President Donald Trump’s end run around Congress on coronavirus relief is raising questions about whether it would give Americans the economic lifeline he claims and appears certain to face legal challenges. Democrats called it a pre-election ploy that would burden cash-strapped states.
"When you look at those executive orders ... the kindest thing I could say is he doesn’t know what he’s talking about or something's wrong there,” House Speaker Nancy Pelosi said. “To characterize them as even accomplishing what they set out to do, as something that will take the place of an agreement, is just not so.”
After negotiations with lawmakers on the next package of pandemic economic assistance hit a wall, Trump used what he said were the inherent powers of the presidency to forge ahead on tax and spending policy that Congress says it is granted by the Constitution.
Trump asserted he had the authority to defer payroll taxes and extend an expired unemployment benefit, although at a lower amount than what the jobless had been getting during the crisis. His reelection chances imperiled by the pandemic, the president contended his orders “will take care of pretty much this entire situation, as we know it.”
But the orders appeared to carry less weight than Trump promoted and cut federal relief spending by shifting more onto the shoulders of struggling states. Critics said the actions crossed a legal line and fell well short of what is needed to help right the fragile economy.
“Paltry,” said Senate Democratic leader Chuck Schumer of New York, given the scope of the economic and health crises.
Though certain to further strain relations with Congress, the moves were framed by the White House as the president breaking through the Washington gridlock in order to directly distribute aid. Advisers hope it will sustain an economic recovery that Trump likely needs to defeat Democrat Joe Biden in November.
With an eye on reversing his slide in the polls, Trump took full credit for the measures, which he signed at his New Jersey golf club on Saturday after congressional talks broke down this past week. Democrats initially sought a $3.4 trillion package, but said they lowered their demand to $2 trillion. Republicans had proposed a $1 trillion plan.
Trump accused Democrats of trying to spend more than was needed and adding money for priorities unrelated to the pandemic. He said local aid amounted to “bailout money” for states and cities "badly run by Democrats for many years. ... And we’re not willing to do that.”
The president wants to continue paying a supplemental federal unemployment benefit for millions of Americans put out of work during the outbreak. But his order called for up to $400 payments each week, compared with the $600 that people had been receiving. Trump said states would cover 25% of this money even as many are dealing with major budget shortfalls.
As state officials questioned whether they could afford $100 per person per week, Trump offered a new angle to the plan. Speaking to reporters Sunday night as he returned to Washington, he said states could make application to have the federal government provide all or part of the $400 payments. He said decisions would be made on a state-by-state basis.
Trump said earlier that the federal contribution would be redirected from disaster relief money at the Federal Emergency Management Agency — dollars not likely to last more than two months. Shifting FEMA disaster funds also would occur as the peak of hurricane season looms and the National Oceanic and Atmospheric Administration warns of an “extremely active” season already underway.
Trump's top economic adviser, Larry Kudlow, struggled during a television interview Sunday morning to clearly explain the specifics of his boss' order on unemployment aid. Treasury Secretary Steven Mnuchin said the $100 share from states would come from from an earlier pool of federal money and that Trump may waive the requirement about how it can be used.
“Look, that would cost us about $500 million between now and the end of the year,” said Connecticut Gov. Ned Lamont, a Democrat. “I could take that money from testing. I don’t think that’s a great idea. I could take that money from, you know, mass disinfecting for our schools. I don’t think that’s a great idea. In fact, I think the president’s plan is not a great idea.”
Pelosi, D-Calif., criticized Trump for not doing anything to help schools trying to reopen and she said the orders were “unconstitutional slop.”
Trump also acted to defer payment of the payroll tax, a long-pushed goal that had little support from either party on Capitol Hill, and federal student loans. His order on housing is not a guarantee against eviction, as he claimed, but instead directs the departments of the Treasury and Housing and Urban Development to identify money that could help those struggling to pay their monthly rent.
Trump said the employee portion of the payroll tax would be deferred from Aug. 1 through the end of the year, and he raised the possibility of making it permanent, though experts said he lacked that authority. The temporary deferral would not directly aid unemployed workers, who do not pay the tax when they are jobless. Employees would need to repay the federal government eventually without an act of Congress.
The president was silent on Saturday on how he would fund Medicare and Social Security benefits that the 7% tax on employee income covers. Democrats seized on the possible threat to Social Security as a signal that Trump wanted to cut the social safety net.
On Sunday night, in the wake of that criticism, Trump told reporters the money would not come from Social Security but from the Treasury if the government didn't require workers to repay the taxes. Again, that would require congressional action.
“If the Democrats want to challenge us in court and hold up unemployment benefits to those hardworking Americans who are out of a job because of COVID, they’re going to have a lot of explaining to do,” Mnuchin said.
Both the White House and congressional Democrats indicated Sunday they wanted to resume negotiations, but no talks were scheduled.
The breakdown comes with the Nov. 3 election approaching and the White House nervously watching signs that the economic recovery is slowing down as the coronavirus surges.
“This is not presidential leadership," Biden said. "These orders are not real solutions. They are just another cynical ploy designed to deflect responsibility. Some measures do far more harm than good.”
Pelosi and Mnuchin were on “Fox News Sunday,” Schumer was on ABC's “This Week” and Lamont was on CBS' “Face the Nation.”