From Day 1, Trump Hurting Many Who Voted for Him
Update: Following our original January article below, we have added subsequent actions taken by the Trump administration which have, or will, hurt many of his supporters. Here is a list of the actions we've included thus far:
January 2017 - Just hours after being sworn into office, and having promised in his inaugural address that "you will never be ignored again", Donald Trump signed a number of executive orders, one of which effectively increased mortgage costs for Americans with an FHA-backed home loan.
FHA-backed mortgages are designed to assist first-time and lower income borrowers who may not be able to qualify for a standard mortgage. On average, it is estimated that Mr. Trump's action will increase mortgage costs for these homeowners by $300-$500 per year.
(image from rare.us)
Here are the details: the outgoing Obama administration had issued guidelines to reduce the premium rate for mortgage insurance on FHA-backed home loans by .25% effective January 27. Mr. Trump's executive order reversed the Obama guidelines, thereby increasing the premiums these borrowers otherwise would have been paying.
The Trump action surprised many, as his transition team had talked mostly about issuing executive orders in the areas of health care, trade, and immigration.
This disregard on Mr. Trump's behalf for workers and the middle class is disappointing, but not really a surprise to us. But for those of you who fall into those economic categories and who voted for Mr. Trump, thinking his election would make your life better, we suggest you hang on tightly. It's going to be a bumpy ride.
Update: April 2017 - Also put on hold due to the Trump Administration's review of executive branch regulations are two proposed changes that, if allowed to proceed, would help lower- and middle-income Americans. These two Department of Labor (DOL) proposals are as follows:
Overtime Rules
In May of 2016, the DOL proposed a re-definition of which salaried workers qualify for overtime pay. As indicated in our Economics article, "Overtime Change Will Boost Middle Class Wages", this proposed change would raise from $23k to $43k the salaries that qualify for overtime pay. Between four and five million Americans are expected to be beneficiaries if these rules are allowed to proceed.
There are mixed signals, though, as to whether the Trump administration will give the go-ahead to implement this change. Most economists agree that the proposal not only will help many lower and middle class workers, but it also will help stimulate economic growth.
Much of the business community, however, opposes it and indications are that Mr. Trump also is personally opposed to it. Secretary of Labor nominee Alexander Acosta was non-committal on the issue during his Senate confirmation hearings, although he indicated some increase from $23k could be warranted.
(Acosta image from kcnonline.com)
Fiduciary Responsibilities
The second DOL change that would help workers and middle class Americans, but which currently is under review by the Trump administration, is a change largely opposed by Wall Street and, for some reason, by most Republicans. This change would require that retirement account financial advisors be legally and ethically bound by fiduciary standards.
What that means is that these advisors must put the interests of their clients ahead of those of the advisor and the advisor's firm. Practically speaking, it means that advisors must disclose all fees and commissions associated with any financial products they recommend and, if they recommend a higher cost product over a lower cost alternative, they need to explain why they are doing so. They also must describe any conflicts of interest that may exist between what they recommend and the benefits the advisor or the advisor's firm personally will receive if the client chooses that recommendation.
This DOL proposal would not seem to be a particularly controversial change but, rather, one that most Americans would agree will help protect the interests of the average financial consumer from shady business practices. In fact, many respectable financial firms already have or are in the process of implementing similar standards, so who are the Republicans trying to protect by opposing this proposal?
Update: Summer 2017 - The first Trump budget has been released and it is not friendly to large segments of Trump supporters:
Funding to Address Opioid Addiction & Deaths
"We will give people struggling with addiction the help they need." - Donald Trump, October 2016.
During last year's Presidential campaign, Mr. Trump drew praise from Democrats for his willingness to address the widespread problem of opioid dependency in rural America. This policy stance was particularly refreshing since this is an issue most conservative Republicans, unless their district is directly impacted, do not feel government should have a role in.
Along with what seemed to be his support for popular features of the Affordable Care Act and his campaign promise to disagree with the Tea Party Republicans on rolling back Social Security and Medicare, Mr. Trump's position on opioids led many traditional Democratic voters to think that Mr. Trump might be a different kind of Republican, one who actually cared about working people.
Unfortunately, as we've seen elsewhere, once in office Mr. Trump has been singing the traditional conservative Republican, Paul Ryan, etc. tune when it comes to government funding for problems large parts of the country are facing. The first Trump budget proposal not only substantially reduces Medicaid spending over the next 10 years (which provides treatment for many opioid users), it also reportedly slashes funding for the Office of National Drug Control Policy, the agency charged with addressing addiction issues such as the opioid epidemic.
Apparently this is just one more example of how Mr. Trump hopes to pay for his massive tax cuts for the well off by spreading it across the backs of everyone else.
Cutting Social Security Disability Insurance Benefits
As mentioned above, Mr. Trump was quite clear during the campaign that he would not cut Social Security benefits. Unfortunately, his first budget does just that, proposing a reduction of $64 billion in the Social Security Disability Insurance (SSDI) program. This program provides income to roughly 10.8 million disabled American workers and their dependents.
In a study done by TIME magazine, most beneficiaries of SSDI are residents of the rural and Rust Belt counties that supported Mr. Trump in the 2016 Presidential campaign.
Spokespersons for the administration conveniently claim that Mr. Trump's campaign promises only pertained to the retirement portion of Social Security, not to SSDI, but there is no record of Mr. Trump ever having made that distinction. It is unlikely that the many SSDI recipients who voted for Mr. Trump heard any such distinction either.
Update: August 2017 - Restaurant Workers' Tips
The Trump administration announced it is targeting another worker-friendly Obama-era Department of Labor (DOL) rule. In 2011, the DOL issued regulations indicating that all tips received by a waiter in a restaurant must go to that waiter. The National Restaurant Association had argued that if a waiter is being paid minimum wage, then the restaurant may collect those tips and do with them whatever the restaurant chooses: it may split the tips with other waiters, or with cooks and dishwashers, or it may keep the money for the restaurant itself.
The Obama DOL had argued that customers who leave a tip at a restaurant are doing so for the service provided by the waiter, it does not matter whether or not the waiter is being paid minimum wage; consequently, the waiter should be the recipient of the entire tip, not the restaurant. The Trump DOL disagrees.
Update: October 2017 - Birth Control Availability
The Trump administration indicated that it intends to roll back an Affordable Care Act (ACA) requirement that employer-provided health insurance cover a variety of birth control methods. Employers will now have an option to receive an exemption which will allow them not to cover birth control in their plan offerings, based on the employers' religious beliefs.
MSN Money reports in an October 7th online story that in 2013, the first year after the ACA's birth control benefit was instituted, women saved $1.8 billion on birth control pills alone. In the future, women who are covered by an employer's plan that is granted the birth control exemption will have to incur the cost of their birth control method on their own, thereby increasing the cost of their healthcare over what it currently is today.
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