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$2 TRILLION OF YOUR TAX MONEY
American Middle Class

DEMOCRATS AND REPUBLICANS DIFFER ON HOW $2 TRILLION OF YOUR TAX MONEY SHOULD BE SPENT

  • The Republican majority senate did not get the 60 votes they needed on the procedural vote to advance massive stimulus package to offset the economic impact of the coronavirus pandemic.

  • Democrats wanted loans to be guaranteed to small businesses and direct cash payments to Americans and accountability for multi-national corporations that will get government money.

  • Republicans support most to measures that the Democrat support, but they don’t want to attach as many strings as Democrats wish to attach to corporation bailouts.

  • Visit the Financial Middle-Class homepage for more stories

The Republican majority senate did not get the 60 votes they needed on the procedural vote to advance massive stimulus package to offset the economic impact of the coronavirus pandemic.

What Do Democrats Want?

Democrats wanted loans to be guaranteed to small businesses and direct cash payments to Americans and accountability for multi-national corporations that will get government money.  They don’t want corporations to take taxpayer money and give out big bonuses to their executive or resume their stock buyback activities.

To prevent a U.S. economy depression, Congress passed, and President George W. Bush signed the Economic Stimulus Act of 2008, which pumped hundreds of billions of dollars into the economy.  The Obama Administration continued massive spending. Corporations such as American Internal Group (AIG), Goldman Sachs Group, and JP Morgan Chase took close to $50 billion from the U.S. government and paid excessive bonuses to their executives.

Moreover, in 2017, Congress passed, and President Trump signed the Tax Cuts and Jobs Act, which reduced the top corporate income tax rate from 35 percent to 21 percent. Trump and his Republican allies who advocated for the corporate tax cut then said that it would allow corporations to hire more and increase wages and business investment.  Instead, corporations spent $1.4 trillion, repurchasing their shares over the past three years alone.  Stock buybacks don’t stimulate the economy.

Democrats are not wrong for wanting to have strings attached to this bailout.

What Do Republicans Want?

Republicans want to do whatever they can to avert a recession. They want the stimulus package to be as massive as possible—fiscal responsibility paused.

Republicans support most to measures that the Democrat support, but they don’t want to attach as many strings as Democrats wish to attach to corporation bailouts.

The Bottom Line

The bottom line is that the Trump Administration will have to spend while millions of Americans are either out of work or furloughed to avoid the economy from going on a cliff.  Democrats and Republicans have to find common grounds.  Few corporations that will get taxpayer money will certainly misallocate the funds, but that alone is not a substantial reason for halting the stimulus package.

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