With Congress’ COVID-19 negotiations on hold, Trump issues executive orders to extend relief

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President Donald Trump’s end run around Congress on coronavirus relief is raising questions about whether it would give Americans the economic lifeline he claims and appears certain to face legal challenges. 

After negotiations with lawmakers on the next package of pandemic economic assistance hit a wall, Trump used what he said were the inherent powers of the presidency to forge ahead on tax and spending policy that Congress says it is granted by the Constitution.

Trump asserted he had the authority to defer payroll taxes and extend an expired unemployment benefit, although at a lower amount than what the jobless had been getting during the crisis. The president contended his orders “will take care of pretty much this entire situation, as we know it.”

But the orders appeared to carry less weight than Trump promoted and cut federal relief spending by shifting more onto the shoulders of struggling states. Critics said the actions crossed a legal line and fell well short of what is needed to help right the fragile economy.

The moves were framed by the White House as the president breaking through the Washington gridlock in order to directly distribute aid. Advisers hope it will sustain an economic recovery that Trump likely needs to defeat Democrat Joe Biden in November.

Trump took full credit for the measures, which he signed at his New Jersey golf club on Saturday after congressional talks broke down this past week. Democrats initially sought a $3.4 trillion package but said they lowered their demand to $2 trillion. Republicans had proposed a $1 trillion plan.

Trump accused Democrats of trying to spend more than was needed and adding money for priorities unrelated to the pandemic. He said local aid amounted to “bailout money” for states and cities “badly run by Democrats for many years. … And we’re not willing to do that.”

The president wants to continue paying a supplemental federal unemployment benefit for millions of Americans put out of work during the outbreak. But his order called for up to $400 payments each week, compared with the $600 that people had been receiving. Trump said states would cover 25% of this money even as many are dealing with major budget shortfalls.

Trump said earlier that the federal contribution would be redirected from disaster relief money at the Federal Emergency Management Agency — dollars not likely to last more than two months. Shifting FEMA disaster funds also would occur as the peak of hurricane season looms and the National Oceanic and Atmospheric Administration warns of an “extremely active” season already underway.

Treasury Secretary Steven Mnuchin said the $100 share from states would come from from an earlier pool of federal money and that Trump may waive the requirement about how it can be used.

Many states are already facing budget crunches caused by the pandemic. Asked at a news conference how many governors had signed on to participate, Trump answered: “If they don’t, they don’t. That’s up to them.”

Trump expressed a different view on Sunday night, following a day of state officials questioning how they could afford even $100 per person in additional weekly payments. He told reporters as he returned to Washington that states could make application to have the federal government provide all or part of the $400 payments. Decisions would be made state by state, he said.

Several state officials questioned how Trump’s initial proposal would work and often expressed doubt that they could afford to participate at the level Trump initially set without using federal funds.

Christina Stephens, a spokeswoman for Democratic Louisiana Gov. John Bel Edwards said: “Right now we are reviewing the President’s order to determine exactly what the impact to the state would be.”

Trump also acted to defer payment of the payroll tax, a long-pushed goal that had little support from either party on Capitol Hill, and federal student loans. His order on housing is not a guarantee against eviction, as he claimed, but instead directs the departments of the Treasury and Housing and Urban Development to identify money that could help those struggling to pay their monthly rent.

Trump said the employee portion of the payroll tax would be deferred from Aug. 1 through the end of the year, and he raised the possibility of making it permanent, though experts said he lacked that authority. The temporary deferral would not directly aid unemployed workers, who do not pay the tax when they are jobless. Employees would need to repay the federal government eventually without an act of Congress.

The president was silent on Saturday on how he would fund Medicare and Social Security benefits that the 7% tax on employee income covers. Democrats seized on the possible threat to Social Security as a signal that Trump wanted to cut the social safety net.

On Sunday night, in the wake of that criticism, Trump told reporters the money would not come from Social Security but from the Treasury if the government didn’t require workers to repay the taxes. Again, that would require congressional action.

“If the Democrats want to challenge us in court and hold up unemployment benefits to those hardworking Americans who are out of a job because of COVID, they’re going to have a lot of explaining to do,” Mnuchin said.

Both the White House and congressional Democrats indicated Sunday they wanted to resume negotiations, but no talks were scheduled.

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