Editorial: The Fine Print in Trump’s Coronavirus Executive Orders

After Congress failed to come to an agreement on a new coronavirus relief package, Donald Trump, self-proclaimed “deal maker,” sidestepped Congress and signed three memoranda and one executive order (all four of which he incorrectly called “bills”), claiming they would “take care of, pretty much, this entire situation.” The “deals,” however, are legally questionable, since Congress must approve federal actions on spending and taxation. Additionally, when one looks more closely, the four hollow executive orders are not “deals” at all for Americans.

House Democrats passed the more than $3 trillion Heroes Act in May to continue relief to Americans, but the bill stalled in the Senate. Republicans can’t even agree among themselves on how to move forward with a relief bill. Donald Trump is no doubt hoping his base will see him as stepping in to save the country, with these four actions as proof of his 2016 campaign claim that “I alone can fix it.” In reality, though, they fix nothing, and, in fact, make things worse. Here is what Trump’s “dealmaking” will get Americans:

Payroll Tax “Cut”

What Trump is calling a “tax cut” is actually a tax deferment that lasts from Sept. 1 through Dec. 31. Under this executive order, the U.S. Treasury will stop collecting payroll taxes during that time from workers who earn less than about $104,000 a year, or $4,000 every two weeks. Though workers will temporarily feel as if they’ve gotten a pay increase, they will owe those payroll taxes at a later date.

This does nothing to help those who don’t receive a paycheck because they are unemployed.

Trump ordered a tax deferment instead of a cut because he does not have the power on his own to cut taxes. He is, however, calling on Congress to make it a permanent tax cut. This sounds great until we realize that the payroll tax is what supports Social Security. If a tax cut is made permanent, it will deplete the funds in our Social Security system.

Deferred Student Loan Payments

Trump’s memo regarding student loan payments waives interest on all federal student loans until December 31, and allows delayed payments until December 31. Principal payments will be due on December 31, and full payments including interest will start again on January 1. Student loan debt will not be canceled.

Relief for Renters and Homeowners

Trump’s “relief” here amounts to nothing more than a “study” to see if a moratorium is needed. The federal moratorium on evictions has ended, and Trump’s new executive order does not extend it; evictions due to financial hardship are now no longer banned. Trump has instead called on Secretary of Health and Human Services Alex Azar and Director of the Centers for Disease Control and Prevention Robert Redfield to study whether halting evictions stops the spread of COVID-19. This doesn’t address the financial hardships that have already resulted from COVID-19.

Trump’s memo also doesn’t provide money to help homeowners. It only calls for Treasury Secretary Steven Mnuchin and Housing and Urban Development Secretary Ben Carson to “see if they can find” any more funds to help, though no aid is promised, and no legislation is in place to protect homeowners from losing their homes due to COVID-related financial hardship.

Supplemental Unemployment Aid

Unemployed Americans were receiving $600 a week from the federal government in addition to their state unemployment aid, but that expired at the end of July. Democrats and Republicans could not agree on how or if to extend the federal aid; Democrats wanted to continue the $600 per week, and Republicans wanted to reduce it to $200 a week. Trump’s memorandum calls for the federal aid to restart at $400 a week. This sounds like a compromise until we look more closely at how it would work.

The federal $400 a week has two conditions in order for unemployed workers to receive it: their states must ask for it, and their states must contribute 25 percent ($100) of that $400 per week for each recipient.

Many states, already financially strapped from the coronavirus pandemic, won’t be able to afford to provide this supplemental benefit for their unemployed workers. And because of outdated and inadequate processing systems in some states, many unemployed Americans are still waiting on their first round of unemployment benefits. It could take months for states to adapt to new guidelines and systems for executing this latest scheme if they do sign on.

What’s more, the source of this additional unemployment aid is questionable. Trump wants to fund it by shifting $44 billion of funds from the Department of Homeland Security’s Disaster Relief Funds which are designated for tornadoes, hurricanes, and extensive fires such as forest fires. Currently, 30 million Americans are unemployed. The funding to cover them all would run out in less than five weeks.

And again, in reality, Trump’s action assumes and ignores Congress’ rightful authority.

David Super, a constitutional law expert at Georgetown Law, says, “The basic notion here is the president is rejecting Congress’s power of the purse. That is something nobody who cares about separation of powers can let slide, even if they like what the money is being spent on.”

The legality of these four actions is already being called into question by members of both parties, and it’s likely that Trump will face formal legal challenges over them, since he is attempting to bypass Congress.

House Speaker Nancy Pelosi called Trump’s actions “absurdly unconstitutional.”

Trump has offered a hollow set of pseudo-relief measures that are full of contingencies, not the least of which is whether they are even legal or enactable. Besides offering no real and definitive relief from financial hardship, Trump’s executive actions fail to address several other important issues, including funding for schools to help ensure safe reopening, relief for the hungry, and assistance for cities and states as they continue to battle COVID-19. Trump’s “deal” for financially strapped Americans is hardly a deal at all.

Trump signs executive orders on coronavirus relief l GMA
Good Morning America  [2020-08-10]

Trump signs executive orders on payroll tax, evictions, and unemployment bonus | Global News [2020-08-08]

Editorial: The Coronavirus Pandemic Didn’t Create the Holes in Our System

One could conjecture that as much as the coronavirus pandemic has hurt our economy, it is the ongoing failures of lawmakers to truly champion Americans in need, and the lack of existing systems to work for their benefit, that  have done at least as much damage over time.

This weekend, tens of millions of unemployed Americans stand to lose the emergency supplemental unemployment assistance that has helped them through joblessness during the coronavirus pandemic. The federal benefit supplement, part of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), will expire on Saturday. Senate Republicans can’t agree on a new coronavirus legislative package to present to Democrats, and it’s uncertain how, or if, the bill will address an extension to the federal emergency jobless benefit supplement.

While the Republicans haggle over what to include in a new relief bill, millions of Americans fear losing their homes, no longer having health insurance, and figuring out which bills to pay and which they’ll have to let go for now.  Some are still waiting to begin receiving their first round of unemployment benefits, due to outdated and backlogged claims processing systems in various states.

Back in May, House Democrats passed an economic stimulus bill that would, among other things, extend the federal unemployment benefit supplement created in the CARES Act through the end of the year, as well as provide another round of one-time stimulus checks to Americans. That bill, however, has been sitting on Senate Majority Leader Mitch McConnell’s desk.

GOP Senators hope to agree on their own bill to present to Democrats by Monday, July 27. It’s not certain whether the bill will include an extension of the emergency unemployment benefit, or whether that will be addressed separately.

The GOP bill is expected to include, among other items, funds for schools, some of which would be tied to reopening classrooms. It would also include a new round of stimulus payments to individuals. McConnell, however, is pressing for the stimulus payments to go only to Americans earning less than $40,000 a year, which would leave many Americans falling through the cracks.

President Trump had pushed for including a payroll tax cut, possibly instead of extending federal unemployment benefits. Though he had threatened not to sign a bill without a tax cut, Republicans have resisted, since it would only help those who still receive paychecks. Additionally, it would drain the Social Security and Medicare trust funds.

Reflecting the perspective of someone who has apparently never experienced financial hardship, conservative economist Stephen Moore, who advised Trump during his 2016 campaign, disagreed. “We’ve gone in less than 10 days from Trump saying that he won’t sign a bill without a payroll tax cut to the bill they’re drafting not having a payroll tax cut,” he said. “There is no benefit from dumping money from helicopters into people’s laps.”

If the supplemental benefit is not extended, unemployed Americans will revert back to receiving only their state unemployment benefits, which average $370 per week. One could argue that they are the people who would benefit from some money dumped into their laps.

Many Republicans have agreed on temporarily extending the emergency unemployment benefit, but reducing it from the original $600 per week to $200 per week.

But, says Ernie Tedeschi, who was a Treasury Department economist during the Obama administration, “U.S. Gross Domestic Product would be 1.33 percentage points smaller at the end of the year than if the benefit were extended at $600 per week for the rest of the year.” He added that the resulting reduction in spending would lead to more than 1 million fewer jobs.

Other Republicans oppose extending the unemployment supplement at all because they worry that it will be a disincentive for jobless Americans to return to work. A “back-to-work” incentive payment has also been suggested instead of an extended jobless benefit supplement.

“It’s not a difficult concept. You don’t get paid more to stay home than you do when you have a job,” said Treasury Secretary Steven Mnuchin.

Perhaps they’re thinking that Americans should just heed Ivanka Trump’s tone-deaf advice and “find something new,” even in the midst of the coronavirus pandemic.

As Senate Republicans dicker over how little assistance they can get away with giving Americans, and what stipulations they can put on the assistance, it’s apparent that what concerns many Republican lawmakers most is the fear that some American somewhere might get a dollar he or she isn’t entitled to. They fret over the possibility that someone might not be jumping through enough hoops for the assistance they receive.

But let’s suppose that for some Americans, the lack of motivation to seek work is due to the fact that their unemployment benefit is greater than what they’d earned at their jobs. When someone can earn more from a jobless benefit than they can when they work full-time (or more), the problem is not with the employee, it’s with the lack of a livable minimum wage.

Republican lawmakers continue to collect their salaries and enjoy their excellent health insurance as they fail to act on behalf of American workers. Their squeamishness for what they see as “handouts,” and the requirements they continually want to set up to ensure that no one gets “too much” have perpetuated an inept and inadequate social welfare system, leaving many hardworking Americans without a safety net– especially if they were living paycheck to paycheck during better economic times.

When millions of Americans have no safety net, or fall through the holes of a weak safety net, it reverberates throughout the U.S. economy. The coronavirus pandemic has only magnified this. It may have exacerbated our economic situation, but more than that, it has highlighted the glaring ways in which our system has failed, and continues to fail, many Americans.

White House and Republican senators reach tentative deal on new coronavirus stimulus package | CBS News [2020-07-23]

Coronavirus stimulus: Mnuchin says there is a ‘fundamental’ agreement between White House and GOP | Yahoo Finance [2020-07-23]