Trump attempts to wrest tax and spending powers from Congress with new executive actions
The actions aim to temporarily extend unemployment aid and eviction protections
He also bemoaned how Democrats had refused to accept his demands during the recent negotiations, but attempted to brush it aside, saying four measures he signed Saturday “will take care of pretty much this entire situation.”
He mischaracterized the legal stature of the measures, referring to them as “bills.” Congress writes and passes bills, not the White House. The documents Trump signed on Saturday were a combination of memorandums and an executive order.
One of them aims to provide $400 in weekly unemployment aid for millions of Americans whose $600 in weekly benefits expired last month. Trump said 25 percent of this money would be paid by states, many of which are already dealing with major budget shortfalls and have pleaded with Congress for more aid.
Another of the documents attempts to defer payroll tax payments from September through December for people who earn less than $100,000. The impact of this measure could depend on whether companies decide to comply, as they could be responsible for withdrawing large amounts of money from their employees’ paychecks in a few months when the taxes are due.
The president said if he wins reelection he would seek to extend the deferral and somehow “terminate” the amount of taxes that are owed. The payroll tax funds Social Security and Medicare benefits, and it’s unclear what will happen to those programs without the money.
Two of the other executive actions are related to eviction protections and student loan relief.
As the economy started to deteriorate rapidly in March because of the coronavirus pandemic, Congress passed a $2 trillion law called the Cares Act. That law, among other things, provided $600 in enhanced weekly unemployment benefits through July, protected certain people from eviction through July, and gave student loan borrowers more flexibility through September. The White House and Democrats had spent the past two weeks working on a deal to extend those provisions, but talks collapsed on Friday.
Trump had tried to insist that Congress include a payroll tax cut as part of the talks, but Democrats and Republicans rejected the idea. Trump has sought repeatedly to cut payroll taxes, even before the pandemic hit, and on Saturday he took his first unilateral action related to the tax, attempting to defer collection of these taxes.
Trump signed the new documents during a press event in Bedminster, N.J. Democrats on Friday signaled they were still holding out hopes that talks with the White House could be revived.
Some experts have said the president has no legal basis to unilaterally extend unemployment benefits. The president on Saturday told reporters, “We have a lot of money that was unspent," referring to the Cares Act.
House Democrats in May passed a $3.4 trillion bill that they wanted to serve as the next economic relief measure, but it was rejected by the White House and Senate Republicans as too costly. Congressional Democrats in recent days had tried to seek a compromise, saying they were willing to cut $1 trillion off their stimulus package but that the White House’s negotiators rebuffed their overtures.
As the president acknowledged at his press conference, the executive orders leave unaddressed multiple critical needs. Bipartisan support had grown on Capitol Hill to provide hundreds of billions in additional funds to help schools safely reopen; for a second round of $1,200 stimulus payments; and a replenishing of funds for the Paycheck Protection Program, among other issues. Trump accused Democrats of blocking these programs from being funded, but he may face political blowback for failing to secure those initiatives in an election year.
Trump signed the orders two weeks after key parts of the $2 trillion Cares Act expired. The law passed in March with bipartisan support but the White House and Democrats were unable to reach agreement on legislation to deal with expiring provisions.
The Cares Act provided enhanced weekly unemployment benefits of $600 through July, as well as temporary eviction protections, which also expired in July.
Some experts have expressed confusion over the legality of a plan to unilaterally extend federal unemployment benefits. White House officials have studied using leftover money approved by Congress for use by the Federal Emergency Management Agency. But it is unclear if the administration can repurpose those funds for unemployment benefits without violating the Antideficiency Act, a federal budgeting law.
"States cannot pay unemployment insurance benefits in a way that has not been authorized by Congress through enactment of legislation," said Michele Evermore, an unemployment insurance expert at the National Employment Law Project. "By definition, states' administration of unemployment insurance must conform to federal law -- and there is no federal law on the books allowing for an additional sum,"
The executive orders also amount to at least a partial about face from Trump’s promises as a presidential candidate., when he panned executive orders. “We don’t want to continue to watch people signing executive orders because that was not what the Constitution and the brilliant designers of this incredible document had in mind,” Trump said in March 2016. “We need people that can make deals.”
House Democrats passed a $3.4 trillion bill in May that would have extended the $600 unemployment benefit through January, but the White House and Senate Republicans sought to change the formula for these benefits so that - in many cases - the benefit came to around $200 a week. They eventually changed their offer and told Democrats they would agree to around $400 a week in benefits. But those talks collapsed in part because of a broader disagreement about aid to states.
The unemployment rate in February was 3.5 percent, near historic lows, but it jumped to more than 14 percent in April when large parts of the country shut down because of the coronavirus pandemic. The unemployment rate in July was 10.2 percent, but more than 30 million Americans are still collecting jobless aid and many parts of the economy remain dislocated.
The White House and Congress approved roughly $3 trillion in emergency spending and tax cuts earlier this year in response to the coronavirus pandemic, but many Republicans have signaled in recent weeks that they are not comfortable with more spending.
The White House and Senate Republicans didn’t act for several months after the House Democrats passed their bill. Then, a few weeks ago, the White House and some Senate Republicans finally made their counteroffer - a $1 trillion measure that would offer another round of stimulus checks, more money for small businesses, schools, and a lower level of enhanced unemployment aid, among other things.
House Speaker Nancy Pelosi (D-Calif.) said last week Democrats had offered to lower their offer by $1 trillion, but Treasury Secretary Steven Mnuchin said a $2 trillion package was still too large.
