After failing to reach an agreement with Democratic and Republican lawmakers, President Trump has revealed his own Coronavirus relief measures through executive order.
Revealed at an invite-only event at his New Jersey country club over the weekend, the President announced a payroll tax deferment program, as well as additional federal payments for people receiving unemployment checks.
Here are the most important takeaways from the announcement.
Federal Unemployment Benefit to Be Extended with Lower Payments
In one of the President’s executive orders, he called for up to $400 per week in federal unemployment payments. This is less than the $600 per week that Democrats wanted in the HEROES Act that was passed in the House of Representatives in May.
25% of the weekly payment will need to be funded by the states. If states don’t have the funds available, then unemployment checks may only include a partial government subsidy.
House lawmakers wanted the federal unemployment payments to run until 2021, but President Trump hasn’t noted how long his program would last.
Payroll Tax Deferment for Most Working Americans
Americans earning less than $100,000 per year will be eligible for payroll tax deferments under another executive order introduced by Trump. This is effective from August 1 and will continue until the end of the year.
While this will offer some relief to workers now, taxes would still be due next year, which could create a larger burden for some families, especially if America’s economic recovery is slow.
Republican and Democratic lawmakers had argued against any payroll tax cuts because they will compromise the functioning of Medicare and Social Security.
Executive Orders May See Legal Challenge
Congress has the constitutional power to control the budget of the federal government. With these executive orders, President Trump has bypassed lawmakers.
Republican Senator Ben Sasse of Nebraska was particularly critical of Trump’s move. He said called the orders “unconstitutional slop” and said that Trump “does not have the power to unilaterally rewrite the payroll tax law.”
House Speaker Nancy Pelosi, who has been negotiating with White House officials for weeks, said that Trump’s orders were a stunt and that they will be “unworkable, weak and narrow.”
If lawmakers want to do better than what the President has offered, they will need to overcome partisan differences in their own relief package proposals. Expect this story to develop quickly in the coming days as top Democrats and Republicans respond to the surprise announcement
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