Over the past two months, more than $500 billion has been spent to help small businesses across the country weather the COVID-19 pandemic. But, as of June 19th, taxpayers have very little idea where the money has gone because there was no requirement to list the names of recipients. And, now, Trump administration officials are refusing to release the names of recipients. This is unacceptable. There must be an accounting of all taxpayer money that’s been spent. We do know that four members of Congress received small business protection loans from taxpayers. Reps. Roger Williams (R-Tex.), Vicky Hartzler (R-Mo.), Susie Lee (D-Nev.), and Debbie Mucarsel-Powell (D-Fla.) received money for themselves or their spouses. Rep. Williams (no relation) owns a car dealership and is worth more than $20 million. Rep. Lee petitioned the Small Business Administration to make sure the gaming industry was eligible for loans. Guess which industry Rep. Lee’s husband works for? Yep, the gaming industry. Congress needs to pass transparency rules ASAP. Taxpayers deserve to know where the money is going, and no member of Congress (nor their family) should be eligible for funds.
Trillion Dollar Infrastructure Proposal Filled With Potholes
First of all, it is disturbing that we now measure pieces of legislation by trillions of dollars. That seems to be the new benchmark of spending by Congress and President Trump. For example, President Trump reportedly will be proposing a $1 trillion infrastructure plan. Business Insider reports, “Under the plan, most of the money will be earmarked for infrastructure work in roads and bridges meanwhile the rest of the funds will be devoted to building the US 5G network and improving internet services in rural areas of the country.” And even if President Trump’s plan isn’t implemented, there’s always the House Democrats’ $1.5 trillion infrastructure plan which is little more than a giveaway to special interest groups.
Here we go again. Taxpayers are already on the hook for more than $3 trillion in COVID-19 spending, so any additional spending must be done very carefully. But unfortunately, whenever infrastructure is being talked about, that means the potential for a flood of earmarks and unnecessary spending. Any future spending this year should go toward helping struggling families, businesses, and healthcare providers cope with the Coronavirus, not bolstering the bottom-lines of politically connected contractors.
According to preliminary reports, the Trump administration’s infrastructure proposal will include significant spending on 5G and internet connectivity. Instead of a “big government” taxpayer-funded approach to closing the digital divide, the Trump administration should be looking at regulatory reform and spectrum clearing to increase connectivity. Under the leadership of Federal Communications Commission (FCC) Chairman Ajit Pai, America is making a sustained, successful effort to decrease 5G deployment costs and streamline rules across the country to close the digital divide while protecting taxpayers. The agency has committed to spectrum clearing in record time, resolving to begin publicly auctioning off C-Band spectrum by the end of the year which will bring in tens of billions of dollars to the U.S. Treasury. Chairman Pai outlined this process this week before the Senate Appropriations Subcommittee on Financial Services and General Government and explained how taxpayers and consumers stand to benefit from this auction process. But this progress will be undone by a $1 trillion infrastructure boondoggle that will break the bank without hastening 5G deployment.
There’s no doubt that America’s infrastructure is in bad shape, and repairs across the country are sorely needed. To fix this, lawmakers and the Trump administration should continue streamlining regulatory approval processes and seek private dollars to invest in roads and bridges. A poorly targeted $1 trillion bill could result in thousands of earmarks instead of real infrastructure projects and sink American households further into debt, while setting back internet connectivity. The last thing that struggling families and businesses need right now is another trillion-dollar boondoggle.
401 (k) Flexibility is a Reality
It isn’t very often that I report good news coming out of Washington, D.C., but this week there is. The Department of Labor (DoL) has expanded the scope of permitted 401(k) investments which will give workers the flexibility they need to plan for their retirements. By giving savers access to private equity investments, the DoL is affording peace of mind to countless employees worried that their hard-earned dollars won’t be enough for retirement.
For decades, managers of traditional, “defined benefit” pension plans have been allowed to invest in private equity funds to increase returns for workers. While there’s no explicit legal prohibition on companies including private equity as part of a set of diverse investment options for their employees’ 401(k)s, previous lawsuits have placed a “chilling effect” on such behavior. That’s unfortunate, because over the past thirty years, equity-backed buyouts have netted average annual returns of more than 13 percent, compared to around 8 percent for broad-based indices such as the S&P 500. Traditional, defined-benefit pension plans have been permitted to invest in private equity, but, because of high costs unrelated to private equity, these plans have largely gone the way of the dodo. Defined-benefit plans promise workers fixed amounts of money upon retirement, regardless of how investments have fared. And low interest rates that have fueled economic expansion over the past couple of decades have made defined benefit promises unsustainable, resulting in companies phasing out these plans for more flexible defined contribution arrangements. Less than 5 percent of workers rely on traditional, defined pension plans, compared to around sixty percent forty years ago.
Defined contribution plans rose in popularity with account types such as 401(k)s allowing workers some flexibility in determining the investments right for them. But companies switching to defined contribution systems are being put in a no-win situation given the liability concerns of investing 401(k) dollars in private equity funds.
Fortunately, the DoL is easing legal concerns with new rules blessing 401(k) investments into private equity. Labor Secretary Eugene Scalia notes that the rule change, “will help Americans saving for retirement gain access to alternative investments that often provide strong returns.” Allowing workers access to private equity, “helps level the playing field for ordinary investors and is another step by the Department to ensure that ordinary people investing for retirement have the opportunities they need for a secure retirement.”
This move is just the latest step by the federal government to increase retirement account flexibility for workers struggling to adapt to a pandemic-plagued economy. Signed into law on March 27, the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act permits workers to temporarily withdraw their retirement account savings penalty-free to cope with unanticipated Coronavirus-related expenses.
By making these changes, Congress sent a powerful message that, despite strict ordinary regulations, retirement accounts ultimately belong to the workers contributing to them. And, this latest change to permit private equity investments strengthens that message and gives workers more options than ever to save for the future. The Trump administration and DoL deserve praise for giving Americans the freedom and flexibility they need during this difficult time.
Blogs:
Monday: L-Band Wireless Spectrum Myths Vs. Facts, Part II
Tuesday: Watchdog Slams Trump Administration for $1 Trillion Infrastructure Proposal
Wednesday: ‘Buy American’ Order Would Spell Disaster for Millions of Patients
Friday: Four-Part Series: Taxes and the Pandemic
Media:
June 1, 2020: The Detroit News (Detroit, Mich.) ran TPA’s op-ed, “States pleading for federal bailout are the most poorly managed.”
June 3, 2020: Truth in Accounting ran TPA’s op-ed, “States pleading for federal bailout are the most poorly managed.”
June 4, 2020: I appeared on WBOB Radio (600 AM and 101 FM; Jacksonville, Fla.) to talk about unemployment and a potential new fiscal relief package.
June 15, 2020: The Center Square ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: The Indiana Gazette (Indiana, Penn.) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: The Iroquois County Times-Republic (Watseka, Ill.) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: The Courier Tribune (Kearney, Mo.) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: The Watauga Democrat (Boone, N.C.) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: The Wilson Post (Wilson County, Tenn.) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: St. Joseph News-Press (St. Joseph, Mo.) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: International Falls Journal (International Falls, Minn.) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: The Citizen Tribune (Morristown, Tenn.) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: Wirepoints ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: The Mat-Su Frontiersman (Wasilla, Ak.) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: oddcrimes.com ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 15, 2020: WBFF (Fox, Baltimore) interviewed me about “Buy American” provisions.
June 15, 2020: The Banner-Press (Brenham, Tex.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 15, 2020: The Sierra Sun Times (Mariposa, Calif.) mentioned TPA in their story, “U.S. Senator Kamala D. Harris, Representatives Jackie Speier and Jamie Raskin Introduce Legislation Ensuring Protection for Those Who Expose Waste, Fraud, Abuse in Federal COVID-19 Relief Effort.”
June 15, 2020: The Washington Examiner ran TPA’s op-ed, “In the wake of George Floyd's killing, let's revisit government immunity.”
June 16, 2020: The News Gazette (Winchester, Ind.) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 16, 2020: The Salamanca Press (Salamanca, N.Y.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The National Law Review mentioned TPA in their article, “COVID Whistleblower Protection Act Would Provide Robust Protection for Disclosures About Pandemic-Related Appropriations.”
June 16, 2020: Townhall ran TPA’s op-ed, “Buy American' Order Would Spell Disaster for Millions of Patients.”
June 16, 2020: Townhall ran TPA’s op-ed, “New Postmaster General Must Deliver Postal Reform.”
June 16, 2020: The Daily Freeman (Tulsa, Okla.) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 16, 2020: cnweekly.com ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: Hiawatha World (Hiawatha, Kansas) ran TPA’s op-ed, “Some bureaucrats look to boost income tax to combat flagging revenue during pandemic.”
June 16, 2020: The Oneida Daily Dispatch (Oneida, N.Y.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Cheyenne Post (Cheyenne, Wy.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Tyler Morning Telegraph (Tyler, Tex.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Hendersonville Standard ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Pulaski Citizen (Pulaski, Tenn.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Iosoco County News-Herald (East Jawas, Mich.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: Grainger Today (Bean Station, Tex.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: DeltaNews (Greenville, Miss.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Daily American (Somerset, Penn.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: inForney (Forney, Tex.) ran TPA’s op-ed, ““Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Saratogan (Saratoga Springs, N.Y.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Center Square ran TPA’s op-ed, “Latest highway bill would derail America’s transportation system.”
June 16, 2020: KTVZ News 2 mentioned TPA in their story, “Wyden co-sponsors bills to protect COVID-19 funding abuse whistleblowers.”
June 16, 2020: The Center Square ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Indiana Gazette (Indiana, Penn.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Iroquois County Times-Republic (Watseka, Ill.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Courier Tribune (Kearney, Mo.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Watauga Democrat (Boone, N.C.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: The Wilson Post (Wilson County, Tenn.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: St. Joseph News-Press (St. Joseph, Mo.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 16, 2020: International Falls Journal (International Falls, Minn.) ran TPA’s op-ed, “Governments look to property taxes to make up for pandemic revenue shortfall.”
June 17, 2020: The Center Square ran TPA’s op-ed, “Lawmakers may take up misguided effort to boost sin taxes to make up revenue shortfall.”
June 18, 2020: The Olean Times Herald (Olean, N.Y.) ran TPA’s op-ed, “State and local governments apply different approaches to pandemic budgeting.”
June 18, 2020: The Indiana Gazette (Indiana, Penn.) ran TPA’s op-ed, “State and local governments apply different approaches to pandemic budgeting.”
June 18, 2020: The Iroquois County Times-Republic (Watseka, Ill.) ran TPA’s op-ed, “State and local governments apply different approaches to pandemic budgeting.”
June 18, 2020: The Courier Tribune (Kearney, Mo.) ran TPA’s op-ed, “State and local governments apply different approaches to pandemic budgeting.”
June 18, 2020: The Watauga Democrat (Boone, N.C.) ran TPA’s op-ed, “State and local governments apply different approaches to pandemic budgeting.”
June 18, 2020: The Wilson Post (Wilson County, Tenn.) ran TPA’s op-ed, “State and local governments apply different approaches to pandemic budgeting.”
June 18, 2020: St. Joseph News-Press (St. Joseph, Mo.) ran TPA’s op-ed, “State and local governments apply different approaches to pandemic budgeting.”
June 18, 2020: International Falls Journal (International Falls, Minn.) ran TPA’s op-ed, “State and local governments apply different approaches to pandemic budgeting.”
June 18, 2020: WBFF (Fox, Baltimore) interviewed me about transparency issues with the Paycheck Protection Program.
Have a great weekend, stay safe, and as always, thanks for your continued support.
Best,
David Williams
President
Taxpayers Protection Alliance
1401 K Street, NW
Suite 502
Washington, D.C. xxxxxx
www.protectingtaxpayers.org
