White House Attempts to Bypass Congress on Stimulus Measures

Chris Gaetano
Published Date:
Aug 10, 2020
White House

The president followed through on his threat to take unilateral action if Congress could not reach a deal on the next round of pandemic stimulus aid, issuing four executive orders that, at least some observers say, won't be very effective, if they're even legal.

The White House's executive orders, released on Saturday, would:

* Renew the extended unemployment benefits, but at $400 versus $600 a week, with states kicking in $100 to the federal government's $300;
* Delay payroll tax collection from Sept. 1 through Dec. 31 for those making under $104,000 a year (this would eventually need to be paid back under current law);
* Encourage top officials to "consider" halting evictions; and
* Defer student loan payments until Dec. 31.

The orders have sparked debate over their legality, said the Wall Street Journal, with congressional Democrats such as House Speaker Nancy Pelosi (D-Calif.), and even some Republicans, such as Sen. Ben Sasse (R-Neb.), condemning them as an unconstitutional usurpation of legislative authority. The administration, however, argues that its actions are within bounds; Treasury Secretary Steven Mnuchin said that the plan was cleared through the Office of Legal Counsel.

Furthermore, even if the orders are technically legal, they may not have as big an effect as the administration has touted. The New York Times noted that the expanded unemployment benefits won't work without sign-on from state governors, who may be hesitant to contribute the extra hundred dollars per person when they're seeing tax revenues fall precipitously. Also, given that the payroll tax deferral is only temporary (although the administration wants to explore legislation to make it a true cut), it is unknown how much relief it would provide, as employers may want to just hold on to the money, waiting for the day it must be paid back. Even were this not the case, a reduction in payroll taxes only assists people who are working, according to Diane Swonk, chief economist at Grant Thornton, quoted in MarketWatch. And that has not been the reality for the millions upon millions of people who have filed for unemployment benefits over the last few months.  Furthermore, as MarketWatch notes, the payroll tax break is not popular among either Republicans or Democrats in Congress, as these taxes fund the Social Security program.

All this would be moot if Congress can agree to a package of its own. CNBC said the White House remains open to further negotiations, and it is apparently willing to offer more money as a compromise.

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