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Trump signs executive orders enacting $400 unemployment benefit, payroll tax cut after coronavirus stimulus talks stall

WASHINGTON – With stimulus talks with Congress at an impasse, President Donald Trump signed a series of executive orders on Saturday to provide temporary relief to Americans who are suffering from the economic impact of the coronavirus pandemic.

Speaking from his golf resort in Bedminster, N.J., Trump announced an additional $400 per week in unemployment benefits, which is $200 less than the supplemental benefit that expired at the end of July. 

Trump said he also would suspend payments on some student loans through the end of the year, protect renters from being evicted from their homes, and instruct employers to defer certain payroll taxes through the end of the year for Americans who earn less than $100,000 annually.

Trump said he decided to act on his own and order the benefits after two weeks of negotiations with congressional Democrats collapsed without an agreement on a new coronavirus relief package. 

“We’ve had it,” he said. “We’re going to save American jobs and provide relief to the American worker.”

House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., met for more than two hours Friday with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows in a last-ditch attempt to salvage discussions and come up with a new package to help Americans still feeling the economic effects of the pandemic.

But the talks appeared fruitless, with both sides admitting they were at a standstill with no real pathway forward. 

Afterward, Mnuchin announced that he and Meadows would recommend that Trump move forward with the executive orders, even though Democrats said the president lacks the legal authority to take unilateral action and that he doesn’t have enough money in the federal budget to accomplish his goals.

Trump had been threatening for days to provide relief through an executive order if negotiations failed to produce a deal.

Before leaving for a trip to Ohio on Thursday, Trump said he had instructed his staff to work on the details of orders.

“It’s possible we’ll make a deal, but it’s also possible we won’t,” Trump told reporters.

Congressional lawmakers had interpreted Trump’s threat as a way to pressure negotiators into making a deal. Even some Republicans said they believed Trump was bluffing.

“I doubt if he’s serious,” Sen. Chuck Grassley, R-Iowa, told reporters on Thursday.

He was.

Here’s a closer look at what Trump’s orders would do: 

Unemployment

Congress approved an additional weekly unemployment benefit in the spring as the coronavirus took hold. It provided an extra $600 per week to Americans filing unemployment on top of what they received in state benefits.

But that benefit expired July 31, leaving many out-of-work Americans in a state of financial limbo. Trump’s order would allow states to provide up to $400-per-week in expanded benefits, 75% of which would come from the federal government’s disaster relief fund. States would have to pay the reaming 25% of the cost.

Democrats wanted to extend the full $600 benefit, but Republicans balked, arguing it was a disincentive for some Americans to return to work because they would receive more in unemployment than they earned on the job. Republicans wanted to bring the benefit down to $200. Trump’s decision to order $400 in benefits splits the difference.

States may pay for their portion of the benefits by using money provided to them under a coronavirus-relief package passed earlier this year, the executive order says.

Evictions

A federal moratorium on evictions expired July 24, putting at risk the tenants of more than 12 million rental units nationwide if they miss payments. 

Trump’s order instructs the Department of Housing and Urban Development (HUD), the Department of Health and Human Services and the Centers for Disease Control and Prevention to enable renters and homeowners to stay in their homes. HUD also will provide financial assistance to struggling renters and homeowners, Trump said.

Student loans

Congress also suspended payments on some student loans due to the virus. The provision is set to expire at the end of September. Trump’s orders will extend the deferments through the end of the year.

Payroll tax cut

For months, the president has pushed for a payroll tax cut but has been met with blunt opposition from Republicans and Democrats in both chambers of Congress. Trump’s order instructs the Treasury Department to allow employers to defer payment of certain payroll taxes from Sept. 1 to the end of the year for Americans earning less than $100,000 per year.

Trump’s orders don’t address several other popular coronavirus-relief provisions that Congress passed earlier, including $1,200 stimulus checks and the Paycheck Protection Program, which provided loans that helped keep more than 5 million small businesses afloat during the pandemic. That program expires today.

Several Republicans showed their support for the $400-per-week in enhanced unemployment benefits, including Grassley, Sen. Lindsey Graham of South Carolina and HUD Secretary Ben Carson.

“Great decision by President @realDonaldTrump,” Graham wrote on Twitter. “I appreciate the President taking this decisive action but would much prefer a congressional agreement. I believe President Trump would prefer the same.”

Grassley blamed Democrats for stalling the relief, saying their “all or nothing strategy jeopardizes the certainty Americans need to pay their bills.”

Political opponents questioned whether Trump’s orders are legal and whether they would be effective in any case.

“It’s nowhere close to enough to fix the problem,” Democratic strategist Eddie Vale said.

Josh Schwerin of Priorities USA Action, a political action committee that supports Democratic candidates, described Trump’s actions as little more than a political stunt.

“The idea that this is Trump leading is total hogwash,” Schwerin said. “House Democrats passed a relief bill two months ago and Trump has chosen to force the country deeper into a recession rather than take action. Trump has failed on the coronavirus, and he has failed on the economy.”

Laurence H. Tribe, professor emeritus at Harvard Law School, called Trump’s actions “cynical” as well as unconstitutional.

“Trump might as well have directed the distribution of $100,000 to every family earning under $1 million a year,” he said. “He obviously has no legal power to do that. But daring anyone to take him to court might be good politics.”

Josh Blackman, an expert on constitutional law, said Trump may try to get around questions about whether he has the authority to grant a payroll tax cut and other relief through executive order by simply instructing that existing federal law not be fully enforced.

“Rather than bestowing benefits, he would simply instruct the government not to collect taxes for example, or evict people in federal housing,” said Blackman, a professor of constitutional law at South Texas College of Law in Houston.

If Trump loses the election to Democrat Joe Biden in November, it could be difficult for Biden to end those policies right away, Blackman said. “Biden’s efforts to stop them will be tied up in litigation, potentially for years,” he said.

Congress and the White House have been struggling to develop a new coronavirus package as the deadly toll of the pandemic continues to mount. More than 160,000 Americans have died from the disease caused by the virus, and nearly 5 million have been infected by the virus.

In May, the Democratic-led House passed the HEROES Act, a roughly $3.4 trillion bill that would provide a second round of direct payments to millions of Americans, nearly $1 trillion to revenue-strapped states and local governments and billions for housing and food assistance.

In July, the Republican-controlled Senate introduced its counter-proposal, the HEALS Act, a $1.1 trillion package that includes direct payments but no federal aid for housing, food or state and local governments. It has yet to pass the chamber.

Contributing: Christal Hayes, Nicholas Wu, Ledyard King, John Fritze, Jason Lalljee

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