TRUMP ORDERS STIMULUS FOR ECONOMY
Orders seen as attempt to wrest tax and spending powers from Congress
President issues tax and spending directives, measures that Democrats say usurp congressional powers.
WASHINGTON — President Donald Trump on Saturday attempted to bypass Congress and make dramatic changes to tax and spending policy, signing executive actions that challenge the scope of powers between the White House and Capitol Hill.
At a press event in Bedminster, New Jersey, Trump said the actions would provide economic relief to millions of Americans by deferring taxes and providing temporary unemployment benefits. The measures would also, however, attempt to wrestle away some of Congress’s most fundamental, constitutionally mandated powers: tax and spending policy. Trump acknowledged some of the actions could be challenged in court, but he predicted he would persevere.
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.
Executive actions
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% 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. The federal contribution would be redirected from money at the Federal Emergency Management Agency.
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.
McConnell supportive
Senate Majority Leader Mitch McConnell, R-Ky., who mostly stayed out of the recent negotiations between the White House and Democrats, praised Trump’s move.
“Struggling Americans need action now,” he said in a statement. “Since Democrats have sabotaged backroom talks with absurd demands that would not help working people, I support President Trump exploring his options to get unemployed benefits and other relief to the people who need them the most.”
Democrats attacked Trump’s actions.
“This scheme is a classic Trump con: play-acting at leadership while robbing families of the support they need,” Sen. Ron Wyden, D-Ore., wrote on Twitter. “This ‘plan’ fails to reinstate supercharged unemployment, and would throw already overburdened state programs into chaos, making it harder to get benefits out the door.”
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.
Questions on legality
Some experts have expressed skepticism about 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.”