To make up for the $600 a week federal unemployment bonus that expired at the end of July, one of Trump’s executive orders extends the payment but reduces it to $300 a week. It also requires states to pay an extra $100 a week -- something many governors say they are unable to do.
Trump’s actions also continue some student loan relief and provide some help for renters, though they stop short of extending the moratorium on evictions, which also expired at the end of last month.
Also included in the executive orders was a payroll tax “holiday,” meaning the FICA portion of paycheck withholding would be reduced through the end of the year, giving people a little more money. Of course, FICA is the tax that funds Social Security and Medicare, and pausing the tax makes those programs’ deficits even deeper.
‘Absurdly unconstitutional’
Democrats denounced the move, with House Speaker Nancy Pelosi (D-Calif.) calling it “absurdly unconstitutional.” She and other Democrats point out that under the U.S. Constitution, only Congress has the power to spend taxpayer dollars.
The president’s executive orders are likely to be challenged in court, something the White House may not mind. After all, it’s an election year.
The question is how quickly a court might act. Judging by the court system’s normal speed, it could be several weeks before a ruling is made. In the meantime, unemployed Americans would receive at least $300 from the U.S. Treasury, along with their state unemployment benefit.
Stimulus payment not included
What is not contained in the executive orders is another direct stimulus payment to every American adult. Ironically, sending every American $1,200 is something that both Republicans and Democrats agree on.
The negotiations over a COVID-19 relief bill broke down largely because the two sides could not agree on the amount of the bonus unemployment payment. Democrats wanted to extend the $600 a week payments through January. Republicans held fast at $200 a week.
In addition, Democrats pushed for more aid to state governments -- something Republicans opposed -- and Republicans wanted reduced legal liability for businesses -- something Democrats opposed.