Tag Archives: payroll tax cut

Explainer: Trump wants to bypass U.S. coronavirus aid talks with executive order. Can he?

By Patricia Zengerle

WASHINGTON (Reuters) – With congressional Democrats and White House negotiators so far unable to agree on a deal to salve the heavy economic toll of the coronavirus pandemic, President Donald Trump has threatened to bypass Congress with an executive order.

Some of his proposals exceed his legal authority and would face immediate legal challenges, though in at least one case House of Representatives Speaker Nancy Pelosi, the nation’s top Democrat, told him to just go ahead.

WHAT DOES TRUMP WANT TO DO?

Trump said on Twitter he is considering executive orders to continue expanded unemployment benefits, reinstate a moratorium on evictions, cut payroll taxes and continue a suspension of student loan repayments amid a health crisis that has killed nearly 160,000 Americans.

He and administration officials negotiating with Congress have not provided specifics.

CAN HE DO IT?

The Constitution puts control of federal spending in the hands of Congress, not the president, so Trump does not have the legal authority to issue executive orders determining how money should be spent on coronavirus.

Democrats said executive orders would prompt a court fight, but legal action could take months.

Trump has sidestepped Congress on spending before. In 2019, he declared a national emergency at the border with Mexico to shift billions of dollars from the Pentagon budget to help pay for a promised wall that was the cornerstone of his 2016 election campaign.

Congress passed legislation to stop him, but there were too few votes in the Republican-controlled Senate to override his veto.

“There has to be a political will to do that and there has to be a priority given by members of Congress to assert their institutional interests,” said Mark Rozell, dean of the Schar School of Policy and Government at George Mason University in Virginia. “And that just isn’t there right now.”

WOULD DEMOCRATS OR REPUBLICANS OBJECT?

The $600 per week enhanced unemployment benefit in the massive “Cares Act” passed in March has been a major sticking point in negotiations. Democrats want to continue the federal payment, which expired on July 24, to the tens of millions who have lost their jobs in the crisis and have rejected a short-term extension. Trump’s fellow Republicans have argued that is too high a payment, contending it is a disincentive to work.

The moratorium on evictions was less contentious, and could be covered by reprogramming money that Congress has already approved for housing that has not been spent. Pelosi on Thursday said an order extending the moratorium “would be a good thing.”

Congressional Republicans and Democrats alike reject cutting the payroll tax, which is collected from both employers and employees to fund Social Security and Medicare. A cut would disproportionately benefit Americans with high salaries, and threaten funding for the popular programs for retirees. It also only benefits people still getting paychecks, not those who have lost their jobs.

The parties are closer together on student loans. Democrats included a 12-month extension of the student loan payment suspension in a relief bill the House passed in May. Republican senators did not include student loan relief in the proposal they unveiled in July. However, there is a Republican plan in Congress to extend the suspension for three months.

(Reporting by Patricia Zengerle; Editing by Scott Malone and Nick Zieminski)

Coronavirus talks in Congress face timeline as Trump ponders his own action

By Patricia Zengerle and Susan Cornwell

WASHINGTON (Reuters) – Congressional Democratic leaders and White House officials were set to resume negotiations on coronavirus relief legislation on Wednesday, with the administration officials aiming for an agreement by Friday.

After more than a week of talks and few signs of progress, Treasury Secretary Steven Mnuchin, White House Chief of Staff Mark Meadows, House of Representatives Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer were said to be aiming for a deal that could be passed by Congress next week.

“Obviously, we’re up against a deadline now. But as you know from experience around here, that’s about the only way,” Senator John Thune, the chamber’s No. 2 Republican, told reporters.

Indeed, negotiators have already blown past one deadline: last Friday, when enhanced unemployment payments of $600 a week expired for the tens of millions of Americans who have lost their jobs in the pandemic.

Mnuchin said late on Tuesday that the two sides were trying to reach an overall agreement by the end of this week.

But Pelosi said on Wednesday that the timeline would depend on the course of the negotiations.

“The timetable really relates to the progress we make. How big will the bill be and how long will it last? Those are the questions,” the Democratic congresswoman told MSNBC.

In the meantime, Republican President Donald Trump said he was still considering unilateral action to stimulate the economy by allowing taxpayers to defer payroll tax payments.

“Well, I may do it myself,” he said in an interview with Fox News. “I have the right to suspend it, and I may do it myself – I have the absolute right to suspend the payroll.”

An earlier Trump demand for a payroll tax cut gained no traction among lawmakers of either party in Congress.

POSTAL WOES

Trump’s newly installed Postmaster General, Louis DeJoy, was also due to provide Democrats with a briefing, amid worries about delays in Postal Service deliveries and the potential impact on the Nov. 3 elections, which could see record numbers of mail-in ballots as many voters fear casting votes in person could expose them to the coronavirus.

“We must resolve those in a way that allows mail to be delivered on time for the election and for the necessities that people need,” Schumer said on the Senate floor.

To illustrate the scale of mail-in voting expected, a Monmouth University poll found that 40% of Iowa voters are very likely to vote by mail in the general election, while another 17% are somewhat likely to do so.

Despite some progress in coronavirus legislation talks, both sides remain far apart on a range of issues.

Mnuchin warned that the Trump administration would not accept “anything close” to the $3.4 trillion in new aid that Democrats were seeking. But he offered to extend through the end of the year an expired moratorium on evictions of people unable to pay their rent.

Schumer accused Republicans of failing to grasp the severity of the pandemic, which has killed more than 157,000 people in the United States.

“There must be a relief package commensurate with the size of this historic challenge,” the New York Democrat said.

Senate Majority Mitch McConnell, the chamber’s top Republican, who has not joined the negotiations, blamed Schumer and Pelosi for the lack of a deal: “Democratic leaders have moved about one inch, one inch in eight days.”

In May, the Democratic-controlled House passed a $3 trillion aid bill that included around $1 trillion to help state and local governments that have revenue shortfalls because of the huge slowdown in economic activity related to the pandemic.

McConnell has offered a $1 trillion proposal that would significantly reduce an “enhanced” jobless benefit that expired on Friday.

Both sides say they support another round of direct payments to further help stimulate the economy and keep people afloat amid massive unemployment.

(Reporting by Patricia Zengerle, Susan Cornwell and Richard Cowan, Writing by David Morgan; Editing by Scott Malone and Jonathan Oatis)