The Congressional Budget Office (CBO), a nonpartisan watchdog group, offered high praise for the Trump administration on Tuesday, saying under its guidance, federal agencies delivered coronavirus aid “incredibly quickly,” preventing catastrophic effects to the economy during the COVID-19 crisis.
CBO Director Phillip L. Swagel said Capitol Hill moved speedily to approve aid for businesses and more than 100 million Americans, which was swiftly approved by President Trump. Then the Treasury Department moved “quickly and effectively” to process stimulus payments to Americans and business owners, the CBO said.
Swagel worked in the Obama administration during the 2008 financial crisis, when Congress also approved several economic stimulus packages. The CBO director said that aid went out quickly back then, but this time the response was even faster.
“The IRS and those other agencies deserve a lot of credit,” he said in a virtual forum sponsored by the Peter G. Peterson Foundation.
The CBO’s praise differs greatly from reports from the mainstream media and Democrats that the Trump administration was not up to the task and that federal agencies could not handle the demand to stem damage from the pandemic.
Under a bill passed by Congress, individuals were eligible for payments of up to $1,200, but that amount declined for those with an adjusted gross income higher than $75,000 a year. The $1,200 payment dropped by 5% of every dollar above $75,000, or $50 for every $1,000. The benefit didn’t apply for individuals with incomes over $99,000.
The payments were processed quickly. Married couples with combined incomes of up to $150,000 received $2,400, subject to the same phaseout that applied to individuals. The payments were phased out entirely for couples making $198,000 or more. Families also got $500 per dependent child under the age of 16.
About 120 million U.S. taxpayers qualified for direct payments from the federal government under the bill, according to an analysis by one think tank.
Swagel also laid out the dramatic rise of the 2020 federal budget deficit as Congress passed $3 trillion in aid, $2 trillion of which has already been spent. But he said the problems are only short term.
“The fiscal steps taken so far have not greatly increased the burden on the Treasury of funding our debt,” he said. The CBO is projecting gross domestic product (GDP) will be $3.9 trillion lower in 2020 and 2021 than the agency had predicted in January, just before the coronavirus began sweeping across the U.S.
But a full comeback will take a while, Swagel said.
“The experience of recent downturns has been the recovery is prolonged,” he said. “We have it taking years to get back.”
On June 5, the U.S. unemployment rate shocked economists on Wall Street, dropping to 13.3% for the month of May.
Dow Jones experts had predicted the rate would soar to 19.5% with another 8 million jobs lost, but the economists weren’t even close. The economy actually created more than 2.5 million jobs in May, the Labor Department reported.
The May gain was by far the biggest one-month jobs gain in U.S. history since at least 1939.
“It is a stunner by any stretch of the imagination!” President Trump wrote on Twitter. “It’s a stupendous number. It’s joyous, let’s call it like it is. The Market was right. It’s stunning!”
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