August 10, 2020
written by Net Advisor™
WASHINGTON, DC. President Trump issued four Executive Orders after House Democrats refused to come to a consensus over another stimulus aid package for out-of-work Americans due to State-enforced business shutdowns.
The Executive Orders.
1. Provide up to $400 additional Unemployment Compensation. Requires state governors to chip in $100 per week to receive the full $300 per week from the federal gov. This creates an intensive for state governors. If you want to shut down your state economies, and you want people to get paid not to work, cough up 25% of the bill, and the Trump Admin will pay the other 75%.
2. COVID-19 Assistance to Renters and Homeowners. This helps to prevent sending millions of Americans from becoming homeless based on state forced shutdowns. States should do more in helping their own people for actions the state actually caused.
3. Defer Payments on Student Loans for unemployed due to Coronavirus. Students can defer student loan payments as related to income constraints due to further state-induced Coronavirus shutdowns.
4. Payroll Tax Holiday. This temporarily eliminates extra required taxes taken out of one’s paycheck, effectively putting more money in the hands of the worker instead of giving it to the government.
Trump Called House Dem’s Bluff.
House Speaker Pelosi (D-CA) said July 26, ‘we (Congress) can’t go home without a Coronavirus relief deal.’
House Democrats demanded they wanted unemployment benefits to continue with $600 per week until January 2021. Senate Republicans were concerned that some people will not want to work because some Americans would make more money by not working.
President Trump sought to mitigate this issue by moving to support the $600 per week unemployment benefit as Democrats Demanded.
Then, Democrats moved on to other issues, such as demanding an arbitrary $ 1 Trillion bailout to poorly-ran state governments. Dems would not budge without state bailouts, and the result of this was no economic aid for any Americans.
Dems Recent History in Blocking Aid to Americans.
Recall this past March, House Democrats took off for vacation instead of addressing aid issues for American families due to the Coronavirus.
Then it was all 47 Senate Democrats who BLOCKED aid for American families as a result of Coronavirus. Eventually, a deal was worked out but Democrats delayed the aid for Americans.
With no current deal, Congress will be out of session (on vacation) until September 8th.
Keep in mind Congress does not have to be out of session, they choose to be. Despite millions being unemployed, Congress is guaranteed to get their paychecks and their healthcare and build their retirement benefits at taxpayer’s expense.
This inaction by Congress led to President Trump’s Executive Orders (EO’s) for economic relief for Americans.
Where is the Money Coming From?
The funding for these EO’s are not unlimited. The funding for all this is limited to EXISTING funds and by PRIOR Congressional Acts.
“the president is ready to extend enhanced federal unemployment benefits unilaterally, using unspent money from the $2 trillion CARES Act, and to renew the moratorium on evictions.”
— Source: Washington Times, Aug. 5, 2020 (underline emphases added)
These EO’s are not laws, but rather temporary orders, historically implied under U.S. Constitution, Article II.
EO’s CAN be undone by any future President without debate; by existing joint Congress; or by the Judicial Branch (ultimately, by review of the U.S. Supreme Court).
Media on the Attack.
It wasn’t long until a number of media companies including but not limited to MarketWatch, Forbes, CNBC, Los Angeles Times, Motley Fool, RCP, and many others, began pushing false and misleading political propaganda.
Some media claimed to a various degree that Medicare and Social Security were somehow ‘under attack,’ and ‘at risk,’ because of President Trump’s EO aid.
Fact Check.
First on budgeting. Congress really hasn’t had a balanced budget in 30 some years. If a citizen ran their finances like Congress does, one would be in bankruptcy faster than one could say, “racist!”
There are really two different budgeting methods for Congress.
There is the official budget where money is allocated for X, Y, Z. This is funded by tax receipts and other revenues from the federal government.
Then there is this other budgeting method called “Off-Budget” items. These are programs that the government really can’t afford to include in the regular budget but are required to by law. So Congress long ago created numerous laws to create these off-budget items and they would be funded with or without the ability to pay for them. This means sometimes (often times) we borrow the money.
Congress could cut back on existing spending in the budget, but no one ever seems to agree on anything, so a trillion dollars or so extra per year is just added to the National Debt.
What Are These “Off-Budget” Items Anyway?
Congress’ off-budget items include, but are not limited to:
- Social Security (24% U.S. Budget, 2018).
- U.S. Post Office (PDF P7).
- Federal Home Loan Banks (Fannie Mae and Freddie Mac).
Social Security.
The Social Security Administration or SSA tax is 12.4% of one’s income (up to $132,900 in wages for 2019) if self-employed. For all employees, 6.2% is paid by the employer, and another 6.2% is taken out of one’s paycheck from the employee in the form of pay roll taxes. These are additional taxes one pays in addition to income taxes.
The SSA then invests the money in U.S. Treasuries in a trust fund. SSA then pays out money each year as taxable benefits.
Social Security has remained an ‘off-budget’ item since 1990 and is funded no matter what tax revenues the federal government has. So for anyone to say that ‘Social Security is at risk due to a cut or elimination of payroll taxes’ is – FALSE.
A 2015 audit found that SSA overpaid $16.8 Billion to people who should not have revived this money.
Also in 2015, Senator Bernie Sanders (I-VT) claimed that Social Security does not add to the U.S. deficit. This was independently fact checked back then and deemed – FALSE. Social Security contributed $73 Billion to the U.S. deficit just in 2014.
Social Security is expected to add to the U.S. deficit every year, due mostly in part to the increased retiring of Baby Boomers.
Medicare.
Medicare composes 15% of the U.S. Budget (2018). It is funded from both payroll taxes and income taxes paid from Social Security benefits. Medicare’s Supplementary Medicare Insurance (SMI) is paid by an authorization of Congress (ie: paid by general tax revenues in annual budgets).
The amount of payroll taxes withheld for Medicare is 1.45% for employees and 1.45% for employers. So if you earn say $50,000 a year, that’s $725 ($60.42 per month) in extra payroll taxes an employee and employer each pay annually.
If Congress wants to ever get elected in any future years, they will fund Social Security and Medicare fully through income taxes or borrowing.
So for anyone to say that ‘Medicare is at risk due to a cut or elimination of payroll taxes’ is – FALSE.
In fact in FY 2020, Congress earmarked pet projects deemed ‘wasteful’ to the tune of $15.9 Billion.
Truth: How Congressional Legislation & Budging Works.
A president has NO Constitutional authority to change the federal budget signed into law, or order the Treasury to just print and send money.
ONLY Congress; and ONLY by way of legislation (a Bill), passing BOTH the House AND Senate, and then signed by a President can change the government’s budget.
“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”
— U.S. Constitution, Article I, Section 9, Clause 7. (Source: Heritage.org)
There are NO proposed cuts in Medicare or Social Security or any other entitlement.
Any cuts to payroll taxes does NOT mean government entitlement programs such as Medicare/ Medicaid or Social Security are somehow ‘automatically’ cut.
Thus, these media reports are nothing more than political tactics to scare elderly people into not voting for the current Administration.
It’s a Congress Problem.
Congress could step in any anytime and propose reasonable bills that will pass both the House and Senate for presidential review.
Congress does not need a thousand-page bill to address every problem in the world. They need focused bills that address just one, or a few key issues that have immediate value and importance to the People of the United States.
Bailing out for example, California, New York, Michigan and Illinois‘ decades of deficit spending on failed pet projects is not a concern for voters who don’t live in those states. And no state should be liable to pay for poorly managed budgets they had no say in the first place.
The solution in those high debt states is up to voters to change the government.
It reminds me of this saying a professor repeatedly said in a college class:
“If you always do what you’ve always done; you’ll always get what you’ve always gotten.”
As for the media, we can’t vote them in or out, but we can point out where they are misleading or flat out wrong.
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