Trump Signs Executive Orders Extending Coronavirus Economic Relief

Trump said his action authorizes the U.S. Treasury to allow companies to defer payroll taxes for Americans making less than $100,000 a year from Sept. 1 through Dec. 31. He said if he’s re-elected in November, he may extend the deferral and terminate the tax for some workers. ”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,” Senator Ron Wyden, the ranking Democrat on the Senate Finance Committee, said in a statement. “These workers would be hit with much bigger payments down the road.” Of the $3.7 trillion Congress has authorized for the coronavirus response, there is still $1.5 trillion yet to be spent or committed, according to an analysis from the Committee for a Responsible Federal Budget. The White House, though, has limited authority to redirect the unused money without Congress’s approval. Because the president can’t cut taxes on his own, Trump is simply delaying the due date for the payroll tax, which is paid jointly by employers and employees. The administration hopes employers will stop withholding the money from Americans’ paychecks, with voters in turn pressuring Congress to eventually pass legislation forgiving the accumulated amount. The president said another order would provide $400 a week in jobless benefits -- down from $600 weekly that had been provided through last week, authorized by a Congressional stimulus bill in March -- and that states would be responsible for covering 25% of the cost. The administration is directing states to use part of the $150 billion Coronavirus Relief Fund, while the federal government will tap on $44 billion of the existing $70 billion Disaster Relief Fund, said Andrew Husby, an economist for Bloomberg Economics. “Because the Trump plan taps a limited pool of existing funds to extend unemployment benefits at $400 per week, there is a high risk they run short ahead of the election,” Husby said. But employers may decide simply to do nothing in the face of uncertainty, fearing that if Congress fails to act, they could be stuck trying to claw back money from their employees to settle their obligations to the Internal Revenue Service. The president’s effort to unilaterally extend additional unemployment benefits to Americans after a $600 enhanced weekly benefit expired at the end of July may also face logistical challenges. Renewing the payments has been a key sticking point in negotiations on Capitol Hill. Democrats favored extending the $600 weekly amount through January or beyond, while Republicans sought a reduction, saying that the benefit was so generous that Americans were choosing not to return to work. “The temporary $400-a-week supplement on top of the traditional state benefits will help the unemployed, no doubt, but it means that more than half of the jobless will earn more unemployed than at work,” Representative Kevin Brady of Texas, the top House Ways and Means Committee Republican, said in a statement. “This maintains a serious barrier to reconnecting workers to their jobs.” The administration says that about $81 billion has yet to be spent and could be provided to unemployed Americans, though some states have already committed their funds for health care, distance learning and housing assistance. And even if states do use the money for an expanded unemployment benefit, it’s unlikely to match the previous $600. Some 10.2% of Americans are unemployed, a government report showed Friday. That’s just above the peak following the 2008 financial crisis, but a marked decline from almost 15% at the height of the pandemic. emergency relief for Americans with student loans. Subscribe to our YouTube channel: https://bit.ly/2TwO8Gm QUICKTAKE ON SOCIAL: Follow QuickTake on Twitter: twitter.com/quicktake Like QuickTake on Facebook: facebook.com/quicktake Follow QuickTake on Instagram: instagram.com/quicktake Subscribe to our newsletter: https://bit.ly/2FJ0oQZ Email us at [email protected] QuickTake by Bloomberg is a global news network delivering up-to-the-minute analysis on the biggest news, trends and ideas for a new generation of leaders.