Flaws in Trump’s executive orders after break down of Congress’ coronavirus package

3 mins read

Trump’s executive orders to deal with the absence of a second stimulus package comes with strings attached.

Monday starts a month-long summer recess for the Senate in a serious economic crisis in the country. Still, Congress has not passed a stimulus package, and Republicans and Democrats are at odds as to the terms of the second wave of relief. Because Congress could not reach a deal, President Donald Trump signed four executive orders. However, some parts of the bills draw more concern than relief.

1. Federal unemployment benefits extend, but instead of $600 weekly, the amount will be $400.

On the surface, it seems like a win for the millions scraping to get by after losing their jobs during the coronavirus pandemic. However, in the executive order, states must enter into an agreement with the federal government to pay 25 percent on each dollar from their CARES package, or money from the first coronavirus stimulus bill. The problem is that many states do not have the money and might decline.

Another issue is that it is unclear where the Trump Administration will get the other 75 percent. Congress votes on how federal money is spent, and by law, it is illegal for the president to use that money without it being passed in Congress. Even in times of an emergency, a president cannot simply go into the federal coffers and spend money as they see fit. On the other hand, they can enact embargoes or stop something, but not cash out.

This issue is somewhat similar to his misuse of power in the Ukraine debacle where he stopped money that Congress already passed to be allotted in aid.

2. Extend waivers on student loan deferments of payments interest and penalty fees. until the end of the year.

Suspending loan payments and temporarily setting interest rates to 0 percent will only be for 60 days after the initial end-date of September 30. While this provides temporary relief, it does not address the overarching issue of many people with high student loan debt could not pay it before the crisis, and definitely will not afterwards.

In May, Trump vetoed a major student loan forgiveness bill passed by the House. The House passed legislation to overturn a rule drafted by Secretary of Education Betsy DeVos and the U.S. Education Department, but Trump vetoed it. In turn, House Democrats did not have the votes to override Trump. For student loan payers, this should cause concern because starting January 1, 2021, students must pay on loans even if they do not have a job or have jobs that cannot make monthly payments.

As well, there are concerns that this “relief” will be considered as the only major move to address student loan debt; thus, it will not be included in the stimulus package when Congress returns. By the way, Devos dropped Navient and Greats left as main agencies handling the debt. DeVos office claimed that it wants to streamline the system more. “We are frustrated and disappointed by this decision and the lack of transparency in the process and will pursue every legal avenue available to ensure that students have the high quality service they’ve come to expect from us,” said Nelnet CEO Jeff Noordhoek in an issued statement.

| Read: Student loan debt bubble with pop sooner or later  |

3. Defer employee payroll taxes for households making less than $100,000.

The issue of stopping payroll taxes, like the weekly federal unemployment appears to benefit the worker. Subsequently, it leads to bankrupting the state. Each state depends on payroll taxes to help fund education, healthcare, state parks, transportation and corrections. Without payroll taxes in fiscally stressed states, local services will literally come to a halt. Included, those essential workers like sanitation workers and teachers will be out of jobs, the same jobs that recycle money back into the state economy.

As well, no payroll taxes means the stoppage of Social Security, Medicare, and other social insurance benefits. Even defense and security get bankrolled by federal payroll taxes. Inevitably, the stoppage can upend pensions, the healthcare systems and other social programs that most Americans rely on.

4. Enact resources to renters to stop evictions and foreclosures for homeowners.

While this seems like it provides an across-the-board moratorium on paying rent, and sets up homeowners to keep their properties, the order will only help some, and not most Americans. Why? Because there is no rental assistance for renters, and no assistance in paying the mortgage for homeowners.

The order states that the Feds will “identify any and all available Federal funds to provide temporary financial assistance to renters and homeowners who, as a result of the financial hardships caused by COVID-19, are struggling to meet their monthly rental or mortgage obligations.” But, they cannot use money not approved by Congress. So any language about providing assistance simply cannot be done without Congress, a Congress that is now on summer recess.

Another part of the order states that they will “encourage . . . public housing authorities, affordable housing owners, landlords, and recipients of Federal grant funds in minimizing evictions and foreclosures.” Renters and homeowners do not need cheerleaders, they need help.Most importantly, local officials still can carry out evictions. 

In the next weeks, how the executive orders will be carried out are key during a time where Trump suggests that the states with the high death numbers are poorly-run Democratic states that do not need bailouts.

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