CAP Action Memo: Trump Makes Arizona’s Problems Worse, As Coronavirus Worsens and Unemployment Is at 8.9%

Washington, D.C. — Today, President Donald Trump will travel to Phoenix, following his unsuccessful weekend event in Tulsa, Oklahoma. There, he will address a group of students and will likely highlight his economic message. President Trump’s visit comes as the country faces the worst recession in nearly 100 years, a worsening COVID-19 crisis, and historic unemployment—including 8.9 percent unemployment in Arizona—all caused by his administration’s delayed and inadequate response to the outbreak. Meanwhile, Arizona just hit a new coronavirus hospitalization record, guaranteeing a prolonged public health and economic crisis, even as the president opposes further relief packages.

According to the National Bureau of Economic Research, the United States is officially in a recession brought about by the coronavirus crisis. The recession can be largely attributed to the Trump administration acting too slowly to contain the spread of the virus and not taking enough action to curb mass layoffs early on. Approximately 680,000 Arizonans, representing 18.9 percent of the state’s February labor force, have filed unemployment insurance claims since the beginning of March. For weeks, President Trump has attempted to pivot from this grim reality and has misled the public by repeatedly claiming that, prior to the pandemic, his administration had “built the greatest economy in the history of the world.” He even suggested that his administration would quickly rebuild the losses made by the devastating impact of the pandemic, saying, “I think it’s going to build fast. I think it’ll be a tremendous, tremendous comeback.” 

In reality, contrary to President Trump’s rosy economic message, few recessions have been rooted more directly in presidential decisions. Experts suggest that the economic recession from the coronavirus crisis will last for years to come; some estimates project a nationwide double-digit unemployment rate well into 2021.

President Trump has repeatedly touted what he has called “record low African-American unemployment.” However, Black unemployment, which was on a downward trajectory since the Obama administration, is now far above what it was when Trump came into office. Even beyond the current crisis, there are still persistent challenges in the Black-white unemployment gap that the Trump administration has failed to address. The unemployment rate for white Americans dropped by nearly 2 percent in May to 12.4 percent, while Black unemployment rose slightly to 16.8 percent over the same period. Latinos are also faring poorly under the Trump administration’s leadership: In May, the unemployment rate for those who identify as Hispanic or Latino was 17.6 percent—more than 5 percentage points higher than the white unemployment rate and higher than that of any other racial or ethnic group. 

Since the beginning of the pandemic, more than 45 million Americans have filed for unemployment benefits, and more than 21 million remain unemployed. The current unemployment rate of 13.3 percent is still significantly higher than it was at the peak of the Great Recession at 10 percent. 

In previous visits to Arizona, President Trump made sweeping promises to working families on kitchen-table issues such as health care and the economy, but in reality, the administration has led the country and Arizonans into a recession.  

Learn more about how the Trump administration’s policies and broken promises have hurt Arizona families below.

Health care

Promise: “Great health care for far less money. That’s going to happen.” – Donald Trump in Phoenix, March 19, 2016 

Reality: The Trump administration has doubled down on its commitment to taking health care away from millions of Americans while offering no viable replacement plan. Below are several ways Arizonans would be harmed if the administration fully repeals the Affordable Care Act (ACA):

  • 297,000 Arizonans would lose coverage, causing the state’s uninsured rate to increase by 39 percent.
  • 2.8 million Arizonans with preexisting conditions would face higher premiums or be barred from coverage altogether—a discriminatory practice that the ACA outlawed.
  • 915,000 Arizonans would face cost limits on employer-based coverage.
  • The state of Arizona would lose $2.1 billion in federal Medicaid funding, and demand for uncompensated care would increase by $823 million, straining hospitals.

Dreamers 

Promise: President Trump promised Dreamers: “We’re going to work something out that’s going to make people happy and proud. [Dreamers] got brought here at a very young age, they’ve worked here, they’ve gone to school here. Some were good students. Some have wonderful jobs.”  – Donald Trump, November 28, 2016

Reality: For years, including as president, Trump has vilified immigrants, portraying them as a burden on the nation’s economy and as a U.S. security threat. Trump’s businesses, however, have also relied on a large immigrant workforce to operate and have exploited the U.S. immigration system for his financial gain by paying undocumented workers lower wages. 

The Trump administration’s divisive rhetoric about immigrants flies in the face of reality. Immigrants are a vital part of the nation’s social fabric and its shared prosperity. Each year in Arizona, Dreamer households pay $285 million in federal taxes, pay $181 million in state and local taxes, and provide $1.5 billion in spending power to their communities. 

The Trump administration’s actions also show that he has no interest in protecting Dreamers. In September 2017, his administration tried to eliminate the Deferred Action for Childhood Arrivals program, or DACA, which gives Dreamers a means to stay in the country without fear of deportation. Last week, when the Supreme Court ruled 5-4 that the administration’s “arbitrary and capricious” decision was unconstitutional, Trump threw a temper tantrum, complaining that “the Supreme Court doesn’t like me” and vowing to take another swing at eliminating DACA.

Profits and wages 

Promise: “Jobs will leave from other countries and come into the United States…and our poorest citizens will get new jobs and higher pay.” – Donald Trump in Prescott Valley, Arizona, October 4, 2016

Reality: As wages have failed to keep pace with rising costs of living, 39 percent of Arizonans have a debt that has been sent to collections. Among these Arizonans, the average person has $6,200 in debt collections. 

Trump promised voters that he would prioritize the interests of the middle class. Instead, his administration is rewriting the rules to reward corporate interests and making it harder for working Americans to get ahead: 

  • The Trump-appointed director of the Consumer Financial Protection Bureau proposed rolling back restrictions on predatory payday lenders that require them to ensure borrowers can repay loans.
  • The Trump administration abandoned a rule designed to ensure that middle-class workers are properly compensated for working overtime, lowering the Obama-era income threshold so that fewer workers are covered. Under Trump’s proposed threshold, 151,000 Arizonans would lose overtime protections, costing them a projected $26 million in lost wages each year.
  • Under Trump, the U.S. Department of Labor weakened rules that required financial advisers to act in the best interests of their clients. Now, sophisticated investment advisers can effectively exploit consumers by offering conflicting financial advice, which is costing Arizona retirement savers an estimated $366 million per year.

Taxes

Promise: “We are going to cut taxes for middle-class families by hundreds of billions of dollars.” – Donald Trump in Phoenix, October 29, 2016

Reality: Trump promised to punish companies that moved U.S. factories to other countries. But the tax law he signed incentivizes companies to outsource jobs and keep profits overseas by creating new loopholes that reward companies for relocating operations and assets.

The tax breaks through the 2017 Tax Cuts and Jobs Act delivered $5 billion more in benefits to foreign investors than to the working- and middle-class families in every state that voted for Trump in 2016. This year, foreign investors are expected to gain $48 billion from the bill, while the bottom 99 percent of Arizonans will only receive $4.1 billion. The richest 1 percent of Arizonans will receive, on average, a tax cut of more than $45,000 this year, while the bottom 80 percent will receive an average tax cut of less than $700.

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