WASHINGTON -- President Donald Trump's executive actions to disburse coronavirus relief without Congress sparked confusion and frustration Sunday among businesses, Democrats and state officials, some of whom lamented that the moves would not deliver the necessary relief to cash-strapped Americans.
Trump's directives were aimed at offering new unemployment benefits, protecting renters from eviction and postponing the payment of a federal tax. But an array of economists and lawmakers depicted these policies as incomplete, unworkable or legally questionable -- raising the prospect that the president's attempt to boost the economy may have a muted impact.
One of the orders allows employees making less than $104,000 to delay until January the payment of a payroll tax that funds Social Security and Medicare. Trump added that he would try to change federal rules next year to make the deferred payments into a permanent tax cut -- but only if he is reelected.
[Video not showing up above? Click here to watch » https://www.youtube.com/watch?v=WvG7AtJZWow]
The tax typically is taken out of paychecks by employers. And businesses, payment processors and economists signaled Sunday that in the absence of a guarantee that the payroll taxes actually will be absolved, businesses would be unlikely to alter worker paychecks.
"It's a little bit of a leap of faith on an employer's part," said Pete Isberg, vice president of government affairs for ADP, which processes payments for 40 million workers and 800,000 businesses.
[Video not showing up above? Click here to watch » https://www.youtube.com/watch?v=iTRulNs_mLg]
Isberg said it may take months for some businesses to implement a system that can defer payroll taxes for a few months, delaying any potential boost to the economy. "It's not clear employers broadly will adopt this," he added. "It's not clear employees will want to take it even if they qualify."
"I think what most employers are going to do is not pass this on to their employees," added Josh Bivens, director of research at the left-leaning Economic Policy Institute. "They're not going to give money to the worker, because the government is at some point going to come back for it."
'BAND-AID' DECRIED
Unable to swing a deal with Democrats, Trump resorted to executive actions as concerns in Washington intensified about the economic distress and the political fallout caused by the pandemic.
"The Lord and the Founding Fathers created executive orders because of partisan bickering and divided government," White House economic adviser Peter Navarro said Sunday on NBC.
But Trump's attempts to circumvent the logjam on Capitol Hill instead may be illustrating the limits of executive power -- and the costs that can come from invoking it. In this case, a more long-lasting legislative solution may have been delayed with the White House deciding to act on its own, said Daniel Hemel, a law professor at the University of Chicago.
"It's a Band-Aid on an open wound," he said Sunday. Trump "can do it, legally, but to provide real lasting relief he needs help from Congress -- and if anything, he made that less likely yesterday [Saturday]. Most of us won't see more money in our paychecks, and the millions of families on unemployment will still be in crisis come September."
Trump's moves are "unworkable, weak and far too narrow," Senate Democratic leader Charles Schumer of New York said on ABC's "This Week."
Democrats and some Republicans -- notably Sen. Ben Sasse of Nebraska -- have termed Trump's actions unconstitutional. House Speaker Nancy Pelosi, D-Calif., and Schumer stopped short of saying that Democrats would attempt to stop them in court.
"Whether they are legal or not, it takes time to figure out," Pelosi said on CNN. "Right now we want to address the needs of the American people."
Treasury Secretary Steven Mnuchin said all the executive actions were cleared by legal counsel, but White House economic adviser Larry Kudlow said on ABC that the administration may have to prepare a legal defense for the orders.
"Maybe we're going to go to court on them. We're going to go ahead with our actions anyway," Kudlow said. "Our counsel's office, the Treasury Department believes it has the authority to temporarily suspend tax collections. So we're banking on that."
Still, some measures, such as a second round of $1,200 checks that Republicans and Democrats both support, will have to wait until the two parties can agree on legislation.
Some economists have said that, by acting unilaterally, Trump could get lawmakers back to the table. "If these policies are indeed implemented, this suggests that they might force Congress to act by then to avoid further disruptions," economists at Goldman Sachs said in a research note Saturday.
GOVERNORS RESPOND
Democrats pounced on the confusion from Trump's executive directives, arguing that the White House should resume negotiations on a broader relief package. Those talks collapsed last week after both sides dug in on what they believed the package should entail and how much it should cost.
The stalemate resulted in the expiration of a critical economic lifeline to millions of Americans -- an extra $600 a week in unemployment benefits that Congress approved in March.
In response to the expiring aid, Trump on Saturday signed an order that would offer $400 a week in federal unemployment benefits. To pay for the program, the president said he would tap $44 billion in federal funds allocated for natural disaster relief.
But states would have to contribute $100 a week to each worker's check, with the federal government putting up the rest. Beyond the legal questions surrounding the maneuver, many states are facing severe budget deficits as they fight the coronavirus, and several economists and lawmakers said governors may be unlikely to sign onto the program.
States are asking the federal government to offer as much as $1 trillion in new aid to cover budget gaps. Asked whether Ohio could afford the new unemployment insurance expense, Republican Gov. Mike DeWine replied on CNN: "The answer is, I don't know yet."
[CORONAVIRUS: Click here for our complete coverage » arkansasonline.com/coronavirus]
New York Gov. Andrew Cuomo, a Democrat, tweeted: "Executive Orders can't replace legislative actions. States can't pay 25% of unemployment costs. It's simply impossible."
On "Fox News Sunday," Mnuchin suggested that the administration could be flexible on the state contribution, saying: "The 25% from the states -- they can either take that out of the money we've already given them or the president can waive that."
According to the directive, the aid should run through Dec. 6 or until funding runs out. But $44 billion would cover less than five weeks of payments for the ranks of the 30 million Americans who are currently unemployed, several economists noted.
And top administration officials Sunday appeared confused about when the first checks might be paid. Mnuchin said the jobless benefits could be available "immediately," but Kudlow said on CNN that the payments could take a couple of weeks.
Even if state governments sign onto the program, the jobless benefits might be out of reach for Americans in greatest need: Only out-of-work Americans receiving more than $100 a week in state unemployment insurance are eligible for the federal aid. That means those at the bottom of the income distribution -- particularly workers who rely on tips and the self-employed -- could see no additional federal benefit at all, said Andy Stettner, an unemployment insurance expert at the Century Foundation.
One of Trump's other executive orders was aimed at minimizing evictions and foreclosures. But the order does not reinstate a federal eviction moratorium that expired last month. Instead, it calls on the Department of Health and Human Services and the Centers for Disease Control and Prevention to "consider" whether it is necessary to temporarily halt evictions. The action fell short of what housing advocates said is needed to keep millions of Americans in their homes.
STICKING POINTS
"We have to reach an agreement," Pelosi said on "Fox News Sunday." "Children are food-insecure, families are at risk of being evicted, the virus is moving like a freight train."
Pelosi repeated that Democrats had offered to reduce the price of their $3.4 trillion bill by $1 trillion, largely by changing the duration of proposed programs.
But Mnuchin said Democrats had refused to come off their $915 billion request for money for cities and states, a figure he termed "ridiculous." He said that apart from that issue and a dispute over the appropriate level of unemployment insurance, all other major matters had been resolved. On Sunday, he called for passing legislation on the 70% to 80% of issues for which there was agreement, and pursuing the other issues later.
"We don't have to get everything done at once, what we should do is get things done for the American public now, come back for another bill afterwards," Mnuchin said on "Fox News Sunday."
"Any time they have a new proposal, I'm willing to listen," he said of the Democrats.
Pelosi spokesman Drew Hammill denied that there had been agreement reached on most major issues.
'INCREDIBLY IMPORTANT'
It's "incredibly important" that the U.S. deliver another round of fiscal policy measures to aid the economy as it weathers the pandemic, said Federal Reserve Bank of Chicago President Charles Evans.
"Fiscal policy has been unbelievably important in supporting the economy during the downturn that we've been experiencing," Evans said Sunday on CBS' "Face the Nation."
"That continues to be important because we've not got control over the virus spread. I think that public confidence is really important, and another support package is really incredibly important," he said.
Asked to discuss the consequences of failing to renew robust fiscal aid -- where one of the sticking points is how much money to set aside for state and local governments -- Evans noted that these entities employ about 10% of the U.S. workforce, and face a major budget crunch as a result of the virus.
"As you look at the economic outlook, there are some negative scenarios, and the ones that are most pessimistic involve not supporting state and local governments," he said. "States have to balance their budgets. They are experiencing reduced tax revenues, and so there will be employment reductions."
Information for this article was contributed by Tony Romm, Erica Werner and Jeff Stein of The Washington Post; and by Alister Bull, David McLaughlin, Laura Davison, Yueqi Yang and Billy House of Bloomberg News.