Trump Takes Executive Action on Economic Relief Package

President Donald Trump on Saturday moved to defer payroll taxes and extend an expired unemployment benefit after negotiations with Congress on a new coronavirus rescue package collapsed.At his private country club in Bedminster, New Jersey, Trump moved to continue paying a supplemental federal unemployment benefit for millions of Americans out of work during the outbreak.However, his order called for up to $400 payments, one-third less than the $600 people had been receiving. Congress allowed those higher payments to lapse on August 1, and negotiations to extend them have been mired in partisan gridlock, with the White House and Democrats miles apart.Trump largely stayed on the sidelines during the administration’s negotiations with congressional leaders, leaving the talks on his side to Chief of Staff Mark Meadows and Treasury Secretary Steve Mnuchin.Trump’s embrace of executive actions — he signed one executive order and three memoranda Saturday — to sidestep Congress runs in sharp contrast to his criticism of former President Barack Obama’s use of executive orders on a more limited basis. And the president’s step back from talks with Congress breaks with his self-assured negotiating skills.FILE – House Speaker Nancy Pelosi, accompanied by Senate Minority Leader Chuck Schumer, speaks to reporters following a meeting with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows, Aug. 7, 2020.States are asked to helpNow, Trump, who has not spoken with Democratic House Speaker Nancy Pelosi since last year, sought to play the role of election-year savior, with the $400 weekly assistance, as well as a deferral of payroll tax and federal student loan payments and the continuation of a freeze on some evictions during the crisis.”It’s $400 a week, and we’re doing it without the Democrats,” Trump said, asking states to cover 25% of the cost. Trump is seeking to set aside $44 billion in previously approved disaster aid to help states maintain supplemental pandemic jobless benefits, but he said it would be up to states to determine how much, if any of it, to fund, so the benefits could be smaller still.Many states have been facing budget shortfalls because of the coronavirus pandemic and would have difficulty assuming the new obligation. The previous unemployment benefit was fully funded by Washington.The president said at his club on Friday night that “if Democrats continue to hold this critical relief hostage I will act under my authority as president to get Americans the relief they need.”Democrats had said they would lower their spending demands from $3.4 trillion to $2 trillion but said the White House needed to increase its offer. Republicans have proposed a $1 trillion plan.Trump said the employee portion of the payroll tax would be deferred from August 1 through the end of the year. The move would not directly aid unemployed workers, who do not pay the tax when they are jobless, and employees will need to repay the federal government eventually without an act of Congress, where there is bipartisan opposition.Interest-free loanIn essence, the deferral is an interest-free loan that would have to be repaid. Trump said he’d try to get lawmakers to extend it, and the timing would line up with a post-election lame-duck session in which Congress will try to pass government funding bills.”If I win, I may extend and terminate,” Trump said, repeating a longtime goal but remaining silent on how he’d fund the Medicare and Social Security benefits that the 7% tax on employee income covers. Employers also pay 7.65% of their payrolls into the funds.FILE – Sen. Ron Wyden, D-Ore. talks with a reporter before the start of a meeting with Senate Democrats on Capitol Hill in Washington, May 22, 2015.”This fake tax cut would also be a big shock to workers who thought they were getting a tax cut when it was only a delay,” said Democratic Senator Ron Wyden of Oregon. “These workers would be hit with much bigger payments down the road.”Both the House and Senate have left Washington, with members sent home on instructions to be ready to return for a vote on an agreement. With no deal in sight, lawmakers’ absence raised the possibility of a prolonged stalemate that stretches well into August and even September.The breakdown in the negotiations between the White House and congressional Democrats is particularly distressing for schools, which have been counting on billions of dollars from Washington to help with the costs of reopening. But other priorities are also languishing, including a fresh round of $1,200 direct payments to most people, a cash infusion for the struggling Postal Service and money to help states hold elections in November.



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