Trump’s orders on coronavirus relief create confusion

President Donald Trump’s attempt to circumvent Congress to provide coronavirus relief in the absence of a broad agreement resulted in confusion and uncertainty Sunday for tens of millions of unemployed Americans and countless businesses seeking aid after critical benefits lapsed.

As negotiations with congressional Democrats remained at an impasse, administration officials were on the defensive a day after the president’s legally questionable executive actions, at times contradicting one another as they sought to explain how the measures would work and how quickly Americans could see any form of relief.

In a series of television appearances Sunday, they insisted that Americans would receive the aid promised by Trump, including a $400 weekly supplement to unemployment checks.

But that funding will be contingent on agreement from state officials, who are already struggling amid budget shortfalls caused by the economic crisis, and the siphoning of aid from a federal fund for disaster relief in the middle of what is expected to be an active hurricane season.

The series of measures Trump signed Saturday were intended to revive unemployment benefits, address an eviction ban, provide relief for student borrowers and suspend collection of payroll taxes after two weeks of talks between congressional Democrats and administration officials failed to produce an agreement on a broader relief package.

But the patchwork of moves was less significant than what the president described in his news conference, and the plan appeared unlikely to have immediate, meaningful impact on the sputtering economy, in part because it provided no direct aid to struggling businesses.

Because Congress has the constitutional authority to allocate federal spending, Trump — who has frequently turned to unilateral action, as opposed to wrangling through tough negotiations — is likely to need congressional agreement, and legislation, to deliver additional financial relief to American families and businesses.

Democrats swiftly criticised Trump’s actions as an example of executive overreach, saying the measures offered thin support for struggling Americans and warning that the nation’s social safety net could be jeopardised while the coronavirus pandemic continued to spread. After two weeks of huddling with Trump’s top advisers on Capitol Hill in an effort to hammer out a deal, House Speaker Nancy Pelosi of California and Sen. Chuck Schumer of New York, the Democratic leader, called for talks to resume.

“The president’s meager, weak and unconstitutional actions further demand that we have an agreement,” Pelosi said on “Fox News Sunday.” She rejected the suggestion that she had erred by holding out for Democratic priorities, telling the program’s anchor, Chris Wallace, that “clearly you don’t have an understanding of what is happening here.”

Talking to reporters Sunday before boarding Air Force One in New Jersey, where he attended a fundraiser after a weekend at his golf club, Trump said he would be willing to talk to Pelosi, whom he has not spoken with one-on-one since last year.

The president insisted that Democrats were “more inclined” to make a deal with him now, without pointing to evidence as to why that would be, and that circumventing Congress “works better.” He also said he did not have to “give up” anything in a negotiation.

Trump’s top economic advisers were on the defensive on the Sunday talk shows as they tried to justify the president’s authority to bypass Congress to redirect billions of dollars. They argued that Democrats, who first approved a $3.4 trillion stimulus package in May, were unwilling to compromise, particularly on sending additional aid to state and local governments.

Steven Mnuchin, the Treasury secretary, called on Pelosi and Schumer to consider a more narrow package that addressed the issues where there was agreement, saying that negotiators had resolved most provisions except for reviving unemployment benefits and distributing money to state and local governments. (Drew Hammill, a spokesman for Pelosi, disputed that characterisation.)

“We don’t have to get everything done at once,” Mnuchin said on “Fox News Sunday.” “What we should do is get things done for the American public now, come back for another bill afterward.”

He insisted that White House lawyers approved the moves as legal and dared Democrats to take the White House to court to stop money from being released to jobless Americans.

“If the Democrats want to challenge us in court and hold up unemployment benefits to those hardworking Americans that are out of a job because of COVID, they’re going to have a lot of explaining to do,” Mnuchin said.

But there was some acknowledgment that the measures could face legal challenges and were not as potent as congressional action.

A number of critical provisions are also left unaddressed without a broader deal, including a lapsed federal program for small businesses, another round of stimulus checks, aid to schools confronting the beginning of the academic year and funds for state and local governments reeling from the toll of the pandemic.

“The downside of executive orders is you can’t address some of the small business incidents that are there,” Mark Meadows, the White House chief of staff, said in a pretaped interview that aired Sunday on Gray Television. “You can’t necessarily get direct payments, because it has to do with appropriations. That’s something that the president doesn’t have the ability to do.”

White House lawyers had been crafting the executive actions over the past two weeks. By Friday, after the talks remained at a stalemate, it became clear that they would need to move forward with the plan. Trump was eager to sign the payroll tax order Friday evening, according to a senior administration official, but after his legal team said it was not yet ready, he opted to do so Saturday at his Bedminster golf club.

Officials in recent days had been debating which measures to employ, with Mnuchin resistant to the payroll tax suspension and Larry Kudlow, the director of the National Economic Council, arguing in support of it, according to a senior administration official. Although White House officials believe the executive actions have given Trump the upper hand, his advisers continue to say that more support for schools and another round of stimulus checks are needed to keep the economic recovery on track.

Among the most complicated measures is the president’s intention to revive lapsed weekly federal unemployment payments of $600 through the repurposing of other federal funds, including from a pot of disaster relief aid, to create a $400-a-week bonus payment. That payment, however, is contingent on states providing $100 per week and establishing an entirely new program — called a “lost wages assistance program” — to distribute the aid.

But states are also facing plunging revenues because of the pandemic. They have already struggled to allocate the original $600 payment because of overwhelmed and often antiquated systems, and some experts warn that the revised benefit could last for only five weeks.

Trump responded Sunday to criticism of the $100 requirement. “It will depend on the state,” he said. “They’ll make an application. We’ll look at it and make a decision. It may be they’ll pay nothing in some instances.”

The president went golfing Saturday with Sen. Lindsey Graham, R-SC, who had tried to nudge the president toward higher weekly subsidies to supplant lost income. Trump joked that they would simply have to run the printing presses faster to make up the additional amount it would cost, a person familiar with the discussion said.

Kudlow argued that states would be able to support the demand for $100 a week given that billions of dollars allocated in the $2.2 trillion stimulus law in March had not yet been spent. But when pressed during an interview on CNN, he acknowledged that it remained unclear how much states would be able to provide and when those benefits would be distributed.

While Mnuchin said Sunday that states could waive the $100 fee and payments could start “immediately,” Kudlow said the payments could take a few weeks.

On CNN’s “State of the Union,” Gov Mike DeWine of Ohio, a Republican, said he was studying whether his state government could afford to pay an extra $100 a week for unemployment insurance as required by Trump’s latest order.

“The answer is, I don’t know,” DeWine said.

He urged Congress to reach a deal that would provide a much bolder relief package, saying that “they really need to do it. They need to pull together.”

The effect the moves will have on the economy appears to be meager compared with the broader package that was under discussion, and it comes as job growth is already showing signs of slowing. The need for additional fiscal support from the government is clear, economists say, despite the fact that Democrats and Republicans are divided on how much money is needed and where to deploy it.

“Another support package is really incredibly important,” Charles Evans, the president of the Federal Reserve Bank of Chicago said on CBS’ “Face the Nation.”

Trump’s move to curb evictions also remains murky, given that his directive does not outright ban them but instead would require agency leaders to review the necessity of such a moratorium and examine whether additional federal funds were available to provide rental assistance.

It also remains unclear whether Trump’s decision to suspend the payroll tax through December, deferring payments, would have any immediate effect. His push to suspend the tax has faced significant objections from both parties, with Senate Republicans ultimately leaving out the proposal altogether in the $1 trillion legislation they unveiled late last month.

Many companies are likely to decline to stop withholding money for payroll taxes since it is uncertain that they will ever be waived. But Mnuchin rejected suggestions from Democrats that deferring payroll taxes would lead to cuts in Social Security or Medicare benefits. The money that supports those programs would be backstopped by a transfer from the Treasury general fund, he said.

Still, he acknowledged that the payroll taxes would eventually have to be repaid unless Trump could reach a deal on legislation that would allow them to be waived or forgiven — an unlikely scenario — and that the deficit would continue to swell.

“We’ll deal with the budget deficit when we get the economy back to where it was before,” Mnuchin said.

Democrats have charged that Trump’s plans to cut or forgive delayed payments of the payroll tax, which funds Social Security and Medicare, could endanger the long-term health of those programs. By depriving the government of payroll tax funds, the move could mean Trump’s order contradicts his repeated pledge to leave Social Security untouched — which prompted harsh criticism from former Vice President Joe Biden, the presumptive Democratic nominee.

“Unable to deliver for the American people in a time of crisis, Donald Trump offered a series of half-baked measures today,” Biden said in a statement Saturday. “He is putting Social Security at grave risk at a time when seniors are suffering the overwhelming impact of a pandemic he has failed to get under control. And make no mistake: Donald Trump said today that if he is reelected, he will defund Social Security.”

The president’s top aides also strained to defend his sweeping use of executive authority, which Trump derided when used by his predecessor, President Barack Obama.

Peter Navarro, Trump’s trade adviser, said on NBC’s “Meet the Press” that Congress left the president with no choice but to resort to executive orders and memorandum.

“The Lord and the Founding Fathers created executive orders because of partisan bickering and divided government,” Navarro said.

© 2020 New York Times News Service