President Donald Trump acted Saturday to extend an expired jobless benefit to tens of millions of Americans who have lost their jobs during the coronavirus pandemic and defer payroll taxes after negotiations with Congress on a new package of economic aid collapsed.
As the United States neared 5 million cases of the coronavirus and 162,000 deaths Saturday, Trump called for up to $400 extra in weekly unemployment payments, one-third less than the $600 people had been receiving. Congress allowed those payments to end August 1, and talks to extend them fell apart Friday, with the White House and Democrats far apart on relief aid.
"This is the money they need, this is the money they want, this gives them an incentive to go back to work," Trump said of the smaller jobless benefits during a news conference at his private country club in Bedminster, New Jersey.
He said 25 percent of it would be paid by states, whose budgets have been hard hit by the crisis. The president wants to set aside $44 billion in previously approved aid to help states pay the larger jobless benefits, but it would be up to states to decide how much, if any, to use, so the benefits could be smaller still. The previous unemployment benefit was fully funded by Washington.
"Donald Trump is trying to distract from his failure to extend the $600 federal boost for 30 million unemployed workers by issuing illegal executive orders," Oregon’s Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, said. "This scheme is a classic Donald Trump con: playacting at leadership while robbing people of the support they desperately need."
The president is also suspending payroll taxes for workers who make less than $100,000 through the end of the year. Unemployed workers, who do not pay the tax because they aren’t collecting a paycheck, won’t benefit. The taxes, 7 percent for employees, pay for Medicare and Social Security and will need to be paid eventually unless Congress acts, but there is bipartisan opposition to this on Capitol Hill.
"This fake tax cut would also be a big shock to workers who thought they were getting a tax cut when it was only a delay," Wyden said. "These workers would be hit with much bigger payments down the road."
Finally, the president said he was extending protections for tenants threatened with eviction and further delaying student loans payments and zero percent interest on federally financed loans.
Democratic presidential candidate Joe Biden called the orders a "series of half-baked measures" and accused Trump of putting Social Security "at grave risk" by delaying the collection of payroll taxes that pay for the program.
However, Senate Majority Leader Mitch McConnell said in a statement Saturday, “Struggling Americans need action now. Since Democrats have sabotaged backroom talks with absurd demands that would not help working people, I support President Trump exploring his options to get unemployment benefits and other relief to the people who need them the most.”
At an impasse
Negotiations between top congressional Democrats and the White House reached an impasse after nearly two weeks with the two sides about $2 trillion apart.
Speaker of the House Nancy Pelosi and Senate Minority Leader Chuck Schumer had offered to cut their $3.4 trillion aid package by almost one-third if the Republicans would double their $1 trillion counteroffer. That $1 trillion package faces opposition by about 20 of the Senate’s 54 Republicans.
“Today’s meager announcements by the President show President Trump still does not comprehend the seriousness or the urgency of the health and economic crises facing working families,” Pelosi and Schumer said in a statement Saturday.
“These policy announcements provide little real help to families. … Furthermore, these announcements do nothing to increase testing, nothing to reopen schools, nothing to put food on the table for hungry families, nothing to prevent heroes being laid off across state and local government, nothing to protect the Postal Service or the integrity of our elections, nothing on many critical needs of the American people.
The breakdown in the negotiations between the White House and congressional Democrats is particularly distressing for schools, which have been counting on billions of dollars from Washington to help with the costs of reopening. But other priorities, not addressed in Trump’s actions Saturday, are also languishing, including a fresh round of $1,200 direct payments to most people, a cash infusion for the struggling Postal Service and money to help states hold elections in November.
Four coronavirus rescue bills amounting to nearly $3 trillion all won bipartisan approval, but conservatives have recoiled at the prospect of another agreement with a whopping deficit-financed cost.