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Trump Uses Executive Orders for COVID-19 Stimulus after Congressional Stalemate
President Trump took it upon himself to issue executive orders regarding stimulus measures over the weekend after negotiations in Congress stalled last week.
The president issued executive orders enacting a series of relief measures relating to the coronavirus crisis. Previous statements from Trump indicated that using executive orders to pass stimulus measures was a last resort. Still, he moved forward with the effort after legislators failed to reach an agreement last week. The mandates address four key areas: evictions, student loans, unemployment benefits, and payroll taxes.
Trump hosted a press conference to outline the new proposals. The Constitution only allows limited executive authority over spending concerns, so the administration hopes Congress can still reach a deal. ”My administration continues to work in good faith to reach an agreement with Democrats in Congress that will extend unemployment benefits, provide protections against evictions,” Trump said. “Yet tragically, Nancy Pelosi and Chuck Schumer continue to insist on radical left-wing policies that have nothing to do with the China virus… If Democrats continue to hold this critical relief hostage, I will act under my authority as president to get Americans the relief they need.”
Trump's Executive Orders
President Donald Trump on Saturday signed an executive order for coronavirus relief that would provide an additional $400 per week in unemployment benefits to millions of out-of-work Americans. pic.twitter.com/qPC3hS7Vhz
— USA TODAY (@USATODAY) August 9, 2020
President Trump said he’s expanding unemployment payments with an additional $400 benefit. The executive order calls for federal and state governments to split the cost of the enhanced benefits. With this, states will pick up 25% of the tab. The CARES Act provided similar supplemental benefits, but they expired at the end of July. Under Trump’s orders, the federal government would set aside $44 billion from the Disaster Relief Fund. This aims to cover the cost of the expanded benefits. It also effectively side-steps Congress’s authority over budgeting concerns.
Expanded unemployment benefits initially provided an additional $600 per week. However, many recipients earned substantially more than they did at work under those terms. The overly generous benefits package incentivized people to stay on unemployment as long as possible. Therefore, many lawmakers were against renewing the full $600 benefit. Republican lawmakers initially proposed expanding payments to $200 per week or 70% of previous wages, but later offered a $400 increase as a compromise.
The executive orders also called on the Treasury Department to defer the 6.2% Social Security tax on employees earning less than $100,000 per year until December 31. President Trump has been a long-time proponent of a reduced payroll tax. However, it failed to gain traction among Republican lawmakers. The deferment isn’t a tax cut, so employees are still responsible for paying the taxes in 2021. However, Trump said he would pressure Congress to transition the deferral to an actual tax cut.
The president also targeted student loans. He extended a freeze on student loan payments and interest until the end of the pandemic crisis. The existing student loan freeze was set to expire on September 30.
The Orders and the CARES Act
The orders didn’t extend the CARES Act moratorium on evictions from federally-backed properties that expired in July because those restrictions only applied to one-third of renters. Instead, Trump directed the Treasury and Housing and Urban Development administration to identify funds to provide financial assistance to renters and homeowners struggling to meet their housing obligations as a result of the pandemic. He also instructed the Federal Housing Finance Agency, which oversees federal mortgage lenders Freddie Mac and Fannie Mae, to “review all existing authorities and resources that may be used to prevent evictions and foreclosures for renters and homeowners.”
Democratic leaders are already in an uproar over Trump’s orders. Many prominent Democrats are already criticizing the president for circumventing Congress’s spending authority. The Democrats don’t want to give Trump a win so close to the election, so expect them to fight tooth-and-nail to nullify the Trump stimulus. The executive orders will almost certainly face challenges in court. Hopefully, the executive actions will at least give Democrats some motivation to compromise.
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