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Trump Orders More Unemployment Pay, Payroll Tax Deferral after Negotiations on Covid-19 Rescue Package Collapsed

US President Donald Trump (REUTERS)

US President Donald Trump (REUTERS)

At his private country club in Bedminster, New Jersey, Trump signed four executive orders to act where Congress hasn't, contending Washington's gridlock had compelled him to act as the pandemic undermined the country's economy and imperiled his November reelection hopes.

Seizing the power of his podium and his pen, President Donald Trump on Saturday moved to bypass the nation's elected lawmakers as he claimed the authority 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 signed four executive orders to act where Congress hasn't, contending Washington's gridlock had compelled him to act as the pandemic undermined the country's economy and imperiled his November reelection hopes.

Perhaps most crucially, Trump moved to continue paying a supplemental federal unemployment benefit for millions of Americans out of work during the outbreak. Congress allowed those 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 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.

Now, 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 USD 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 USD 400 a week, and we're doing it without the Democrats," Trump said, asking states to cover 25 per cent of the cost. It was not immediately clear where the federal portion would come from – though the president suggested he was looking to use unspent funds from previous coronavirus relief bills – and Trump said it would be up to states to determine how much, if any of it to fund.

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 USD 3.4 trillion to USD 2 trillion but said the White House needed to increase their offer. Republicans have proposed a USD 1 trillion plan.

White House aides have watched the talks break down with apprehension, fearful that failure to close a deal could further damage an economic recovery already showing signs of slowing down.

Friday's jobs report, though it beat expectations, was smaller than the past two months, in part because a resurgence of the virus has led to states rolling back their reopenings.

The president's team believes the economy needs to stabilize and show signs of growth for him to have any chance at winning reelection. Aides were hoping to frame the expected executive orders signings as a sign that Trump was taking action in a time of crisis.

But it also would reinforce the view that the president, who took office declaring he was a dealmaker, was unable to steer the process to an agreement.

Trump said Saturday the orders "will take care of pretty much this entire situation, as we know it." But they are far smaller in scope than congressional legislation, and even aides acknowledged they didn't meet the needs of all that was required.

"This is not a perfect answer, we'll be the first ones to say that," Meadows said Friday as talks broke down. "But it is all that we can do and all the president can do within the confines of his executive power, and we're going to encourage him to do it."

Trump said the employer portion of the payroll tax would be deferred from Aug. 1 through the end of the year, though the move would not directly aid unemployed workers, who do not pay the tax when they are jobless, and faces bipartisan opposition on Capitol Hill.

"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 per cent tax on employee income covers.

Employers also pay 7.65 per cent of their payrolls into the funds. 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, their absence raised the possibility of a prolonged stalemate that stretches well into August and even September.

Often an impasse in Washington is of little consequence for the public – but not so this time. It would mean more hardship for millions of people who are losing enhanced jobless benefits and further damage for an economy pummeled by the still-raging coronavirus.

Friday's negotiations at the Capitol added up to only "a disappointing meeting," said Senate Democratic leader Chuck Schumer of New York.

He said the White House had rejected an offer by Pelosi, D-Calif., to curb Democratic demands by about $1 trillion. Schumer urged the White House to "negotiate with Democrats and meet us in the middle. Don't say it's your way or no way."

That Capitol Hill session followed a combative meeting Thursday evening that for the first time cast real doubt on the ability of the Trump administration and Democrats to come together on a fifth COVID-19 response bill.


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