Once it became obvious that the coronavirus crisis would take a severe toll on the U.S. economy, Congress and the White House approved a series of measures intended to cushion the effects of the recession. They were, however, temporary fixes — including expanded unemployment insurance that expires at the end of this month.
The House’s Democratic majority, eager to stay ahead of the problem, approved an ambitious, $3 trillion package in May called the HEROES Act — the Health and Economic Recovery Omnibus Emergency Solutions Act — which included funding for, among other things, struggling state and local governments.
The expectation was that Republicans would soon follow with a plan of their own, and negotiations toward a compromise package would take shape. What actually happened, however, was GOP officials rejected the Democratic approach and responded with … passivity.
Bloomberg News reported yesterday that Republican leaders are still kicking around ideas — the party has not yet finalized anything resembling a plan — and aren’t yet prepared to begin talks with Democrats. Little progress is expected this week, and senators won’t return to work until next week.
With time running out, the good news is that National Economic Council Director Larry Kudlow told the Fox Business Network yesterday that the White House’s plan is taking shape. The bad news is, that plan is difficult to take seriously.
Kudlow … outlined elements of a future aid package that the White House has pushed for weeks. Those include a payroll tax holiday on workers’ wages and a “capital gains holiday,” which would defer payment of capital gains taxes on new asset purchases, possibly for several years.
The problems with these ideas haven’t changed: a payroll tax break is unlikely to have much of an effect given the current economic circumstances, and a “capital gains holiday” is little more than a tax break for wealthy investors who don’t need the help right now.
Or put another way, with double-digit unemployment, Team Trump’s principal goal appears to be approving yet another tax break for the rich, which would complement the tax break for the rich Republicans approved in late 2017.








