By Robert A. Vella
Shortly after negotiations broke down between Congress and the White House concerning additional financial aid to ease the economic hardships triggered by the coronavirus pandemic, President Trump issued executive orders which he had planned since early July when COVID-19 infections and deaths resurged across the nation. Those negotiations were doomed from the start because Senate Republicans were irreconcilably divided and Trump was determined to bully congressional Democrats into submission. When Dems held firm, as he anticipated, Trump unleashed his brazenly unconstitutional plan.
If the four executive orders issued yesterday were genuinely intended to help the tens of millions of laid-off workers struggling to survive, the thousands of small family-owned businesses at or near bankruptcy, virtually all state and local governments facing catastrophic budget shortfalls, and the severely overstressed healthcare system still in a death-grip fight against the contagion, then Americans might be willing to forgive Trump’s authoritarian power ploy. But, those are not his intentions. Donald Trump doesn’t care for anyone or anything other than his own perceived self-interest – that is, getting reelected. What he is really doing here is playing pure hardcore politics; and, had he restrained his ambitions just a little, it might have worked.
From a strategic perspective, Trump’s aims are obvious:
- To give Americans the impression that he is trying to help them even though the substance of his executive actions either provide very little financial assistance or are nothing but a diversionary smokescreen.
- To relieve intense political pressure on vulnerable Republican senators up for reelection this year.
- To goad Democrats into challenging his executive orders in court so that he can blame them for the economic misery Americans will continue to experience in the weeks and months ahead.
- To finally achieve the decades-long GOP desire to destroy the Social Security program, which was enacted during the FDR administration, by cutting or eliminating its source of funding (i.e. payroll taxes).
The last goal is where Trump overreached most blatantly and where his plan is doomed to fail. Social Security is a very popular program especially among seniors and retirement-conscious people. Whenever Republicans have tried to cut it in the past, they were forced to back-down from a torrent of angry voters. Such voters, by the way, constitute the bulk of the GOP base. If he loses more support than he already has, then his defeat in November would be assured. Trump’s only hope to avoid a huge public backlash is to deceive Americans about his actual intentions. I don’t think it will succeed.
Here’s the news:
President Trump on Saturday attempted to bypass Congress and make dramatic changes to tax and spending policy, signing executive actions that challenge the boundaries of power that separate the White House and Capitol Hill.
At a news event in Bedminster, N.J., Trump said the actions would provide economic relief to millions of Americans by deferring taxes and, he said, providing temporary unemployment benefits. The measures would attempt to wrest away some of Congress’s most fundamental, constitutionally mandated powers — tax and spending policy. Trump acknowledged that some of the actions could be challenged in court but indicated he would persevere.
Trump bemoaned how Democrats had refused to accept his demands during the recent negotiations but attempted to brush it aside, saying four measures he signed Saturday “will take care of pretty much this entire situation.”
But there were instant questions about whether Trump’s actions were as ironclad as he made them out to be. A leading national expert on unemployment benefits said one of the actions would not increase federal unemployment benefits at all. Instead, the expert said it would instead create a new program that could take “months” to set up. And Trump’s directive to halt evictions primarily calls for federal agencies to “consider” if they should be stopped.
Trump also mischaracterized the legal stature of the measures, referring to them as “bills.” Congress writes and votes on bills, not the White House. The documents Trump signed on Saturday were a combination of memorandums and an executive order.
One of the measures Trump signed on Saturday aims to provide $400 in weekly unemployment aid for millions of Americans. Trump said 25 percent of this money would be paid by states, many of which are already dealing with major budget shortfalls. The federal contribution would be redirected from disaster relief money at the Federal Emergency Management Agency. Those funds are not likely to last more than two months, and Trump would not say when the benefits would kick in.
Another document signed by Trump on Saturday attempts to defer payroll tax payments from September through December for people who earn less than $100,000. The impact of this measure could depend on whether companies decide to comply, as they could be responsible for withdrawing large amounts of money from their employees’ paychecks in a few months when the taxes are due.
The president said that if he wins reelection, he would seek to extend the deferral and somehow “terminate” the taxes that are owed. He also dared presumptive Democratic presidential nominee Joe Biden to try to recoup those tax dollars if elected in November. The payroll tax funds Social Security and Medicare benefits, and it’s unclear where those programs will get funding if the taxes are deferred.
Two of the other executive actions are related to eviction protections and student loan relief. The plan related to housing only makes suggestions to federal agencies but does not halt evictions nationally. The measure on student loans aims to extend the relief granted by Congress in March through the end of the year.
Trump lashed out at mega-donor Sheldon Adelson [for not contributing more to his reelection campaign] in a recent phone call, prompting panicked Republican Party officials to try and deescalate the situation
Former Vice President Joe Biden on Saturday called President Trump’s executive order to cut payroll taxes “a reckless war on Social Security.”
One of the several orders Trump signed from his private club in Bedminster, N.J., Saturday afternoon directs the Treasury Department to allow employers to defer payment of employee-side Social Security payroll taxes through the end of the year for Americans making less than roughly $100,000 annually.
Trump also said that he intends to forgive the deferred payroll taxes and make permanent payroll tax cuts if he is reelected in November.
In an emailed statement addressing the president’s order, Biden said that such a move would “undermine the entire financial footing of Social Security.”
The presumptive Democratic nominee said that unlike the 2012 payroll tax plan put forth by the Obama administration, Trump’s executive order does not appear to include “protections or guarantees that the Social Security Trust Fund will be made whole.”
“He is laying out his roadmap to cutting Social Security,” Biden said. “Our seniors and millions of Americans with disabilities are under enough stress without Trump putting their hard-earned Social Security benefits in doubt.”
The executive actions President Trump took on Saturday were pitched as a unilateral jolt for an ailing economy. But there is only one group of workers that seems guaranteed to benefit from them, at least right away: lawyers.
Mr. Trump’s measures include an eviction moratorium, a new benefit to supplement unemployment assistance for workers and a temporary delay in payroll tax liability for low- and middle-income workers. They could give renters a break and ease payments for some student loan borrowers. But they are likely to do little to deliver cash any time soon to Americans hit hard by the recession.
Even conservative groups have warned that suspending payroll tax collections is unlikely to translate into more money for workers. An executive action seeking to essentially create a new unemployment benefit out of thin air will almost certainly be challenged in court. And as Mr. Trump’s own aides concede, the orders will not provide any aid to small businesses, state and local governments or low- and middle-income workers.
If the actions signal the death of a congressional deal to provide that aid, economists warn, the economy will limp toward November without the fiscal support that hastened its recovery after its quick dive into a pandemic-induced recession.