WASHINGTON – United States President Donald Trump signed on Saturday executive orders to extend coronavirus economic relief economic package as the country nears the horrific milestone of five million COVID-19 cases and more than 162,000 deaths.
The relief measures announced through executive orders partly restore an unemployment package for the tens of millions of US citizens who lost jobs in the pandemic.
The measures had expired amid a logjam between Republicans and Democrats in Congress on how to address the economic crisis from the pandemic that has infected 4.99 million people in the worst-affected country.
According to data from Johns Hopkins University, the disease has claimed 162,381 lives in the US. The states with the most number of cases are California (554,414), Florida (526,577), and Texas (497,402).
The states that have suffered the most fatalities are New York (32,768) followed by New Jersey (15,869) and California (10,306).
The health crisis has caused a serious dent in the country’s economy, which shrank at an annual rate of 32.9 percent in the second quarter of 2020 and fell 9.5 percent compared to the first three months of the year.
The Labor Department reported on Friday that the job market recovery moderated in July with the unemployment rate falling from 11.1 percent in the previous month to 10.2 percent, while 1.8 million jobs were created.
The modest improvement reflects the gradual reopening of the economy, even as 16.3 million US citizens remain jobless.
Faced with the economic disaster, the Democrats and the White House held talks on Friday for a fresh stimulus package.
However, as the negotiations failed, Trump signaled his readiness to use his executive powers, though the legality of that approach is questionable.
The president detailed the orders in a press conference in Bedminster, New Jersey.
Trump began by proclaiming an extension of the additional federal unemployment benefits that Congress approved in March as part of the CARES Act.
However, the new order came with two major changes. The top-up payments are to be reduced from $600 a week to $400 and the 50 state governments will be expected to meet 25 percent of the cost.
“I’m taking action to provide an additional or extra $400 a week and expanded benefits, $400. That’s generous but we want to take care of our people,” Trump said at his golf club in Bedminster, where he signed the executive orders.
While the president said that states could use federal funds appropriated in the $2.2 trillion CARES Act to cover the additional jobless benefits, many state governments are in financial straits due to sharp declines in tax revenue because of the pandemic.
Democrats want the benefits to continue at $600 a week, while some of Trump’s fellow Republicans in Congress insist the extra payment should be slashed to $200.
In response to a question on why he decided on $400 a week, the president said that reducing the benefit gives people “a great incentive to go back to work.”
In another measure, Trump directed the Treasury Department to allow employers to defer payment of employee-side Social Security payroll taxes through the end of 2020 for those who earn less than about $100,000 annually.
The text of the executive order states that the intended deferral period would start from Sept. 1. But the president indicated that it could be retroactive to Aug.1.
Trump said he hoped to forgive the deferred payroll taxes and make permanent payroll tax cuts if he is re-elected in November.
“I’m going to make them all permanent,” he stressed.
Trump said his administration was studying additional cuts in taxes on income and capital gains.
“We are going to be looking at capital gains to create jobs and income taxes is self explanatory,” he said.
“It will be income tax for middle-income and lower-income people but middle-income people who pay a lot of income tax, you have tax inequality. I’m saying that as a Republican and you do have tax inequality.”
The president has long advocated reducing the payroll tax, but defenders of social security and medicare see such a move as a way to undermine those programs and some Republicans are wary of the potential effects on the budget.
Economists are also skeptical about the potential for the cut to stimulate spending given that it will not benefit the tens of millions of Americans who are unemployed.
The other two executive orders freeze federal housing evictions and put a pause in the repayment of student loans until the end of the year.
“Through these four actions, my administration will provide vital relief to Americans struggling during this difficult time,” Trump said.
Democrats have already questioned the legal basis and threatened to challenge Trump’s decisions in court if the president bypasses Congress.
Under the US Constitution, only Congress has the authority to appropriate public money for federal spending.
But Trump shrugged off questions about the legality of the orders and possible legal challenges he may face.
“I mean, everything you do, you get sued. “So we’ll see. Yeah, probably we get sued, but people feel that we can do it.”