Federal aid lapses as negotiations break down
What happened
Tens of millions of unemployed Americans were left in limbo this week, after negotiations over a congressional relief bill collapsed and several aid-focused executive actions by President Trump faced possible legal challenges and other obstacles. Trump signed the orders after two weeks of talks between Democratic leaders and administration officials sputtered out with no agreement on a bill to extend federal unemployment supplements that lapsed July 31. “Our differences are vast,” said House Speaker Nancy Pelosi, after she and Senate Minority Leader Charles Schumer reached an impasse with White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin. The Democrats’ starting point was a $3.4 trillion package that extended the $600 weekly supplements to the unemployed for six months; the administration backed a $1 trillion bill that cut the payments down to an initial $200 a week. The Democrats’ proposal also called for $915 billion in aid to state and local governments facing massive budget shortfalls, which Republicans opposed. Democrats said they’d compromise on a $2 trillion bill, a figure Meadows flatly rejected.
Trump’s executive actions would provide $300 in weekly unemployment supplements by siphoning dollars from the federal disaster relief fund. It would also temporarily suspend collection of payroll taxes. Initially, the plan required matching $100 state payments, a provision dropped after an outcry from cash-strapped governors. Critics questioned the legality of Trump’s orders, noted that he didn’t halt evictions, and warned that the jobless payments could take weeks to implement and that the fund would run out after five weeks. Pelosi called the measures “meager, weak, and unconstitutional,” but Senate Majority Leader Mitch McConnell praised Trump for acting. “Struggling
Americans need action now,” he said.
The July jobs report last week showed rehiring had dramatically slowed down from June, as a coronavirus surge forced many states to tighten restrictions again. Governors called on the warring sides to return to the bargaining table and hash out a bill including a new round of $1,200 stimulus payments and aid for businesses and schools. “They need to pull together,” said Ohio Republican Gov. Mike DeWine. But with Congress leaving Washington for August recess and Meadows also going on vacation, no new negotiations were scheduled.
What the editorials said
Congress’ failure to deliver a relief bill is “unconscionable,” said the Houston Chronicle. An estimated 32 million Americans are drawing unemployment, many displaced from jobs that “may never return.” While covering their rent and grocery bills, the federal payments boosted consumer spending, rescuing
What next?
the economy “from cratering to depths that could take decades to overcome.” Millions now face evictions; homelessness could reach Great Depression levels. It’s time to set partisanship aside and “show the American people that the government can actually get things done.”
Democrats’ demands are “unreasonable,” said NationalReview.com, but Trump’s actions are “an abuse of presidential authority.” His unilateral moves are an “end run” around the Constitution, which gives Congress sole power over spending. Republicans rightly objected when Obama overreached with his executive orders, and should object now to this “violation of our system.”
What the columnists said
Trump’s measures will “do little to deliver cash anytime soon” to Americans who need it, said Jim Tankersley in The New York Times. His use of disaster relief funds for unemployment payments “will almost certainly be challenged in court,” and Trump did nothing to help small businesses or state governments facing bankruptcy. He’s “making a political bet” that it’s better to make a show of helping the economy “than to have actually helped it.”
“Trump’s unilateral action was politically brilliant,” said Marc Thiessen in The Washington Post. Democrats thought they could use Americans’ wrath over lost aid to blackmail Republicans into swallowing another $3.4 trillion in wild deficit spending. “Now the political tables are turned.” Trump will get credit for extending the relief, and any lawsuits Democrats might bring to stop it would be political suicide.
“Renters across America are wading into unknown territory,” said Kriston Capps in Bloomberg.com. An estimated 27 percent of Americans missed rent or mortgage payments last month, according to a survey by the U.S. Census Bureau, and a third of renters said they had “little to no confidence” they could make their August payment. And that was before federal unemployment supplements lapsed. It’s “a stark measure of the ongoing economic devastation for households stretched to the brink” by the pandemic. “Millions of Americans will lose their apartments and homes” if the federal eviction ban isn’t extended, said Binyamin Appelbaum in The New York Times. During the 2008 recession, “massive dislocations shredded communities,” starving businesses of customers and cities of property tax revenue. This time “the dislocations could be worse.” In a recent policy memo, a group of housing policy experts and affordable housing advocates offered a dire prediction: “The United States may be facing the most severe housing crisis in its history.”
The “obscene” Republican resistance to extending unemployment insurance “isn’t just about a few billion dollars,” said Michael Tomasky in TheDaily Beast.com. “It reveals the rancid core of conservative free-market economics.” A mountain of new research refutes Republicans’ assertions that the payments discourage large numbers of workers from returning to their jobs. But Republicans’ moral “horror” that a handful of Americans “might be gaming the system” outweighs the genuine desperation of millions.
Buckle up: “We’re headed into a global depression,” said Ian Bremmer in Time.com. With unemployment numbers “dizzyingly high” and Covid-19 continuing its march across the U.S. and the globe, we face “a period of economic misery that few living people have experienced.” Even a vaccine “won’t flip a switch and bring the world back to normal.” Recovery will be slow, and come in “fits and starts.” A very difficult year lies ahead.