What Trump wants in the next stimulus package

President Donald Trump. TOLGA AKMEN/AFP/Getty Images
  • President Trump’s executive actions after stimulus talks lapsed address a payroll-tax deferral, extending the eviction moratorium, enhancing unemployment benefits, and relieving student-loan debt.
  • Each of these is an issue in congress’ ongoing negotiations for another stimulus, which have repeatedly broken down since late July.
  • The four actions taken by Trump – only one of which was an executive order – may not be constitutional because they would bypass congress’ taxation and spending powers.
  • One of the actions would cut off funding for Social Security and Medicare, two programs he vowed in his 2016 campaign not to touch. It has to do with the payroll tax, which Trump has repeatedly suggested cutting during the pandemic.
  • Trump’s memorandum on unemployment would effectively cut the program in place since March from a $US600 weekly bonus to $US400, while making states foot more of the bill.
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The federal government made history in March when it passed into law a $US2.2 trillion stimulus package that included an unprecedented expansion of unemployment benefits and a $US349 billion program for small-business lending.

The package, which also included $US1,200 checks sent to many Americans, was a success in keeping the economy afloat, Business Insider’s Joseph Zeballos-Roig and Carmen Reinicke reported. There’s just one problem: It expired in late July without a replacement in place, and as coronavirus cases began to spike again in late June, another looked necessary.

President Donald Trump reacted to the lapse in talks with executive actions, four of them, to be exact. Only one of the four actions was an executive order, meaning something the president can order to be done, and that had to do with a moratorium on evictions, as the previous moratorium lapsed with the last stimulus.

The other three actions were memoranda, which unlike executive orders do not require the president to assert what authority he is using. This may be related to Trump lacking the taxation and spending authority enjoyed by Congress for each of the measures he wants to see happen. Some critics, including House Speaker Nancy Pelosi, have already said his actions aren’t constitutional.

In the memoranda, Trump wants to replace the last stimulus’ expansion of unemployment, consisting of a $US600 federal bonus on top of state benefits, with a $US400 weekly boost, not all of which would come from the federal government (states would have to foot the bill for 25% of it).This memorandum also contemplates replacing the expanded unemployment with a “lost wages assistance” program.

Trump would also defer=”defer”collection of payroll taxes – not cut them – through the end of the year for Americans earning less than $US100,000 annually. Finally, his last memorandum ordered an extension of the 0% interest rate on federal student loans. Business Insider reported over the weekend that they might not do all that much because they will be so hard to implement, among other reasons.

What Trump has wanted in the next stimulus

Since Congress began debating stimulus measures amid the pandemic, Trump has been pushing to cut the payroll tax. While he has been short on specifics as to why he would cut it, the tax funds Social Security and Medicare, two major Democratic achievements from the 20th century that expanded the safety net for millions of Americans.

When Trump ran for president in 2016, he vowed not to touch Social Security or Medicare but has repeatedly taken aim at them, first in his White House budgets, and now with these executive actions.

Pelosi has also been calling for another stimulus package since March, but she wants to keep the payroll tax in place and go further than Trump’s executive actions on unemployment and other matters. She’s remained an advocate for another round of direct payments to Americans, similar to the $US1,200 checks sent out as part of the “phase-three” package.

By mid-May, Pelosi and House Democrats passed a stimulus package that amounted to $US3 trillion, which Senate Majority Leader Mitch McConnell said had “no chance of becoming law,” Business Insider reported.

Around the time Pelosi started calling for a new stimulus, in March, Trump advocated for a stimulus that was focused on infrastructure, tweeting in support of a $US2 trillion package. By June, however, reports indicated neither McConnell nor Trump wanted the next stimulus bill to exceed $US1 trillion.

About four weeks later, Trump suggested he would support federal aid for beleaguered state and city governments only in exchange for a relaxation of “sanctuary-city” policies. Trump has long sought to punish sanctuary cities and states that have policies to limit or refuse cooperation with the federal government’s immigration enforcement.

The White House has negotiated through both Treasury Secretary Steven Mnuchin and Chief of Staff Mark Meadows, both the AP and Washington Post reported, resulting in a lack of consistency in the talks with Pelosi.

Pelosi and Meadows had a phone call in late August which yielded no apparent breakthrough in the talks. “We’re not budging,”Pelosi told reporters.

“We have said again and again that we are willing to come down, meet them in the middle – that would be $US2.2 trillion,” Politico reported on remarks she made after her press conference. “When they’re ready to do that, we’ll be ready to discuss and negotiate. I did not get that impression on that call.”

Trump has largely come out against extending the $US600 unemployment bonus

On May 20, after the Heroes Act passed in the House, Trump joined the Republican chorus of voices opposing an extension of the $US600 bonus unemployment benefit, with large implications for the future of the American safety net. Trump and several senators and representatives have repeatedly rejected the idea as a disincentive for work since the third stimulus passed in March.

White House officials have advocated for various substitutes for the $US600 bonus. In the last week of May, Larry Kudlow, the director of the National Economic Council, proposed “back to work” cash bonuses for unemployed Americans. And in early June, The Wall Street Journal reported administration officials were weighing cutting the bonus from $US600 to $US250 or $US300 per week in a new bill, or setting it as a share of salaries.

Trump appeared to back off cutting the unemployment bonus in early August after congress was unable to pass a new stimulus before the prior one lapsed.

“We want to get funds to people so they can live, but we don’t want to disincentivize people,” he told Fox News.