Trump bypasses Congress, signs executive actions extending some coronavirus benefits

Seizing the power of his podium and his pen, U.S. President Donald Trump on Saturday moved to bypass the nation's elected lawmakers as he claimed the authority to defer payroll taxes and extend an expired unemployment benefit after negotiations with Congress on a new coronavirus rescue package collapsed.

At his private country club in Bedminster, N.J., Trump signed one executive order and three memorandums to act where Congress hasn't, contending Washington's gridlock had compelled him to act as the pandemic undermined the country's economy and imperilled his November re-election hopes.

Perhaps most crucially, Trump moved to continue paying a supplemental federal unemployment benefit for millions of Americans out of work during the outbreak. However, his action called for up to $400 US payments, one-third less than the $600 people had been receiving. Congress allowed those higher payments to lapse on Aug. 1, and negotiations to extend them have been mired in partisan gridlock, with the White House and Democrats miles apart.

House Speaker Nancy Pelosi and Senate minority leader Chuck Schumer dismissed Trump's actions as "meagre" in the face of economic and health crises facing Americans.

The executive actions could face legal challenges questioning the president's authority to spend taxpayer dollars without the express approval of Congress. 

Trump largely stayed on the sidelines during the administration's negotiations with congressional leaders, leaving the talks on his side to Mark Meadows, his chief of staff, and Treasury Secretary Steve Mnuchin.

Trump's embrace of executive actions to sidestep Congress runs in sharp contrast to his criticism of former president Barack Obama's use of executive orders on a more limited basis. And the president's step-back from talks with Congress breaks with his self-assured negotiating skills.

Now, Trump, who has not spoken with Pelosi since last year, sought to play the role of election-year saviour, with $400 in weekly assistance, as well as a deferral of payroll tax and federal student loan payments and the continuation of a freeze on some evictions during the crisis.

"It's $400 a week, and we're doing it without the Democrats," Trump said, asking states to cover 25 per cent of the cost. It was not immediately clear where the federal portion would come from — though the president suggested he was looking to use unspent funds from previous coronavirus relief bills — and Trump said it would be up to states to determine how much, if any of it, to fund.

The president said at his club on Friday night that "if Democrats continue to hold this critical relief hostage, I will act under my authority as president to get Americans the relief they need."

Democrats had said they would lower their spending demands from $3.4 trillion to $2 trillion but said the White House needed to increase its offer. Republicans have proposed a $1 trillion plan.

White House aides have watched the talks break down with apprehension, fearful that failure to close a deal could further damage an economic recovery already showing signs of slowing down. Friday's jobs report, though it beat expectations, was smaller than the past two months, in part because a resurgence of the virus has led to states rolling back their reopenings.

The president's team believes the economy needs to stabilize and show signs of growth for him to have any chance at winning re-election.

Aides were hoping to frame the expected executive signings as an indication that Trump was taking action in a time of crisis. But it also would reinforce the view that the president, who took office declaring he was a dealmaker, was unable to steer the process to an agreement.

Trump said Saturday the order and memorandums "will take care of pretty much this entire situation, as we know it." But they are far smaller in scope than congressional legislation, and even aides acknowledged they didn't meet the needs of all that was required.

"This is not a perfect answer — we'll be the first ones to say that," Meadows said Friday as talks broke down. "But it is all that we can do and all the president can do within the confines of his executive power, and we're going to encourage him to do it."

Trump said the employee portion of the payroll tax would be deferred from Aug. 1 through the end of the year. The move would not directly aid unemployed workers, who do not pay the tax when they are jobless, and employees will need to repay the federal government eventually without an act of Congress, where there is bipartisan opposition on Capitol Hill.

In essence, the deferral is an interest-free loan that would have to be repaid. Trump said he'll try to get lawmakers to extend it, and the timing would line up with a post-election lame-duck session in which Congress will try to pass government funding bills.

"If I win, I may extend and terminate," Trump said, repeating a longtime goal but remaining silent on how he'd fund the Medicare and Social Security benefits that the seven per cent tax on employee income covers. Employers also pay 7.65 per cent of their payrolls into the funds.

Senate majority leader Mitch McConnell issued a statement saying he supported Trump "exploring his options to get unemployment benefits and other relief to the people who need them the most." Like Trump, McConnell accused Democrats of using the coronavirus package negotiations to pursue other goals.

Democrats said they were not favourably impressed by Trump's actions. In a joint statement, Pelosi and Schumer said that "these policy announcements provide little real help to families." They added: "Democrats repeat our call to Republicans to return to the table, meet us halfway and work together to deliver immediate relief to the American people. Lives are being lost, and time is of the essence."

The Democratic chair of the tax-writing House ways and means committee, Rep. Richard E. Neal of Massachusetts, accused Trump of "brazenly circumventing Congress to institute tax policy that destabilizes Social Security." Also citing a threat to Medicare funding by Trump's action, Neal said, "This decree is a poorly disguised first step in an effort to fully dismantle these vital programs by executive fiat."

Democratic Sen. Ron Wyden of Oregon derided the president's plan for putting off the payroll tax. "This fake tax cut would also be a big shock to workers who thought they were getting a tax cut when it was only a delay," Wyden said. "These workers would be hit with much bigger payments down the road."

House, Senate members leave Washington

Both the House and Senate aren't sitting in Washington, with members sent home on instructions to be ready to return for a vote on an agreement. With no deal in sight, their absence raised the possibility of a prolonged stalemate that stretches well into August and even September.

Often an impasse in Washington is of little consequence for the public — but not so this time. It would mean more hardship for millions of people who are losing enhanced jobless benefits and further damage for an economy pummelled by the still-raging coronavirus.

Friday's negotiations at the Capitol added up to only "a disappointing meeting," said Schumer. He said the White House had rejected an offer by Pelosi to curb Democratic demands by about $1 trillion. Schumer urged the White House to "negotiate with Democrats and meet us in the middle. Don't say it's your way or no way."

That Capitol Hill session followed a combative meeting Thursday evening that for the first time cast real doubt on the ability of the Trump administration and Democrats to come together on a fifth COVID-19 response bill.

Pelosi declared the talks all but dead until Meadows and Mnuchin give ground.

The breakdown in the negotiations is particularly distressing for schools, which have been counting on billions of dollars from Washington to help with the costs of reopening. But other priorities are also languishing, including a fresh round of $1,200 direct payments to most people, a cash infusion for the struggling U.S. Postal Service and money to help states hold elections in November.