BEDMINSTER, N.J. -- President Donald Trump on Saturday seized the power of the podium and his pen to defer payroll taxes and replace an expired unemployment benefit after negotiations with Congress on a new coronavirus rescue package collapsed.
At his private country club in Bedminster, Trump signed executive orders to act where Congress hasn't.
Trump also moved to continue paying a supplemental federal unemployment benefit for millions of Americans out of work during the outbreak. His order called for up to $400 payments each week, one-third less than the $600 people had been receiving.
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Congress allowed those higher payments to lapse on Aug. 1, and negotiations to extend them have been mired in partisan gridlock, with the White House and Democrats miles apart.
The executive orders could face legal challenges questioning the president's authority to spend taxpayer dollars without the express approval of Congress.
Some experts have said the president has no legal basis to unilaterally extend unemployment benefits. The president Saturday told reporters, "We have a lot of money that was unspent," referring to the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.
"States cannot pay unemployment insurance benefits in a way that has not been authorized by Congress through enactment of legislation," said Michele Evermore, an unemployment insurance expert at the National Employment Law Project. "By definition, states' administration of unemployment insurance must conform to federal law -- and there is no federal law on the books allowing for an additional sum."
Trump largely stayed on the sidelines during the administration's negotiations with congressional leaders, leaving the talks on his side to White House Chief of Staff Mark Meadows and Treasury Secretary Steve Mnuchin.
In addition to the $400 weekly assistance and deferral of payroll tax, the executive orders addressed federal student loan payments and the continuation of a freeze on some evictions during the crisis.
"It's $400 a week, and we're doing it without the Democrats," Trump said, asking states to cover 25% of the cost. Trump is seeking to set aside $44 billion in previously approved disaster aid to help states maintain supplemental pandemic jobless benefits, but Trump said it would be up to states to determine how much, if any of it, to fund, so the benefits could be smaller still.
Arkansas Gov. Asa Hutchinson did not immediately weigh in on Trump's actions.
"The governor will be reviewing the orders over the weekend and have comments on Monday," his spokeswoman, Katie Beck, said.
Many states have been facing budget shortfalls because of the coronavirus pandemic and could have difficulty assuming the new obligation. The previous unemployment benefit was fully funded by Washington.
The president said at his club 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 $3.4 trillion to about $2 trillion but said the White House needed to increase its offer. Republicans have proposed a $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.
Trump said Saturday that 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 that they didn't meet all needs.
"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."
PAYROLL TAX
Trump said the employee portion of the payroll tax would be deferred from Aug. 1 through the end of the year for people who earn less than $100,000. The move would not directly aid unemployed workers, who do not pay the tax when they are jobless, and employees will need to repay the federal government eventually without an act of Congress, where there is bipartisan opposition on Capitol Hill.
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.
In essence, the deferral is an interest-free loan that would have to be repaid. Trump said he'll try to get lawmakers to extend it, and the timing would line up with a postelection lame-duck session in which Congress will try to pass government funding bills.
"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% tax on employee income covers. Employers also pay 7.65% of their payrolls into the funds.
Senate Majority Leader Mitch McConnell, R-Ky., who mostly stayed out of the recent negotiations between the White House and Democrats, praised Trump's move.
"Struggling Americans need action now," he said in a statement. "Since Democrats have sabotaged backroom talks with absurd demands that would not help working people, I support President Trump exploring his options to get unemployed benefits and other relief to the people who need them the most."
Like Trump, McConnell accused Democrats of using the coronavirus package negotiations to pursue other goals.
The Democratic chairman of the tax-writing House Ways and Means Committee, Rep. Richard E. Neal of Massachusetts, accused Trump of "brazenly circumventing Congress to institute tax policy that destabilizes Social Security." Also citing a threat to Medicare funding by Trump's action, Neal said, "This decree is a poorly disguised first step in an effort to fully dismantle these vital programs by executive fiat."
Democratic Sen. Ron Wyden of Oregon derided the president's plan for putting off the payroll tax. "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."
IMPASSE BODES ILL
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 this time. It bodes 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 Charles Schumer of New York. He said the White House had rejected an offer by House Speaker Nancy 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.
Pelosi declared the talks all but dead until Meadows and Mnuchin give ground.
The breakdown in the negotiations 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 are also languishing, including a fresh round of $1,200 direct payments to most people, a cash infusion for the struggling U.S. Postal Service and money to help states hold elections in November.
Mnuchin said renewal of a $600-per-week pandemic jobless boost and demands by Democrats for aid to state and local governments are the key areas where they are stuck.
Democrats have offered to reduce their almost $1 trillion demand for state and local governments considerably, but some of Pelosi's proposed cost savings would accrue chiefly because she would shorten the time frame for benefits like food stamps.
Pelosi and Schumer continue to insist on a large aid package to address a surge in cases and deaths, double-digit joblessness and the threat of poverty for millions of the newly unemployed.
Senate Republicans have been split, with roughly half of McConnell's rank and file opposed to another rescue bill. Four previous coronavirus response bills totaling almost $3 trillion have won approval on bipartisan votes despite intense wrangling, but conservatives have recoiled at the prospect of another Pelosi-brokered agreement with a whopping deficit-financed cost.
McConnell has kept his distance from the negotiations while coordinating with Mnuchin and Meadows.
GLOBAL VIRUS NEWS
In other virus-related developments:
• Kentucky is reporting an increase of 801 cases of covid-19, including 29 cases in children ages 5 or younger.
• Arizona health officials Saturday reported 1,054 new confirmed coronavirus cases and 56 more deaths. Also, Arizona's second-most-populous city plans to use $4.5 million of federal pandemic aid to expand free public Wi-Fi into areas of Tucson most affected by the digital divide.
• Masks and social distancing will be required when Maine holds its first murder trial since the coronavirus pandemic crippled much of the U.S. legal system this spring. The Bangor Daily News reports that jurors, lawyers and the judge will all wear masks. Jurors will sit in the gallery instead of the jury box so they can sit 6 feet apart. Members of the public, including reporters and family members of the victim, will sit in a separate room to watch a live video stream of the trial.
• South Africa's number of confirmed coronavirus deaths has surpassed 10,000. The Health Ministry says the country with the world's fifth-largest caseload now has 553,188 cases and 10,210 deaths.
• Brazil is approaching the grim milestone of 100,000 confirmed deaths from covid-19. That comes five months after the first reported case in a nation of 210 million people, which has not shown signs of slowing the disease.
Italy added another 347 coronavirus infections to its official tally, a day after it surpassed the 500-case barrier for the first time since late May. Italy had 552 confirmed cases Friday. With Saturday's update from the health ministry, Italy's daily caseload returns to the 200-300 range of new infections it has maintained for the past several weeks. Government officials have urged Italians to keep their guard up, given Spain, France and Germany have seen daily infections top the 1,000-mark recently after the easing of virus lockdown measures.
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Germany and France have challenged Washington's role in leading talks over changing the World Health Organization, citing the U.S. decision to quit the global body. Germany's Health Ministry said the issue was discussed during a call of health ministers from the Group of Seven leading economies Thursday.
In a statement Saturday, the ministry said that in view of the United States' withdrawal from WHO, "Germany and France currently see no mandate for the U.S. to lead the WHO reform process for the G-7."
[DOCUMENT: Memorandum on deferring payroll tax obligations » arkansasonline.com/89payrolltax/]
[DOCUMENT: Executive order to aid renters and homeowners » arkansasonline.com/89renters/]
[DOCUMENT: Memorandum on student loan payment relief » arkansasonline.com/89loans/]
Information for this article was contributed by Johnathan Lemire, Zeke Miller and Andrew Taylor of The Associated Press; by Jeff Stein and Erica Werner of The Washington Post; and by Frank E. Lockwood of The Arkansas Democrat-Gazette.
