New White House pitch: tax cuts for rich, odd advice for jobless

With time running out on economic aid, Republicans are starting to work on a possible plan. It's apparently going to emphasize tax breaks for the rich.
Image: White House economic adviser Larry Kudlow speaks about coronavirus the White House in Washington
White House economic adviser Larry Kudlow speaks about coronavirus at the White House on Feb. 28, 2020.Kevin Lamarque / Reuters
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By Steve Benen

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.

And what about those who are struggling most? The White House and GOP leaders remain opposed to enhanced UI -- or more specifically, the $600 per week Democrats fought for in the original CARES Act -- though Kudlow added yesterday the administration may support a "return-to-work-type bonus of a modest nature."

It's against this backdrop that the White House is launching a new ad campaign, apparently targeting the unemployed. The Associated Press reported this morning that a new White House-backed ad campaign "aims to encourage people who are unemployed or unhappy in their jobs or careers to go out and 'find something new.'"

The Trump administration has long emphasized skills-based job and vocational training as an alternative to two- or four-year college degree programs, arguing that college isn’t for everyone and that many jobs don’t require a degree. But the long-in-the-works effort has taken on a new sense of urgency after the coronavirus outbreak cost millions of people their jobs, many of which may be lost forever.

The AP added that the "find something new" campaign is a product of the White House’s American Workforce Policy Advisory Board, which is led in part by Ivanka Trump.

With tens of millions of Americans being laid off in recent months, and an election right around the corner, I'm not entirely sure "find something new" is the message the White House wants to promote right now, but Team Trump is apparently going with it anyway.