The House and Senate are on State / district work breaks until after Labor Day which is September 7 this year. On Friday the President issued three executive memoranda on 1) Student loan payment relief, (2) assistance to renters and homeowners, (3) deferring payroll tax obligations and one executive order on additional unemployment assistance. All of the actions are related to the COVID-19 emergency. The Wall Street Journal discusses what’s in and not in these executive actions. Legal beagle details on the actions can be found at the Volokh Conspiracy blog. Congress can change these actions at its discretion by enacting a law.
The Wall Street Journal article explains that
Mr. Trump directed the Treasury Department to defer the 6.2% Social Security tax on wages for employees making less than about $100,000 a year. That suspension would last from Sept. 1 through Dec. 31. If employers stop withholding those taxes, the move would deliver an increase in take-home pay just as Mr. Trump is running for re-election but also create a looming liability in 2021 because the taxes would still be due eventually. Mr. Trump said he would press Congress to turn the deferral into an actual tax cut.
The FEHBlog was wrong about Congress and the White House reaching a compromise on a new COVID-19 relief bill before the August recess. He was also wrong in expecting the Senate to approve the OPM Inspector General nomination before the August recess. Consequently, at this time, the FEHBlog does not plan to bet real dollars “on the come” against future Congressional action approving the tax cut. Let Congress act first.
It is worth noting that this is the traditional week in which FEHB benefit and rate negotiations conclude. Historically (by which the FEHBlog means a long time ago), OPM would announce the next year’s government contribution change shortly after Labor Day. For the past decade, that announcement has not been made until much later in September. But things are moving along.
If you have a spare hour, listen to this past week’s EconTalk episode in which “John Kay and Mervyn King talk about their book, Radical Uncertainty, with EconTalk host Russ Roberts. This is a wide-ranging discussion based on the book looking at rationality, decision-making under uncertainty, and the economists’ view of the world.” The three economists have useful perspectives on the application of statistical modeling to the COVID-19 emergency. (If you have a spare 15 minutes you can read the transcript (lower right hand side of the website, and in fairness although I read a lot of the books that are discussed on EconTalk, I won’t read this one because I don’t have a Ph.D in economics. If you want a fascinating book to read check out A.J. Baime’s recent book on the 1948 U.S. Presidential election. The FEHBlog by the way is a big admirer of Harry Truman.)