Trump Eyes Executive Orders on Coronavirus Relief

Trump Eyes Executive Orders on Coronavirus Relief

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Plus, can Trump suspend payroll tax collections?
Monday, August 3, 2020

With Congress at a Stalemate, Trump Says He’s Considering Executive Orders on Coronavirus Relief

Negotiators emerged from about two hours of talks Monday on the next coronavirus relief package calling their discussions productive but sounding like a deal remains a long way away.

"It was productive. We are moving down the track. We still have our differences. We are trying to have clearer understanding of what the needs are," House Speaker Nancy Pelosi (D-CA) told reporters.

Senate Minority Leader Chuck Schumer similarly said the two sides were making some progress, though many differences remain.

"What we did today, to give you a little flavor of it is we went through the numbers in the proposal that the Senate put forth and the proposal that we had," Schumer said. "How many children can you feed with this amount of dollars for how long? How many schools can you protect with this amount of dollars so that they can open up when?"

Pelosi and Schumer told reporters that the parties were sticking to their divergent positions on the question of renewing a federal enhancement of unemployment insurance. Democrats have called for a longer-term extension of a $600 federal boost to weekly unemployment payments. Republicans have proposed reducing the supplemental payments to around $200, but have reportedly also floated shorter-term extensions of the $600 boost.

Pelosi on Monday told CNN that the $600 level could be tied to unemployment levels. "If the unemployment goes down, then that number can go down, but it doesn’t go down -- you know, you’re not saying to the American people, ‘We have more infections, more deaths, we have more unemployment, we have more hunger, and now we’re going to cut your benefit,’" she said.

Politico reports that Pelosi told fellow House Democrats on a conference call later Monday that the talks may drag on until next week. "It is my hope we could do it this week...but probably not until next week," Pelosi said.

When asked if a comprehensive deal could wind up topping the $1 trillion mark, White House Chief of Staff Mark Meadows said the two sides are "so far apart right now that’s not even a valid question."

Trump exploring executive orders:
With negotiations so far yielding little progress, President Trump said Monday he’s looking at taking executive action to stop tenant evictions. "A lot of people are going to be evicted but I’m going to stop it because I’ll do it myself if I have to," Trump told reporters at an event at the White House. "I have a lot of powers with respect to executive orders and we’re looking at that very seriously right now."

But The Washington Post reports it’s not clear what steps Trump could take to revive an expired moratorium on evictions or a lapsed federal boost to unemployment insurance. Other executive actions reportedly could defer the collection of payroll taxes (see more below) or extend a moratorium on student loan payments.

Conservatives Call for Trump to Suspend Payroll Tax Collections

In a Sunday op-ed in The Wall Street Journal, Stephen Moore, a member of the White House’s economic recovery task force, called for President Trump to "pull an end run" around Congress, declare a national economic emergency and suspend the collection of payroll taxes. Trump has repeatedly pushed for a payroll tax cut, but the idea ran into bipartisan resistance on Capitol Hill and the cut was not part of the Senate Republican coronavirus relief plan released last week. Some analysts have said that such a cut would not help workers who have lost their jobs.

Moore and co-author Phil Kerpen argue that the deferral of payroll tax collections would leave workers on the hook to pay those taxes down the line, but that "Trump could also pledge to sign a bill—now or after the new Congress takes office on Jan. 3—to forgive those repayments. That would make the election a referendum on middle-class taxes. Mr. Trump can give Americans a tax cut now, and sign it into law later." They suggest that Trump could cap the tax deferral at $75,000 of income to target the benefits to lower- and middle-income workers.

But tax experts told Politico that the proposal from Moore and Kerpen, even if it is legal, might not play out the way the authors suggest. The Treasury Department may not be able to mandate that businesses actually pass the deferred tax money on to employees.
"Cautious employers will continue to withhold payroll taxes from their employees’ paychecks because if the subsequent tax forgiveness bill does not go through, employers face potential liability for the full amount of payroll taxes (even their employees’ portion)," Andy Grewal, a University of Iowa law professor, told Politico in an email. "What the authors want requires legislative attention."

Fed Official: Shut Down, Spend Big

The president of the Minneapolis Federal Reserve Bank said Sunday that the U.S. should "lock down really hard" for a few weeks in order to get control of the coronavirus and create the conditions for a more robust economic recovery. In the meantime, Congress should provide all the money that’s necessary to assist workers and businesses hurt by the shutdown.

Appearing on CBS’s "Face the Nation," Kashkari said the recent surge in national savings, combined with historically low interest rates, means that increased deficit spending can be funded domestically, without relying on foreign investors. "Those of us who are fortunate enough to still have our jobs, we’re saving a lot more money because we’re not going to restaurants or movie theaters or vacations," he said. "That actually means that we have a lot more resources as a country to support those who have been laid off."

The price of not doing so will be high, Kashkari warned. "If we don’t do that and we just have this raging virus spreading throughout the country with flare-ups and local lockdowns for the next year or two, which is entirely possible, we’re going to see many, many more business bankruptcies," he said.

Asked about concerns over rising debt levels, Kashkari took a different tack than Treasury Secretary Steven Mnuchin, who on Sunday said that "we have to be careful about not piling on enormous amount of debts for future generations." By contrast, Kashkari said, "I’m not worried about it. Congress should use this opportunity to support the American people and the American economy. If we get the economy growing, we will be able to pay off the debt."

CEOs Call for More Federal Aid for Small Business

Dozens of corporate leaders led by Starbucks founder Howard Schultz are pleading with Congress to provide more support for America’s small businesses.

In a letter to top lawmakers Monday, Schultz and his co-signers said most small businesses lack the cash to survive the current slowdown, which could last for many more months. The group called for a variety of new programs, including flexible, guaranteed loans; a loan forgiveness program; and special assistance for minority-owned businesses.

"We cannot stress enough the urgent need to act," the letter said. "Every day that passes without a comprehensive recovery program makes recovery more difficult. By Labor Day, we foresee a wave of permanent closures if the right steps are not taken soon. ... By year end, the domino effect of lost jobs—as well as the lost services and lost products that small businesses provide—could be catastrophic."

Number of the Day: $192 Million to $419 Million

Via Alan Rappeport of The New York Times: "According to a review of publicly available loan data by the strategy consulting firm Horizon Advisory, $192 million to $419 million has gone to more than 125 companies that Chinese entities own or invest in. Many of the loans were quite sizable; at least 32 Chinese companies received loans worth more than $1 million, with those totaling as much as $180 million."

Where Is Trump’s Health Care Plan?

In an interview with "Fox News Sunday" host Chris Wallace on July 19, President Trump said that he would be "signing a health-care plan within two weeks, a full and complete health-care plan." Two weeks have come and gone and Trump hasn’t released let alone signed a "full and complete health-care plan," of course. There’s no indication that the administration has such a comprehensive plan.

Trump reiterated that a plan was coming in an exchange with reporters on Friday, The Washington Post reports: "We’re going to be doing a health-care plan. We’re going to be doing a very inclusive health-care plan. I’ll be signing it sometime very soon," he said. When a reporter noted Trump’s earlier comments that he’d sign a plan in two weeks, Trump added: "Might be Sunday. But it’s going to be very soon." On Monday afternoon, he said the plan will come "hopefully prior to the end of the month."

Sen. Lindsey Graham told the Post that Trump’s plan would actually be a "fairly comprehensive" executive order. But as the Post points out, an executive order, even a broad one, would fall short of the full and complete plan Trump said is on the way.

As numerous analysts and commentators have noted, Trump’s failure to produce such a health-care plan continues a pattern of unfulfilled policy promises. "The truth is, when Trump is stumped, he likes to throw out promises of big policy initiatives — his infrastructure push, for instance — that always seem to be just two weeks away," Washington Post columnist Karen Tumulty writes. "They are mirages. His assumption is that people will just forget about them as they choke on the dust cloud of distraction that he kicks up every day."
"Infrastructure week" may have become a Washington, D.C., punchline, but those empty promises may be most noticeable — and most meaningful to the American public — when it comes to health care.

"President Trump has repeatedly vowed to repeal the ACA and is urging the Supreme Court to overturn it. He has never offered a replacement plan," Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation, a nonpartisan nonprofit, said in a tweet Sunday. "His latest budget includes a vision for reform with few details that would cut federal health spending by $844 billion over a decade."

White House Press Secretary Kayleigh McEnany noted in a statement to the Post that Trump had issued four executive orders on drug prices last month and that there will be "more action" ahead. The president, she said, "continues to act in delivering better and cheaper health care, protecting Americans with preexisting conditions, lowering prescription drug costs, and defending the right of Americans to keep their doctors and plans of their choice." Trump was expected to sign another executive order Monday afternoon aimed at improving health care and telemedicine in rural areas.

But, as the Post’s Anne Gearan, Amy Goldstein and Seung Min Kim suggest, Trump’s repeated promises of a broader Obamacare replacement carries some political risk: "Although it may appeal to voters who don’t like the ACA, it also highlights his party’s inability to come up with an alternative, despite spending almost a decade promising one. It also raises questions about what exactly his plan would look like and whether it would cover fewer Americans than the current system as the pandemic ravages the country."

Leaving those questions unanswered may be Trump’s real health-care plan for now.

Hospitals Lobby for Relief on Pandemic Loans

The Washington Post’s Paige Winfield Cunningham reports that, starting this week, hospitals will have to start paying back billions in federal loans they received to help get them through the early surge of the pandemic, when they had to cut back other services. "But hospitals say the repayments, which are to be docked from their regular Medicare payments until they're fully paid back, could put rural and low-income-serving facilities underwater particularly in areas where the coronavirus continues to surge," Winfield Cunningham writes.

Hospitals are lobbying to have loan relief included in the next coronavirus package. "Congress probably won’t entirely forgive their loans, which span tens of billions of dollars. But there’s a good chance it will delay when hospitals have to start repaying them, spread out the repayments over a longer time, reduce the loan interest rate — or some combination thereof," Winfield Cunningham says.

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