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the economy

Congress Vacations Leaving Pandemic Unemployed with Nothing

Senate Republicans would have none of the Democrats' plan to resume the $600 a week supplement to states' unemployment insurance, partly because It was part of the scary $3 trillion bill the House had passed two and a half months ago. That would be on top of $2 trillion passed in the now distant month of March. The payments ended July 31 and off Congress went on its August vacation.

The one-size-fits-all $600 of the Cares Act blew past any fine tuning for the sake of getting money into people's pockets as fast as possible. That, added to highly varied amounts paid by state unemployment insurance programs, resulted in many workers making more per

week than before the pandemic. Republicans are against perpetuating that is any new bill. They contain that overpayment causes those workers not to return to their jobs or find other work, hobbling the Republican goal to restart the economy.

That illogic makes one wonder who it is we send to Congress. First, what jobs would they be turning down. There are only some 5 million job openings for about 30 million who are now on the unemployment compensation rolls. But even if there was an opening for every one of them, what worker would refuse to return to an ostensibly steady job in favor of the iffy $600 subsidy that would leave him or her unemployed and without an income when it stops — which it already did July 31, and will eventually end again if renewed. Many of those jobs have employer-paid health insurance and retirement plans which the worker would be walking away from. Republicans in Congress evidently think very little of the American worker's intelligence.

The state payments run out as well, most after 26 weeks, and some states, mostly in the South, don't care at all about their workers: North Carolina and Florida pay unemployment for only 12 weeks, Georgia for 14. Some states halt payments when an employer tells them a worker has refused work, unless for health problems, even if the pay offered is poverty level.

To make sure no one turns down a job, Republicans, as represented in negotiations by Treasury Secretary Steve Mnuchin, have proposed $200-a-week until that can be replaced by their preferred idea of paying everyone 70% of what they had been making before let go. There is no progression in a single percentage applied to all; it means those already low-paid would be hurt the most. From the unform payment that got money out the door speedily, this plan goes to the other extreme of fine-tuning at the individual level of tens of millions of people. Fifty states, each with different unemployment formulae, would have to re-code their systems, many still running software on ancient mainframes that was written in the 1960's COBOL language. Old-timers could name their price to be lured from retirement to dust off that code. This could take months. The need is now.

buying votes

With negotiations stalled and Congress's August vacation of much greater import, enter Donald Trump and his executive order pen. Overlooking where the money would come from — it is Congress that decides on appropriation — he settled on $400-a-week relief for those who lost employment. But there's a catch. The states would have to pony up $100 of the $400 for the government to come up with its $300, like a charity angel's pledge of a matching grant. Once again, inattention to how things work. Fifty state legislatures would have to approve those outlays. Some to many would have to refuse for lack of funds; states can't print money. That would leave workers in those states with nothing if the federal government stayed with the Trump rule.

Trump has no access to funds for his proposal. It is Congress that decides on appropriations. There's mention of his illegally directing monies approved for other purposes by Congress — taking from the Federal Emergency Management Agency (FEMA) has been mentioned in the van of what is expected to be an unusually active hurricane season.

The president also seems to have succumbed to the hectoring by economist Stephen Moore, whose obsession is a payroll tax cut which he says is the "best pro-growth idea". In a Wall Street Journal op-ed, Moore unabashedly promoted the giveaway as a scheme for Trump to win the election. Trump announced a "payroll tax holiday" beginning September 1st that defers the 7.65% paycheck deduction for workers earning less than $100,000 a year (and the same percentage co-paid by employers). Lawmakers on both sides of the aisle disapprove. Payroll taxes fund Social Security and Medicare which both face empty coffers no far in the future. But it is senseless for helping people who don't need it, those who have paying jobs; it does nothing for those out of work who are in greatest need.

Trump made it obvious that this is a cynical vote-buying scheme, saying, "If I'm victorious on Nov. 3, I plan to forgive these taxes and make permanent cuts to the payroll tax". That he cannot do. He can defer tax deductions for up to a year, but only Congress has the power to cut the payroll tax or make the deferrals permanent. But this tells us that, whereas in the 2016 campaign he pledged not to go near entitlements, now he wouldn't hesitate to cripple their funding and consequently their benefit schedules.

He also enjoyed sacrificing government revenue for its added bonus of putting Joe Biden and his since-announced running mate Kamala Harris in an awkward position: "So they will have the option of raising everybody's taxes and taking this away". They would also have be the ones to debit employees and employers to recover the deferred and unpaid taxes if Congress doesn't sanctify this president's usurpation of their Constitutional power by waiving the bygone tax.

Trump is infamous for leaving his bills unpaid.

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