlords will suffer too. Landlords are unable to make their payments if people aren’t paying rent. They will likely have to sell their properties (businesses) to large property managers who will attempt to control the entire market.
Instead: Congress should pass $100 billion in rental and mortgage assistance in addition to the eviction moratorium so that the property managers can continue to pay their bills - including property taxes that fund our schools and keep families in their homes after the moratorium ends.
Student loan deferment: The Executive Order keeps federal student loan interest at 0% and defers payments until December 31st. The Dept. of Education has the authority to do this and this is the least likely decision to be challenged in court.
Instead: We need to recognize the tremendous burden of student loan debt on so many Americans. Identifying long-term solutions to higher education financing is needed. Once again, this economic downturn is hitting higher education HARD. Higher education in Ohio has lost about $1billion of state level investment over the past 20 years. It’s time that we make post-secondary education a priority (which includes trade and skills, community colleges, and four year degree programs.
Unemployment compensation: At the end of July, pandemic unemployment compensation expired. This was the additional $600 a week provided to those on unemployment and also extended unemployment to independent contractors and gig workers who are often left out of the system. President Trump’s executive order extends the program at $400, but $100 of that needs to be paid for by the state. The problem is that states like Ohio might not be able to come up with that 25% match for the program. Also, this is a cut to benefits of 1/3.
Instead: Congress should re-authorize the pandemic unemployment program through the end of the year at the full $600 level. This will allow Ohioans who are struggling to keep a roof over their head and food on their table.