President Donald Trump acted to break a stalemate with congressional Democrats on Saturday by signing an executive order he says would give millions of unemployed workers an extra $400 a week in benefits.
Trump split the difference between Senate Republicans’ insistence on $200 payments and the House Democratic bill that extended the existing $600 benefit through Jan. 31, 2021.
But he said states, already reeling from the loss of tax revenue due to the coronavirus-induced recession, would have to cover some of the extra payments.
The president also signed orders extending a moratorium on evictions, which had expired this month; continuing to waive the interest on student loans; and giving workers and their employers a payroll tax holiday through the end of the year.
His actions before a cheering crowd of guests at his Bedminster golf club came as White House officials were unable to reach a deal with congressional Democrats.
The president said the extra $400 for the unemployed was “the money they need” and gives them “a great incentive to go back to work.”
He called the $600 payment “a disincentive.”
The president did not rule out future negotiations and it is possible that his actions Saturday will be challenged since Congress, not the president, has the power under the Constitution to decide how federal dollars are spent.
In addition, Trump suggested that he might divert some of the trillions of dollars already approved by Congress for addressing the coronavirus but not yet spent.
He indicated one obstacle to an agreement was the Democrats’ insistence on providing federal aid to state and local governments whose budgets have taken a beating as tax collections dried up due to the cornavirus-induced recession.
Trump claimed the state and local budget problems had nothing to do with the recession.
“What they really want is bailout money for states run by Democrat governors and mayors,” Trump said.
Demand for federal aid has been near universal by governors.
It was led by the National Governors Association, which until this month was led by a Republican, Larry Hogan of Maryland. Senate legislation to provide that aid, led by U.S. Sen. Robert Menendez, D-N.J., was co-sponsored by Republican Sens. Bill Cassidy of Louisiana, Susan Collins of Maine and Cindy Hyde-Smith of Mississippi.
Texas faces a loss of $4.4 billion in tax revenues in the current fiscal year, and Florida $1.9 billion, according to the Center on Budget and Policy Priorities, a progressive research group. New Jersey’s shortfall would be $2.8 billion, the group said. Gov. Phil Murphy has repeatedly called on Washington to provide aid.
Federal aid to state governments was a key component of President Barack Obama’s $787 billion stimulus law passed in response to the Great Recession. It accounted for 42% of the package, or $330 billion, according to the California State Legislature’s fiscal and policy analysis office. What they did with that money however, is not easily trackable so accountability is questionable.
Trump said that if he was re-elected, he would not ask the businesses and workers to pay back the payroll taxes and even suggested he would extend the moratorium.
Both Democrats and Republicans in Congress publicly opposed the moratorium on payroll taxes, which fund the Social Security and Medicare trust funds, but Trump insisted they really supported it. “Everyone wants it,” he said.
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