Trump replaces benefits, bypasses Congress
BEDMINSTER, N.J. — Seizing the power of his podium and his pen, President Donald Trump on Saturday bypassed the nation’s lawmakers as he claimed the authority to defer payroll taxes and replace an expired unemployment benefit with a lower amount after negotiations with Congress on a new coronavirus rescue package collapsed.
At his private country club in Bedminster, N.J., Mr. Trump signed executive orders to act where Congress hasn’t. Not only has the pandemic undermined the economy and upended American lives, but also it has imperiled the president’s November reelection.
Perhaps most crucially, Mr. Trump moved to continue paying a supplemental federal unemployment benefit for millions of Americans out of work during the outbreak. However, his order called for up to $400 payments each week, one-third less than the $600 people had been receiving. Congress allowed those higher payments to lapse on Aug. 1, and negotiations to extend them have been mired in partisan gridlock, with the White House and Democrats miles apart.
The executive orders could face legal challenges questioning the president’s authority to spend taxpayer dollars without the express approval of Congress. Mr. Trump largely stayed on the sidelines during the administration’s negotiations with congressional leaders, leaving the talks on his side to Chief of Staff Mark Meadows and Treasury Secretary Steve Mnuchin.
Mr. Trump’s embrace of executive actions to sidestep Congress runs in sharp contrast to his
criticism of former President Barack Obama’s use of executive orders on a more limited basis. And the president’s step-back from talks with Congress breaks with his self-assured negotiating skills.
“It’s $400 a week, and we’re doing it without the Democrats,” Mr. Trump said, asking states to cover 25% of the cost. Mr. Trump is seeking to set aside $44 billion in previously approved disaster aid to help states maintain supplemental pandemic jobless benefits, but Mr. Trump said it would be up to states to determine how much, if any of it, to fund, so the benefits could be smaller still.
Many states have been facing budget shortfalls due to the coronavirus pandemic and would have difficulty assuming the new obligation. The previous unemployment benefit was fully funded by Washington.
The president said Friday night “if Democrats continue to hold this critical relief hostage, I will act under my authority as president to get Americans the relief they need.”
Democrats had said they would lower their spending demands from $3.4 trillion to $2 trillion but said the White House needed to increase their offer. Republicans have proposed a $1 trillion plan.
White House aides have watched the talks break down with apprehension, fearful that failure to close a deal could further damage an economic recovery already showing signs of slowing down. Friday’s jobs report, though it beat expectations, was smaller than the past two months, in part because a resurgence of the virus has led to states rolling back their reopenings.
Mr. Trump said Saturday the orders “will take care of pretty much this entire situation, as we know it.” But they are far smaller in scope than congressional legislation, and even aides acknowledged they didn’t meet all needs.
“This is not a perfect answer; we’ll be the first ones to say that,” Mr. Meadows said Friday as talks broke down. “But it is all that we can do and all the president can do within the confines of his executive power, and we’re going to encourage him to do it.”
Mr. Trump said the employee portion of the payroll tax would be deferred from Aug. 1 through the end of the year. The move would not directly aid unemployed workers, who do not pay the tax when they are jobless, and employees will need to repay the federal government eventually without an act of Congress, where there is bipartisan opposition on Capitol Hill.
In essence, the deferral is an interest-free loan that would have to be repaid. Mr. Trump said he’ll try to get lawmakers to extend it, and the timing would line up with a post-election lame-duck session in which Congress will try to pass government funding bills.
“If I win, I may extend and terminate,” Mr. Trump said, repeating a longtime goal but remaining silent on how he’d fund the Medicare and Social Security benefits that the 7% tax on employee income covers. Employers also pay 7.65% of their payrolls into the funds.
Senate Majority Leader Mitch McConnell, R-Ky., issued a statement saying he supported Mr. Trump “exploring his options to get unemployment benefits and other relief to the people who need them the most.” Like Mr. Trump, Mr. McConnell accused Democrats of using the coronavirus package negotiations to pursue other goals.