With no deal on a new coronavirus relief package in sight, President Donald Trump signed four executive actions Saturday afternoon that include a $400-per-week boost to unemployment benefits and a payroll tax cut in an attempt to provide Americans some economic help.
His legal ability to do so, however, remains unclear, and legal challenges are all but guaranteed. Trump has directed money to be allocated from the Department of Homeland Security’s Disaster Relief Fund, saying it holds about $70 billion in emergency assistance.
Trump appeared optimistic about the threat of a lawsuit over his executive power, telling reporters gathered at his New Jersey golf club, “If we get sued, it’s somebody that doesn’t want people to get money. And that’s not going to be a very popular thing.”
Under the president’s memorandum, states would be required to pay 25% of the additional unemployment benefits ― at a time when states are already straining their budgets as they fight a virus outbreak that is still raging across many parts of the country. It’s not clear how quickly states would be able to implement the new policy, which calls for them to coordinate with multiple federal agencies on setting up an entirely new “lost wages assistance program.” State workforce agencies have struggled this year just to pay federal benefits through their regular unemployment systems.
Legislation that allowed Americans an extra $600 per week in unemployment benefits, enacted by Congress earlier this year, was allowed to expire last week. Negotiations between Republicans and Democrats on a fresh relief package have been stalled for days, with the Republican caucus resisting Democrats’ push for legislation that would continue the $600 payments.
Asked why he settled on $400, Trump said the lesser amount gives people “a great incentive to go back to work.”
If he gets his way, Trump’s “payroll tax holiday” ― an unpopular proposal on both sides of the aisle ― will apply to people making less than $100,000 per year and begin Sept. 1, lasting through the end of the year. But critics argue that cutting the payroll tax would hurt Social Security and Medicare as the struggling pandemic economy has forced Americans to rely more heavily on both programs.
The cuts would “weaken those two bedrock retirement and health programs,” a group of economists at the Center for American Progress, a liberal think tank, said in a statement earlier this week. Since the start of the crisis, Trump has repeatedly spoken in favor of the move. But the economists argued that employers are incentivized to hold onto their employees’ share of the tax, rather than passing it on, because they are ultimately responsible for making sure payroll taxes go to the government.
“Thus, postponing the deadline to pay payroll taxes would likely have no effect on employees,” they said. “Employers could simply withhold the tax and keep the money until the later payment deadline.”
Trump’s other economic stimulus measures include cuts to student loan interest rates and eviction protections through the rest of 2020 that encourage states to find ways to allow financially struggling Americans to say in their homes.
An estimated 30 million to 40 million people face the threat of eviction this year because of the coronavirus crisis, according to a report released Friday by the National Low Income Housing Coalition. Families with children would be particularly hard hit, the group said.
While the unemployment rate is down to 10.2% from its April peak of 14.7%, it is still much higher than its February level of 3.5%.
In his announcement on Saturday, Trump said he would extend many of the benefits into the new year if reelected in November, adding that he is also considering other tax cuts.
The president appeared to scoff at the idea of providing additional relief to the states, though, arguing that it was partisan instead of practical.
“What they really want is bailout money for states that are run by Democrat governors and mayors,” Trump said of his political rivals.
At another point, he accused the Democrats of trying to interfere in the 2020 election by arguing to include in the next bill measures to discourage voter suppression, such as voter ID laws.
“They want to try to steal this election,” Trump said without evidence.
He exited the press conference prematurely when pressed on a claim that he passed Veterans Choice, a piece of legislation passed under the Obama administration in 2014.
In a statement Saturday, Democratic leadership denounced Trump’s executive orders as “unworkable, weak and narrow.”
“Democrats repeat our call to Republicans to return to the table, meet us halfway and work together to deliver immediate relief to the American people,” House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer wrote in their joint statement. “Lives are being lost, and time is of the essence.”
Hayley Miller contributed reporting.
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