Trump orders shake up debate over stimulus

Photo | SHNS Gov. Charlie Baker

Write a Comment

By State House News Service

The Baker administration said Monday it was weighing whether to participate in President Donald Trump's scaled back unemployment assistance program that requires states to pick up a quarter of the cost of the $400 weekly enhanced benefit for those out of work, but Gov. Charlie Baker's office said nothing about Trump accusing Democrat-run states of wanting a "bailout."

With Congressional talks hung up and the nation struggling through the COVID-19 crisis, Trump on Saturday signed executive orders dealing with protections for renters, payroll taxes, college loans and enhanced unemployment benefits that he said would "take care of, pretty much, this entire situation."

The action came after days of talks between Democrats and Republicans in Congress and at the White House over another round of pandemic relief spending broke down.

But with Beacon Hill looking to Washington for help in digging out of a deep financial hole resulting from the coronavirus pandemic, the prospects for relief seemed to take a hit.

Trump, at a press briefing from his golf club in Bedminster, N.J. on Saturday, said he had made clear to Democrats he was willing to sign expanded unemployment benefits, eviction protections and additional relief payments for families.

"But what the Democrats primarily want is bailout money. It has nothing to do with the China virus. It has nothing to do with anything that we've been talking about over the last period of time. They want to bailout states that have been badly managed by Democrats, badly run by Democrats for many years -- and, in fact, in all cases, many decades. And we're not willing to do that," Trump said, according to a briefing transcript.

It's not just states run by Democrats who are hoping to see additional financial relief coming their way soon.

The bipartisan National Governors Association, under the leadership of Republican Gov. Larry Hogan of Maryland, had made $500 billion in unrestricted federal aid to the states a top priority in its efforts to lobby Congress over relief. Baker sits on the NGA's executive committee, but the governor's office did not offer a response when asked about the president's comments.

"Make no mistake — Massachusetts is one of the wealthiest states in the nation. We've managed our state finances while putting away $3.5 billion in our Rainy Day Fund. But with COVID-19 and the dramatic slowdown of our economy, we are expecting a drop in revenue of as much as $7 billion for this fiscal year alone. To get it right, we rely on the federal government to provide us with assistance so we can avoid harmful budget cuts and make sure all of our communities have the resources they need," said Marie-Frances Rivera, president of the Massachusetts Budget and Policy Center, in a statement to the News Service.

The U.S. House, led by Democrats, passed a more than $3 trillion package that included that funding for states, but Senate Republicans have been trying to trim total spending down to about $1 trillion.

Democratic leaders in the Congress are urging Republicans to meet them in the middle with around $2 trillion in aid, but it's unclear if talks will resume, or if Trump's action took some of the urgency out of those negotiations. At the State House, Democratic leaders extended their session this summer as they wait to put together a fiscal 2021 budget this fall. Leadership said it wanted to see if the federal government would come through with aid, how the economic recovery progresses and if there will be a second wave of the virus.

With the future of the relief bill in doubt, Trump on Saturday took executive actions that are widely expected to be challenged in court, potentially delaying the delivery of the assistance.

One order extended the enhanced unemployment benefits that expired on July 31 for workers who have lost their jobs during the pandemic, but the president renewed the benefits at $400 a month, or two-thirds their original level.

States would also be required to cover 25 percent of the new benefit if they choose to participate, and the program would expire no later than Dec. 6, or when funding runs out.

Trump said the previous $600 enhanced benefit had been a "disincentive" for people to go back to work, and he suggested states dip into their allocations from the Coronavirus Relief Fund to pay their share of the benefit.

"But if they don't, they don't," Trump said. "That's going to be their problem. I don't think their people will be too happy. They have the money. So I don't think their people will be too happy. But if they don't, they don't."

Massachusetts received close to $2.5 billion from the Coronavirus Relief Fund, and through June had spent close to $944 million, according to documents provided to the News Service by the administration.

That total does not include the $202 million the administration plans to use to support school reopenings in the fall, or the $700 million in health care provider support that the administration has supplied, but expects to be covered eventually through federal sources other than the Coronavirus Relief Fund.

"The administration is reviewing the Executive Order related to unemployment benefits," said a spokesman for Labor Secretary Rosalin Acosta. The administration said the Department of Unemployment Assistance had received a memo outlining the program.

If Massachusetts were to participate, it's unclear how much it would cost. Massachusetts has had one of the highest unemployment rates in the country, and as of the last week of July had 502,471 continuing claims for unemployment assistance and 19,179 initial claims for regular UI benefits for the week.

Another of Trump's executive orders would allow employers to defer payroll taxes for workers earning up to $100,000 until the end of the year, putting more money for the time being into the checks of working Americans.

Trump said that if he wins in November he planned to forgive the taxes altogether, and seek a permanent payroll tax cut, which has been roundly criticized by Democrats as an attack on Social Security, which is funded by payroll taxes. The action, critics said, also wouldn't help people who don't have a job right now.

"Don't let the occupant of the White House distract you. He just unilaterally cut Social Security and your unemployment benefits. In the middle of a pandemic," U.S. Rep. Ayanna Pressley said.

Trump also said he was looking into possible income and capital gains tax cuts.

In Massachusetts, Baker has extended a statewide moratorium on evictions and foreclosures through October 17, so it is less impacted by Trump's actions on housing.

Trump acknowledged the threat that many renters and homeowners could lose their homes, but he did not extend the expired federal moratorium on evictions that had been part of the Cares Act.Instead, the president signed a third order directing the Department of Housing and Urban Development and other agencies to explore solutions to make sure renters and homeowners could stay in their homes.

U.S. Sen. Elizabeth Warren called Trump's action on housing "empty words" because the order did not guarantee protection from eviction, and argued that cutting back on enhanced unemployment benefits would slow the economic recovery.

"If Donald Trump cared about helping Americans, he would have demanded @SenateMajLdr McConnell start negotiating as soon as the House passed the HEROES act almost two months ago. These legally dubious actions aren't real relief for states and families -- they're a cruel joke," the senator wrote on Twitter.

Trump also signed an order extending the policy that suspended student loan payments and set interest rates on college loans at zero percent through the end of the year.