What's Trump's plan to improve the economy, provide stimulus and lower unemployment?
With Election Day just around the corner, we take a look at the President's policies as America begins to recover from the economic fallout of covid-19.
For President Donald Trump, whose 2016 campaign was built on his reputation as a successful businessman, the economy was always going to be one of the most scrutinised areas of his presidency. For the first three years the President could point to solid job growth with an extra 6.6 million jobs created, but the economic consequences of the coronavirus pandemic saw around 15% of all American jobs wiped out in just two months.
Going into the election, Trump has the worst job loss record of any president with only half of those lost due to covid-19 replaced so far. Recent revelations about his tax payments, or lack of, during his decades as a private businessman may also have taken some of the sheen off his public image.
In short, Trump is under pressure to prove that he is the man to bring back jobs and boost the US’s bruised economy, but what does the President have planned for the next four years?
How is Donald Trump going to restart the economy?
As was the case four years ago Trump is eager to make the economy the focus of the election and, after a tricky few months, today’s news may give him the ammunition he needs. The Commerce Department reported a 33.1% rise in the US GDP during the last quarter, smashing the previous record but still leaving the economy in a far worse position than the beginning of the year.
The reduction of the trade deficit was a big part of his plan in 2016 and that continues this year. He has promised to cut taxes for Americans to boost their take-home pay and to expand ‘opportunity zones’: economically distressed areas that benefit from a more generous tax rate to encourage investment. The President has not been forthcoming on the specifics but his administration are known to have been discussing ‘Tax Cuts 2.0’ since 2018, with some talk of lowering the marginal income tax rate from 22% to 15%.
What are the President’s plans for the next stimulus bill?
Trump is a difficult man to pin down when it comes to understanding his position on a subject, none more so than on his hopes for the next stimulus package. Talks between his negotiator Edward Mnuchin and Peaker of the House Nancy Pelosi appeared to have ended in September when the President tweeted that he was ending talks because the Democrats were asking for too much in federal resources.
Yet within a week he announced that he was willing to negotiate, and then that he was willing to far exceed his original offer, and finally that he wanted a package even bigger than the $2 trillion package that the Democrats were offering. How much of this is pre-election point-winning and how much is likely to make it into law during a second term is, frankly, anyone's guess.
On Tuesday he told White House reporters: “After the election we'll get the best stimulus package you've ever seen.” However if Trump were to secure an Election Day win the Republicans would likely also retain the Senate, so any hopes of a massive new bill seem unlikely. Leader of the Senate Mitch McConnell has so far refused to go above the $500 billion ‘skinny’ bill floated in recent weeks.
The reality would therefore be somewhere between Trump’s claims and the Republican Senate’s offer. The President is eager to include a second round of stimulus checks but the GOP’s ideological aversion to government spending should prevent anything like the CARES Act being passed in future.
How will Donald Trump address unemployment?
The employment gains that Trump presided over during the first three years of his presidency have been wiped out and he is the first President since Herbert Hoover to end a term with higher levels of unemployment than he started with. However the signs do suggest that the economy is rebounding and Trump will want to build on that growth over the next four years to bring unemployment back under control.
Trump would like to see a $1 trillion infrastructure bill signed to help spur job creation and set aside funding to develop roads, bridges, 5G wireless and rural broadband. The President has also spoken publically about a scheme that would see the government purchase years’ worth of airline tickets at a discounted price to provide a cash injection and produce more jobs.
Trump has also looked to boost US employment by bringing previously outsourced jobs back into the country. He has spoken about his desire to bring a million manufacturing jobs back from China and has called for an end to federal contracts for companies who employ overseas workers. In May and June of this year he stopped issuing new green cards to prevent new labour entering the market. A second term would likely include similar ‘America First’ policies in an attempt to stimulate home-grown enterprise.