Trump Signed 26 Executive Orders on Day 1: Here’s How 2 Could Impact the Middle Class
Written by
Kerra Bolton
Edited by
Amber Barkley
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President Donald Trump wasted no time putting campaign promises into practice as he issued a series of executive orders ranging from freezing federal government hires to reshaping immigration policy. These policies could significantly affect middle-class incomes, particularly through paying more for everyday items, delayed tax refunds and possible labor shortages.
While the Trump administration said these measures would boost the U.S. economy, reduce government waste and protect the country’s borders, the economic effects remain uncertain. In addition, some policies may shift in the coming weeks, as outside factors like legal challenges and economic realities take shape.
Trump signed 26 executive orders on his first day. Here’s how two could significantly impact the middle class.
Freezing the Hiring of IRS Agents
One Trump’s initial actions during his second term was halting the hiring of new Internal Revenue Service employees, among other federal employees.
According to the president’s executive order, the hiring freeze will last until the secretary of the treasury, the director of office of management and budget, and the administrator of United States Digital Service decide it is “in the national interest to life the freeze.”
“Freezing IRS hiring might reduce audit rates, but tax compliance remains crucial by taxpayers,” said Christopher Stroup, CEO and founder at Silicon Beach Financial. “You should keep thorough records, file on time and consult a tax professional for any items that require additional attention.”
Writing for Newsweek, Suzanne Blake reported, “The freeze has raised concerns that this could cause delays in receiving tax funds.”
Blake wrote, “Because of the freeze, the agency could face staffing shortages and lower customer service capabilities, potentially affecting the timing of tax refunds.” She also pointed out that those who file their tax returns later could wait longer for their refunds.
With many middle-class taxpayers relying on their tax refunds for to cover expenses, debts and savings goals, this possible delay could also delay their ability to address financial needs and goals.
However, Wayne Winegarden, an economist at the Pacific Research Institute, said the IRS hiring freeze must be put in perspective. In 2017, there were an estimated 73,000 IRS employees, and as of last year, there were over 100,000 — a level that hadn’t been reached since 1997.
“The right question is, ‘How can we generate more efficiencies at the agency?'” Winegarden said. “The other question is, ‘How can Congress simplify the tax code to make it easier for taxpayers to stay compliant?'”
Winegarden said improving efficiencies and simplifying the tax code is “the best way to ensure compliance while promoting stronger economic growth and improving the after-tax incomes for most families.”
Securing National Borders
Citing threats from cartels, criminal gangs, terrorists, human traffickers and others, Trump also declared a national emergency at the southern border. His executive order directed the Department of Defense and the Armed Forces to deploy troops and resources to secure the border, including deporting and detaining undocumented individuals.
However, according to data from the nonpartisan Economic Policy Institute (EPI), undocumented individuals accounted for over one-third of each of the nation’s landscaping, farming and construction industries.
“It is crystal clear that immigration expands U.S. gross domestic product and is good for growth,” EPI researchers wrote. “And immigration overall has led to better, not worse, wages and work opportunities for U.S.-born workers.”
While it’s uncertain what effects this order will have long-term, it’s possible it will damage the economy more than help, which could drive up costs and stretch middle-class budgets further.
More Recent: Imposing Tariffs
Trump initially proposed 25% tariffs on imports from Canada and Mexico, but those were quickly paused. On Feb. 10, however, he signed an executive order implementing a flat 25% tariff on global steel and aluminum imports, “without exceptions or exemptions.” While this order was not signed on his first day in office, discussions were certainly in motion then.
According to Reuters, when reporters asked Trump whether he had concerns about sparking a trade war, he said, “I don’t mind.”
While the tariff increase is aimed at boosting American industry, it could also mean paying more for everyday products that use steel and aluminum — from cars and laptops to beverage cans — CBS News reported.
“Tariffs are taxes,” said Winegarden. “The higher the tariff, the higher the tax. It is essential for middle-class families to understand that the imposition of tariffs will raise the prices of products. When imposed on products like steel, those prices will be large and pervasive.”
He explained, “Tariffs make the cost of living less affordable and will worsen the standard of living. Managing budgets and finding areas to save will become essential for many families who are just getting by today without the tariffs.”
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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