Taxes, Debt, Spending

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House Votes to Increase Coronavirus Checks By $1400

This week the House of Representatives voted to increase the amount of coronavirus aid checks going to most taxpayers from $600 to $2,000.

 

As part of a coronavirus aid bill that President Trump signed into law on Sunday, Congress had authorized a second round of stimulus checks. House Speaker Pelosi had been pushing for checks of $2,000 for most taxpayers, but Republicans resisted that idea. Instead, leaders of the two parties compromised on checks of $600. A large bipartisan majority voted in favor of the bill, which was packaged with legislation that funded the federal government through the end of the fiscal year.

 

After passage, President Trump began attacking the package, saying that the $600 checks were too stingy. He said that Congress should return and amend the bill to provide $2,000 checks. While he hinted he may veto the bill, he eventually ended up signing it. However, Congress did return to the Capitol to vote on an increase in the check amount, something that Speaker Pelosi had been pushing Republicans to accept.

 

By a vote of 275-134, the House passed HR 9051, The CASH Act. The Senate is now considering the legislation. Majority Leader Mitch McConnell (R-KY) has strongly opposed increasing the stimulus check amount to $2,000, citing concerns about deficit spending. It is unclear how much support there is for this legislation in the Republican caucus.

 

Do you support a $2,000 coronavirus stimulus check?

Trump Signs Coronavirus Aid and Federal Spending Bill

After blasting Congress for its spending priorities, President Trump signed into law legislation that keeps the federal government from partially shutting down as well as provides a new round of coronavirus aid relief.

 

Last week Congress passed legislation that funded the federal government through the end of the fiscal year (October 2021) and contained a new package of aid related to coronavirus. The coronavirus aid included these provisions, among other things:

  • A $600 check for most Americans
  • Continuing to allow self-employed workers and gig workers access to unemployment benefits
  • An extension of time limit for receiving unemployment benefits
  • An additional $300 boost in unemployment benefits
  • The Paycheck Protection Program, which offered forgivable loans to businesses affected by the pandemic, was extended and provided with more funding
  • An extension of the eviction moratorium that was set to expire within weeks

 

 

Trump Administration officials had worked with Congress to craft this legislation. These officials came to an agreement over this spending and aid package, which passed both the House and Senate with overwhelming bipartisan support. After passage, however, President Trump began tweeting that he did not like the package. He said that it should include a $2,000 check for most Americans and a cut in foreign aid. The $2,000 aid check was a priority for House Democrats, so Speaker Nancy Pelosi attempted to suspend House rules to pass legislation to amend the legislation. Republicans, citing concerns over spending, blocked that move. 

 

On Sunday, the president signed the legislation into law. Doing so prevents the federal government from partially shutting down this week. However, he used a provision in federal law to set aside some spending for 45 days. During this time, Congress can consider cutting that spending. If Congress does not act, however, the spending goes into effect.

 

Do you support President Trump signing the federal spending and coronavirus aid bill?

 

Looking Back at Congressional Coronavirus Aid Bills

With the passage of a new coronavirus relief bill by Congress this week, 2020 will be ending with the federal government authorizing nearly $4 billion to be spent on dealing with this pandemic. This spending has been approved by overwhelming bipartisan majorities, it has come after significant wrangling by Democrats and Republicans in Congress and the Trump Administration. 

 

The aid packages began shortly after the seriousness of the pandemic was becoming apparent to the U.S. public. In early, March the House of Representatives voted 415-2 and the Senate voted 96-1 to send a $8.3 billion spending bill to President Trump. The money in this legislation concerned vaccine development and use, prevention activities, preparedness for the virus, and for federal response if the virus spreads widely.

 

There was little opposition to this legislation in either the House or the Senate. Senator Rand Paul (R-KY) offered an amendment to cut funding from international programs to offset the new spending in this bill. By a vote of 81-15, senators tabled, or killed, the amendment. Sen. Paul was the only senator to vote against the final version of the bill.

 

Congress quickly passed a second coronavirus-related bill that same month. Here’s how VoteSpotter described that bill:

 

To mandate that businesses with fewer than 500 employees offer paid sick leave for two weeks, increase federal unemployment insurance payments to the states by $1 billion, provide more federal money for food aid programs prohibit the Trump Administration from strengthening social welfare benefit work requirements, and provide waivers to insurance companies to give no-cost coronavirus tests, among other things.

 

The House passed that bill 363-40 while the Senate approved it 90-8.

 

That was followed in late March by the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act:This bill incudes:

  • Expanded unemployment benefits
  • A one-time $1,200 payment to Americans whose income is under $75,000
  • A $500 billion fund administered by the Federal Reserve to provide liquidity to businesses
  • A $367 billion small business loan program that becomes a grant if firms don’t lay off employees
  • $130 billion in aid for hospitals
  • $25 billion aid package for airlines

 

This $2.2 trillion bill is the most expensive single bill ever passed by Congress. While there was some disagreement about the details of the bill, it did not face a dissenting vote in either chamber. 

 

April saw another round of coronavirus aid, with the House passing an aid bill by a vote of 388-5 and the Senate approving it by a voice vote. This $484 billion bill contained these provisions, among other things:

  • $310 billion for the Paycheck Protection Program
  • $75 billion for hospital aid
  • $25 billion for coronavirus testing
  • $60 billion for disaster loans and grants

 

After this, the bipartisan consensus for coronavirus aid broke down. The House of Representatives passed another aid bill in May along largely partisan lines, with 208 members supporting it and 199 opposing it. This bill included:

  • Nearly $1 trillion in aid for state and local governments
  • $200 billion to provide hazard pay for front-line workers
  • Another round of direct payments to households
  • $175 billion in housing aid
  • $75 billion for more testing

 

The Senate did not act on this legislation or any coronavirus bill until September. Throughout this time, President Trump continued to push for a payroll tax cut to be a main focus of any new coronavirus relief bill. In July, an administration spokesperson issued this statement:

 

As he has done since the beginning of this pandemic, President Trump wants to provide relief to hardworking Americans who have been impacted by this virus and one way of doing that is with a payroll tax holiday. He’s called on Congress to pass this before and he believes it must be part of any phase four package.

 

This idea never gained traction with either Democrats or Republicans in Congress, however. Some expressed the idea that such a tax cut would do little in terms of economic stimulus and would make the fiscal problems of entitlement programs like Medicare worse.

 

On September 10, Senate Republicans attempted to pass what they called a “skinny” coronavirus aid bill. Here is how VoteSpotter described the bill:

 

To provide an additional $300-per-week payment in unemployment benefits, an expanded loan program for small businesses affected by coronavirus, $105 billion for schools to deal with coronavirus as well as to fund school choice, $20 billion for farmers and ranchers affected by coronavirus, $31 billion for vaccines, $16 billion for testing and contact tracing, and $10 billion in loan forgiveness for the Postal Service if it makes certain reforms, among other things.

 

By a vote of 52-47, the Senate failed to meet the 3/5 margin necessary to proceed to debate. 

 

Talks to put together a bipartisan aid bill did not make much progress prior to the November election. Many Democrats and Republicans were waiting to see what the election results would be, hoping that voters would give their party an advantage. Once the election occurred, however, there appeared to be renewed desire to pass a bill.

 

The legislation that emerged did not contain the state and local aid provisions sought by Democrats nor the business liability shield sought by Republicans. Each side dropped demands for its favored position in order to pass a bill that had a variety of measures with bipartisan support. The price tag for this new aid legislation is $900 billion. Among other things, it contains these provisions:

  • A $600 check for most Americans
  • Continuing to allow self-employed workers and gig workers access to unemployment benefits
  • An extension of time limit for receiving unemployment benefits
  • An additional $300 boost in unemployment benefits
  • The Paycheck Protection Program, which offered forgivable loans to businesses affected by the pandemic, was extended and provided with more funding
  • An extension of the eviction moratorium that was set to expire within weeks
  • Funding for schools to reopen
  • An expansion in the eligibility of Pell Grants
  • Funding to purchase vaccines
  • $16 billion for airlines
  • A prohibition on surprise medical billing

 

With the coronavirus pandemic likely to continue affecting workers and the economy for months to come, there will likely be another push for an aid bill once Joe Biden is inaugurated president.

 

Congress, Trump Agree on New Coronavirus Aid Bill

After weeks of negotiations, House leaders and Trump Administration officials have agreed to a coronavirus aid package.

 

The price tag for this new aid legislation is $900 billion. Among other things, it contains these provisions:

  • A $600 check for most Americans
  • Continuing to allow self-employed workers and gig workers access to unemployment benefits
  • An extension of time limit for receiving unemployment benefits
  • An additional $300 boost in unemployment benefits
  • The Paycheck Protection Program, which offered forgivable loans to businesses affected by the pandemic, was extended and provided with more funding
  • An extension of the eviction moratorium that was set to expire within weeks
  • Funding for schools to reopen
  • An expansion in the eligibility of Pell Grants
  • Funding to purchase vaccines
  • $16 billion for airlines
  • A prohibition on surprise medical billing

 

While Congress had passed three bipartisan coronavirus relief bills in the spring, there had not been an agreement on further legislation since that time. Republicans and Democrats disagreed on a variety of issues. One of the Democrats’ largest priorities was aid for state and local governments. Republicans wanted liability protection for businesses. Neither of those things were included in this legislation, with members of the two parties jettisoning demands for them to focus on issues where there was widespread agreement.

 

The legislation is packaged with an omnibus appropriations bill that finalizes federal spending through the rest of the fiscal year. This keeps the federal government open through October 1 of 2021. 

 

Most members of Congress support this legislation. Some, however, oppose it citing concerns about deficit spending. This legislation will bring the amount of total federal coronavirus aid to $4 trillion.

 

Do you support the new $900 billion coronavirus aid bill?

Senator Blocks COVID Aid over Price Tag

Senators are meeting to consider a new coronavirus aid bill. One of them is slowing down the process over concerns about the high cost of the legislation.

 

On Friday, Sen. Ron Johnson (R-WI) objected to a motion that begin Senate consideration of a new aid package. Sen. Johnson expressed his concern that the Senate was rushing to enact a bill that was not well-written as well as legislation that would be "mortgaging our children's future."

 

Sen. Josh Hawley (R-IN) was attempting to begin Senate debate on legislation that would, among other things, provide another $1,200 check to most taxpayers. According to Sen. Hawley, "What I'm proposing is what every senator has supported already, this year...What I'm proposing will give working folks in my state and across this country a shot ... at getting back up on their feet."

 

This did not persuade Sen. Johnson. While he said, "I completely support some kind of program targeted for small businesses," he went on to say he "fear[s] we're going to do with this bipartisan package and what the senator from Missouri is talking about is the same thing, is a shotgun approach."

 

Sen. Hawley had been working with Sen. Bernie Sanders (I-VT) to advance direct-payment legislation. Congressional leadership has been working with the Trump Administration to craft a new coronavirus relief bill as well as legislation that would fund the federal government through the end of the fiscal year. There has been no agreement yet.

 

The motion by Sen. Hawley was a procedural motion asking unanimous consent for the Senate to proceed to consideration on his bill. An objection by one senator to the suspension of rules can stop that consideration.

 

Do you have concerns about the high cost of federal coronavirus relief legislation?

Congress Approves Short-Term Government Spending Bill

The federal government has money to operate for one more week. The Senate today voted to approve legislation that extends federal spending until December 18. The House approved the same bill on Wednesday.

 

The fiscal year ended on October 1. As described in this VoteSpotter Deep Dive, Congress must pass and the president sign spending bills every year to fund the government for the next fiscal year. However, this rarely happens. This year was no exception. In September, Congress passed legislation that provided this funding through December 11. However, this two-month extension was not long enough for members of Congress and the president to agree to a spending plan. Congressional leadership and the Trump Administration think they can find common ground within a week.

 

If they do not, there are two options: another short-term funding bill or a partial government shutdown. Some senators are saying they will not vote for another funding bill unless Congress also approves a coronavirus aid bill with direct payments to Americans. Senators Josh Hawley (R-IN) and Bernie Sanders (I-VT) are spearheading that effort. Congressional Democrats largely support this idea, but Senate Majority Leader Mitch McConnell (R-KY) has stood firm against it. If either House rejects a spending bill, then parts of the federal government labeled "non-essential" will shut down on December 19.

 

Do you think that members of Congress should refuse to fund the federal government until a coronavirus aid bill is passed with direct payments to Americans?

 

Deep Dive: Year-End Spending

Members of Congress are negotiating this week on a package of bills that will, among other things, keep the federal government from partially shutting down. These government shutdowns have become a quasi-routine experience in recent years, the result of Congress and the president failing to agree on a spending package that will fund the federal government for an entire fiscal year. The current spending legislation to keep all parts of the federal government open expires on Friday.

 

A previous Deep Dive examined the budget process that talks about the overall spending blueprint for the federal government. This Deep Dive will discuss the specific part affecting spending – the appropriations process. This is key to understanding when and why the federal government shuts down.

 

The Status of Federal Spending

 

The 2020 fiscal year ended on September 30. A new fiscal year started on October 1, which means that Congress needed to approve a new round of spending to keep the federal governments (or parts of the federal government) operating. If it failed to do so, this would lead to a government shutdown. These shutdowns occur when either Congress fails to pass spending bills to keep parts of the government open or the president vetoes these spending bills.

 

While Congress did not pass legislation to fund the federal government for the entire 2021 fiscal year, it did pass HR 8337, which continued federal funding at the Fiscal Year 2020 level. This continuing resolution keeps the federal government operating through December 11. Members of Congress and the Trump Administration have been negotiating during this time to come to an agreement on spending for the current fiscal year. 

 

With no agreement likely this week, Congress will vote on another short-term continuing resolution to prevent a government. Congressional leadership and the Trump Administration are close to finalizing a spending package for the rest of the fiscal year that includes a new coronavirus relief package as well and possibly defense authorization legislation.

 

The new continuing resolution will fund the federal government through December 18.

 

The Appropriations Process

 

Article I, Section 9, of the U.S. Constitution states: “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.”

 

Federal government spending is divided into two categories:

  • Mandatory: Programs authorized by Congress that operate outside the regular spending process are entitlement programs, and their spending is deemed “mandatory.” For Social Security, Medicare, and Medicaid, anyone who meets certain qualification is entitled to benefits. Funding for these programs does not have to be authorized yearly by Congress, although the eligibility and payment rules can be changed.
  • Discretionary: To pay for other government activities, ranging from military operations undertaken by the Defense Department to operating national parks to paying congressional staff, Congress must pass 12 appropriations, or spending, bills. These bills operate on a fiscal year basis. If they do not become law, funds cannot be drawn from the U.S. Treasury to pay for the government operations they cover.

 

Appropriations Bills

 

The 12 appropriations bills that should be passed by Congress every fiscal year (October 1 through September 30) are:

  • Agriculture
  • Commerce/Justice/Science
  • Defense
  • Energy and Water
  • Financial Services
  • Homeland Security
  • Interior and Environment
  • Labor/Health and Human Services/Education
  • Legislative Branch
  • Military/Veterans
  • State/Foreign Operations
  • Transportation/Urban Development

 

You can see the progress of the Fiscal Year 2021 appropriations bills through Congress here.

 

The number and title of these bills can be changed by Congress. After the 2001 terrorist attacks, Congress re-organized the appropriations process, which at that time had operated with 13 appropriations bills.

 

Consolidated Appropriations/Continuing Appropriations/Omnibus Appropriations

 

While the spending process is supposed to proceed with the 12 bills being passed separately and signed into law by October 1 of each year, this almost never happens. In fact, since 1977 (when the current spending system was put in place), Congress has passed all of the appropriations bills on time in only four years. The last time it did this was 1997. The usual pattern is that Congress passes some, but not all, of the bills to be signed into law by October 1.

 

When this happens, Congress can take a variety of steps to avoid a government shutdown. It can pass a resolution for continuing appropriations, which fund the government for a specified period of time at the level of the previous fiscal year. During this time, it can then pass a consolidated appropriations act, which combines two or more appropriations bills. An omnibus appropriations bill generally wraps all the outstanding appropriations bills into a single act for the rest of the fiscal year.

 

If special spending needs arise during the fiscal year, Congress can also pass a supplemental appropriations bill, which provides funding more money than what was contained in the original spending bill.

 

The Previous Government Shutdown

 

There have been a handful of government shutdowns since the mid-1990s, with the latest ending in January 2019. While called “shutdowns,” in reality much of the government keeps operating during these times. Government employees working in capacities deemed “essential” had to work. Those in “non-essential” positions could not do any work.

Prior to the beginning of Fiscal Year 2019 (which began on October 1, 2018), Congress had only passed these appropriations bills:

  • Defense
  • Energy and Water
  • Labor/Health and Human Services/Education
  • Legislative Branch
  • Military/Veterans

 

Continuing resolutions funded the government agencies covered by the other appropriations bills through December 21. President Trump signaled his opposition to signing any spending bills that did not contain funding for a wall on the U.S.-Mexican border. As a consequence, the agencies not covered by the already-passed appropriations bills were shut down on that date.

 

The parts of the government that were covered by these spending bills could continue to operate as normal, however. Since the Legislative Branch appropriations bill was signed into law, congressional staffers could continue to be paid their salary. So could employees of the Energy Department, Defense Department, the Labor Department, the Department of Health and Human Services, and the Education Department.

 

When President Trump signed House Joint Resolution 31 in January, it funded the federal government through the end of Fiscal Year 2019. There was no government shutdown for Fiscal Year 2020.

 

What This Means for You

 

A government shutdown can disrupt a variety of federal activities, from passport processing to the use of national parks. It also leads to disruptions in the pay of federal employees. It is possible that if Congressional leadership and the Trump Administration fail to come to an agreement by December 18, there could be another partial government shutdown. That is unlikely, since many details of the funding package appear to be agreeable to both sides. However, the Fiscal Year 2021 spending bill will also likely contain coronavirus relief legislation. Many have been urging Congress to pass a new coronavirus aid bill, so they are watching this closely to see what it will contain. The new or extended programs in this bill could have a significant effect on millions of Americans, but it will also come with a significant price tag.

Biden Urged to Forgive Student Loan Debt

When they ran for president, Senators Bernie Sanders and Elizabeth Warren make forgiving student loan debt a major piece of their campaign platforms. Now they, along with other members of the progressive wing of the Democratic Party, are urging Joe Biden to cancel student debt once he becomes president.

 

Under Warren's plan, the president would immediately begin canceling up to $50,000 in debt for 42 million Americans. This would cover about 95% of those who have borrowed money from the federal government. Others have suggested other ideas, such as focusing on borrowers who have incomes under $100,000. 

 

While student loan debt forgiveness is not a new idea, those supporting it now argue that it would help stimulate the economy. They contend that borrowers would see an immediate economic boost from seeing their debt wiped away. Historically, debt forgiveness proponents argue that student loan debt is crushing middle class families and holding them back from achieving the American Dream.

 

Critics say these views are wrong. They note that any student loan debt plan will be an expensive taxpayer giveaway to people who can afford to pay the money they borrowed, since they have an education that should lead to higher-paid work. They point out that people with higher incomes will benefit far more than those with lower incomes. In addition, they dismiss the economic stimulus arguments, contending that this idea would be one of the least efficient ways to provide more money to the economy.

 

Sen. Warren has promoted the idea that the Secretary of Education can unilaterally forgive student loan debt. Others disagree, saying that such a move requires an act of Congress. 

 

Do you support the federal government forgiving student loan debt?

Trump Pushes for Tax Cuts

A tax cut was one of the major pieces of legislation during Donald Trump's first term as president. He's promising another round of cuts if he's re-elected.

 

In an interview with the Fox Business Network, President Trump said that he wants to lower corporate taxes to a 20% rate and pursue additional individual income tax cuts. This would build on the tax cuts from earlier in his term. That tax package reduced the corporate tax rate to 35% and also cut individual tax rates.

 

Trump's opponent for the presidency, Joe Biden, opposes the Trump tax cuts. He is campaigning on a platform that calls for raising the corporate tax rate to 28%.

 

Supporters of these tax cuts argue that the U.S. corporate income tax rate was among the highest in the world prior to it being reduced. They say that higher corporate income tax rates hurt U.S. businesses compete worldwide. President Trump has also said that his tax cuts have helped spur economic growth.

 

Those who want to raise tax rates argue that the Trump tax cuts have only deepened the deficit. They say that higher taxes are needed to pay not only for current deficit spending, but also for new programs like Medicare for All. The president's critics also contend that his tax cuts were mainly skewed towards the wealthy.

 

Future tax cuts in a Trump second term, should the president be re-elected, would be unlikely if Democrats retain the House of Representatives or take control of the Senate.

 

Do you support cutting the corporate income tax rate to 20%? Do you think that individual tax rates should be reduced?

Congressional Democrats Introduce New Coronavirus Aid Package

House Democrats are pushing for Congress to pass an additional $2.2 trillion in aid for coronavirus relief. After failing to overcome GOP resistance to a more expensive aid package, they hope this latest plan will garner bipartisan support.

 

This legislation includes a variety of measures aimed at dealing with the fallout from the coronavirus pandemic, including:

  • Another $1,200 stimulus check for most taxpayers
  • $436 billion in funding for state and local governments
  • $225 billion for schools and child care 
  • Enhanced funding for unemployment benefits
  • $25 billion for airlines
  • $120 billion for restaurants

 

In May, the House passed a $3.4 billion aid package without Republican support. This was a departure from previous coronavirus bills, which were largely bipartisan. The Senate did not vote on the May legislation, with Majority Leader Mitch McConnell saying it was too expensive. Democrats and Republicans have failed to come to agreement on another aid bill, with the price tag being the main sticking point.

 

House Speaker Pelosi is facing pressure from some of her members to act on another coronavirus aid bill prior to Election Day. This latest legislation includes a variety of measures supported by Republicans, and it has a lower cost. She is hoping that this will be a good starting point in negotiations with Republican members of Congress and the Trump Administration.

 

Do you support spending $2.2 trillion in additional coronavirus aid?

New Jersey Hiking Taxes on Higher Incomes

New Jersey Governor Phil Murphy has long supported higher taxes on millionaires. After three years of trying to see his millionaire tax enacted, he finally got his way this week.

 

Legislators came to an agreement with the governor to increase the tax rate on the income of New Jersey residents that exceeds $1 million. The rate will go up from 8.97% to 10.75%. The state estimates that this will bring in around $390 million in new revenue. This tax hike is coupled with a one-time tax rebate for New Jersey taxpayers earning $150,00 per household (or $75,000 for a single taxpayer) of $500. The governor argues that these families have been hit hard by coronavirus and deserve some relief.

 

Gov. Murphy, who is from the Democratic Party's Progressive wing, ran for office on the platform of increasing taxes on higher income state residents. Legislators have been reluctant to embrace the governor's tax agenda in past years, however. This year, however, as the governor and legislators crafted a budget deal, they were looking for revenue to pay for coronavirus-related tax relief. They finally agreed on this tax hike to do so.

 

Supporters of the millionaire's tax contend that the wealthy need to pay more in taxes to help the lower- and middle-class residents of the state. They argue that the rich should sacrifice, especially during times of economic hardship. Opponents contend that wealthy New Jersey residents already pay high tax rates. They also note that the wealthy can easily move to other states if taxes in New Jersey are too high.

 

While the governor and legislative leaders have agreed to this tax increase, the legislature must formally vote on it. 

 

Do you support increasing taxes on people with incomes over $1 million?

 

Senate Rejects New Coronavirus Aid Bill

Yesterday, Senate Republicans tried to pass what they called a “skinny” coronavirus relief bill. Senate Democrats blocked the measure, arguing that it did not go far enough. Now prospects of passage of another aid bill for the pandemic before the election are dim.

 

Here is ow VoteSpotter describes this new coronavirus bill:

 

To provide an additional $300-per-week payment in unemployment benefits, an expanded loan program for small businesses affected by coronavirus, $105 billion for schools to deal with coronavirus as well as to fund school choice, $20 billion for farmers and ranchers affected by coronavirus, $31 billion for vaccines, $16 billion for testing and contact tracing, and $10 billion in loan forgiveness for the Postal Service if it makes certain reforms, among other things.

 

The total cost of the legislation is roughly $650 billion, although only around $300 billion is new spending. The other $350 billion is re-purposed funds that were already authorized.

 

Senators voted 52-47 to invoke cloture on the bill, which would have cut off debate and led to a vote on the package. However, this type of vote needs 60 senators to succeed. No Democrats voted in favor of cloture, and Sen. Rand Paul of Kentucky was the only Republican to vote against it. Sen. Kamala Harris (D-CA) did not vote.

 

Senate Minority Leader Chuck Schumer (D-NY) faulted this bill for not including a variety of aid that Democrats think is needed, including money for food, housing, broadband, and state and local governments. He accused Republicans of putting forward a bill so they can say they tried to do something, but with no intention of actually passing anything.

 

Sen. Mitch McConnell (R-KY), the Senate Majority Leader, said the Democrats were the ones playing politics. He said Democrats were more interested in hurting President Trump than in working with Republicans to aid American families.

 

The House of Representatives passed a coronavirus aid bill in July that had a price tag exceeding $3.4 trillion. 

 

What do you think Congress should do about coronavirus aid?

Trump's Payroll Tax Deferral Plan Sparks Controversy

President Trump has long supported a payroll tax cut, but Congress has been reluctant to follow his lead. In response, the president has put forward a plan allowing businesses to defer the collection of payroll taxes through the end of the year. This move has met resistance from both employers and employees, who contend that doing this may actually hurt workers.

 

The desire for a payroll tax cut has been a consistent theme with President Trump. When the initial economic effects of the coronavirus began to become apparent in March, he suggested the same thing. Congress has not included it in any coronavirus relief bill, and is not discussing such a tax cut currently. 

 

In response, Trump directed the Treasury Department to give businesses the option of deferring collection of payroll taxes through the end of the year. This is not a tax cut, however, since the deferred taxes would have to be collected at the beginning of 2021. In essence, this would give employees a boost in pay through December, but double the payroll taxes collected on their paycheck in the first few months of 2021.

 

Many business owners have refused to participate in this plan. They point out that while employees may get a temporary take-home boost in their pay, they will see a big reduction in take-home pay next year. The plan is optional for private sector employees, but mandatory for federal employees. The union representing many federal workers has asked that this tax deferral be optional for them.

 

Payroll taxes are levied on income to pay for Medicare and Social Security. Cutting these taxes would affect every worker, especially those with lower incomes. An income tax cut mainly benefits higher-income workers, since lower incomes are not subject to the tax. Payroll taxes, on the other hand, are levied on the first dollar of income, and are capped for higher-income workers.

 

Since 2009, there have been other payroll tax cuts that have been aimed at stimulating the economy. Some economists argue that since they affect lower-income workers, they provide money to go back into the economy more quickly. Others argue that there are more effective ways to stimulate the economy, such as direct payments to individuals. Some critics are also concerned about the long-term effect of cutting payroll taxes on Medicare and Social Security.

 

Do you support President Trump's plan to defer collection of payroll taxes and then collect those deferred taxes next year?

Budget Deficit Hits Record High

The Congressional Budget Office (CBO) announced this week that the projected budget deficit for 2020 will hit $3.3 trillion -- a record high gap between government revenues and spending.

 

The projected $3.3 trillion far exceeds the last record-high yearly deficit, which occurred in 2009. In that year, the budget deficit was $1.4 trillion. As explained in this Deep Dive, the budget deficit is when the federal government spends more than it receives in revenue in one fiscal year.

 

The U.S. has had a budget deficit every year since the late 1990s, and for many years prior to then. The accumulated deficits make up the national debt. The CBO projects the national debt to exceed the total Gross Domestic Product (the measure of how much economic activity occurs the U.S.) next year.

 

Many experts say that in the midst of an economic crisis, it is not wise to focus on deficits and debt. They argue that the federal government should spend freely to prop up the economy. Other experts counter this claim, noting that the federal government was engaged in deficit spending during good economic times, too. They say that at some point our nation's large amount of debt will hurt the economy and the ability of the government to provide services.

 

The new deficit numbers may affect the ongoing talks to produce another coronavirus spending bill. Democrats are pushing for a bill that contains over $3.4 trillion in new spending. Senate Republicans are likely to pass spending legislation that is around $500 billion due to many Republicans' hesitation about higher spending levels. 

 

Are you concerned about the record-high $3.3 trillion budget deficit?

 

 

NJ Gas Tax Going Up

Buying gas in New Jersey will cost more starting October 1.

 

Last week, State Treasurer Elizabeth Maher Muoio announced that the gas tax would be increased by 9.3 cents in a month. This is the result of a 2016 state law that requires a steady level of revenue for transportation projects. The law requires that tax rates be adjusted yearly to obtain that revenue. This year, with driving down because of the coronavirus pandemic, gas tax revenue decreased dramatically. That set the stage for an automatic gas tax hike for New Jersey drivers in the coming fiscal year.

 

The tax hike will mean that for every gallon of gas purchased in New Jersey, 50.7 cents will be paid in taxes. Currently, the state has the 10th highest gas tax rate. After October 1, it will have the 4th highest rate in the nation.

 

This impending tax increase has critics. They say it is coming at an especially bad time for both consumers and businesses. They argue that consumers who are already suffering from high unemployment and an economic slowdown cannot afford to pay higher gas prices. They also contend that New Jersey businesses that sell gas will be hurt by this increase. 

 

Unless legislators change the law, however, this gas tax will go into effect automatically. 

 

Do you support increasing the gas tax?

New Jersey May Give “Baby Bond” to Most Children in the State

If you are born into a family that earns up to 500% of the federal poverty level, New Jersey Governor Phil Murphy wants the state to give you a $1,000 “baby bond.”

 

Under a proposal unveiled by Gov. Murphy this week, the state would place $1,000 in an account for most New Jersey children. That money would accrue interest and be payable when the child is 18. This would apply to any children who are in households that earn under 500% of the federal poverty level (roughly $131,000 for a family of four). Gov. Murphy estimates 75% of New Jersey children would qualify.

 

Gov. Murphy and supporters of these bonds contend that they will help reduce inequality. They contend that they will provide money for young adults who otherwise may not have a savings account, giving them a better start in life. This is part of Gov. Murphy’s legislative proposals that he contends will reduce inequality.

 

Critics of the bonds counter that they will do very little to help, since they will not accrue significant interest in 18 years. They argue that this is an expensive measure that is more about looking like the governor is helping address inequality instead of taking real measures to help the poor. The first-year cost of the program would be approximately $80 million.


New Jersey Senator Cory Booker has proposed similar legislation at the federal level. The New Jersey legislature must approve Gov. Murphy’s “baby bond” plan before it goes into effect.

Do you think the government should give every child a $1,000 bond that matures when the child turns 18?

Trump Issues Coronavirus Executive Orders

With Congress and White House negotiators unable to agree on a new coronavirus relief bill, President Trump issued four executive orders late last week aimed at achieving some of his key goals.

 

These executive orders would, among other things,

  • Delay the collection of the payroll tax for workers who make less than $104,000 a year
  • Extend the extra unemployment benefit of $400 per week (this will last until December 6 or until funding is gone)
  • Require states to pay up to 25% of extra unemployment benefits
  • Allow student loan recipients to defer payment through the end of the year, and waive all interest on federal loans through December 31

 

In addition, one of the president's orders requires the federal government to consider whether more actions should be taken to stop evictions as a way to stop the spread of the coronavirus.

 

The president said these orders were necessary to protect Americans who were suffering because Congress would not act. However, he quickly faced criticism that he was acting in ways that were not authorized by the Constitution. Many pointed out that prior to taking office, he had criticized then-President Barack Obama for acting in the same way. Some legal experts contend that the president does not have the authority to take these measures, since only Congress can authorize federal spending.

 

In March, Congress had passed legislation that provided additional unemployment payments, but these payments ran out in late July. Members of Congress and the Trump Administration had been meeting to craft a new legislative package in response to the coronavirus pandemic. However, neither side could agree on a suitable compromise. It is unclear how the president's actions will affect attempts to come to an agreement. The fate of these executive orders will likely be decided by federal courts.

 

Do you support Presidents Trump's executive orders that, among other things, provided an additional unemployment payment?

Sanders Pushing 60% Tax on Billionaires' Wealth Gains

Senator Bernie Sanders (I-VT) has introduced legislation to impose a new tax on any gains in wealth by billionaires during the coronavirus crisis.

 

S 4490 would impose a 60% tax on any gains in wealth by billionaires between March 1 and the end of the year. The revenue from this new tax would then be directed to Medicare in order to pay Americans' out-of-pocket medical expenses for the period of 1 year.

 

Taxing billionaires has long been a goal of Sen. Sanders. During his runs for the Democratic presidential nomination, Sanders often attacked the wealthy and suggested government policies to tax them. He estimates that this plan could raise over $422 billion.

 

Sen. Sanders argues that it is wrong for billionaires to be making more money during a time when so many Americans are suffering. He says his tax is a good way to help average Americans who are struggling with medical bills. Opponents, however, say that it is just another one of Sanders's socialist ideas that is aimed at punishing the successful. They also note the difficulty of administering the program.

 

Given the Senate's control by Republicans, this legislation is unlikely to be considered.

 

Do you support a 60% tax on billionaires' wealth gains that were made this year?

Biden Unveils Child Care, Elder Care Plan

Democratic Presidential nominee Joe Biden this week outlined a $775 billion proposal that would expand federal spending on child care and elder care.

 

The Biden plan would:

  • Provide universal preschool for 3- and 4-year old children
  • Create a federal program to build child care facilities
  • Fund child and elder care jobs
  • Expand the use of community health care workers
  • Create a $5,000 tax credit for caregivers

 

The Biden campaign says this initiative will help millions of Americans who are caring for their children or elderly relatives. They argue that it will also create 5 million new jobs. The need for greater federal involvement in child care is something that has been a theme for Biden, especially during the coronavirus pandemic.

 

However, the initiative also has critics, which call it too costly. They also argue that expanding federal efforts in these areas constitute government intrusion on family activities.

 

If elected president, Biden would need to convince Congress to pass this package for it to go into effect.

 

Do you think the federal government should spend more on child care and elder care?



Trump Pushing for Coronavirus-Related Payroll Tax Cut

With another coronavirus relief bill likely to move through the House and Senate in August, members of Congress are considering what should be in such legislation. President Trump wants it to have a payroll tax cut.

 

The desire for a payroll tax cut has been a consistent theme with President Trump. When the initial economic effects of the coronavirus began to become apparent in March, he suggested the same thing. Congress has not included it, however.

 

In a statement this week, a White House spokesman said:

 

As he has done since the beginning of this pandemic, President Trump wants to provide relief to hardworking Americans who have been impacted by this virus and one way of doing that is with a payroll tax holiday. He’s called on Congress to pass this before and he believes it must be part of any phase four package.

 

Payroll taxes are levied on income to pay for Medicare and Social Security. Cutting these taxes would affect every worker, especially those with lower incomes. An income tax cut mainly benefits higher-income workers, since lower incomes are not subject to the tax. Payroll taxes, on the other hand, are levied on the first dollar of income, and are capped for higher-income workers.

 

Since 2009, there have been other payroll tax cuts that have been aimed at stimulating the economy. Some economists argue that since they affect lower-income workers, they provide money to go back into the economy more quickly. Others argue that there are more effective ways to stimulate the economy, such as direct payments to individuals. Some critics are also concerned about the long-term effect of cutting payroll taxes on Medicare and Social Security.

 

Do you think the new coronavirus relief bill should include a payroll tax cut?

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