Donald Trump announced several stimulus items taken by executive action after Democrats — as they did in the spring — held financial stimulus hostage to their grab bag of goodies unrelated to the virus.

Only one of the actions taken by Trump was through an Executive Order, the rest were through memoranda. Law Professor Josh Blackmun has an explanation of the rather complex nature of the procedures used and mechanisms implemented.

Fox News reports on the details:

$400 weekly federal unemployment aid

Trump’s order calls for $400-per-week in supplemental unemployment aid. Unemployed people were getting $600-a-week extra until the federal program expired at the end of July.

Trump’s action would require states to pay for 25 percent of the $400 weekly benefit, while the federal government would pick up 75 percent.

Trump would divert up to $44 billion from FEMA’s Disaster Relief Fund to cover the unemployment program….

Assistance to Renters and Homeowners

Congress passed the CARES Act in March that issued a 120-day temporary eviction moratorium on renters in federal housing assistance programs or those who live in a property with a federally backed mortgage. That eviction moratorium expired in July.

Trump’s executive order would continue federal efforts to help renters and homeowners avoid eviction or foreclosure for failing to make their monthly payments.

Payroll Tax holiday

Trump defers the payroll tax from Sept. 1 to Dec. 31, 2020, for employees making $100,000 or less a year. The tax funds Social Security and Medicare.

Extension of Student Loan Relief

The executive action suspends federal student loan payments and sets interest rates to 0 percent through Dec. 31, 2020. The current student loan relief programs were to expire on Sept. 30.

Is what Trump just did legal?

At this point, we are so far down the rabbit hole of Executive Orders and Memoranda, that much of what Congress used to do gets done by the Executive. As the Supreme Court via John Roberts demonstrated with DACA, what a president (Obama in that case) does by executive action can start as illegal but gain de facto legality unless the subsequent administration unwinds it properly.

The other dynamic is that once people receive a benefit, it’s really hard politically to take it away. The $600 per week bonus unemployment payment created a situation where people making less than %50,000 per year who lost their jobs had a financial incentive to stay out of work. I don’t expect people to make economically irrational decisions, and it’s rational if you are making substantially less than $50,000 per year not to return to work. Numerous contractors and landscapers have told me that they have a hard time hiring people even though they are busy because they make more not working. That dynamic will change a little because Trump lowered the $600 bonus to $400.

The third dynamic is that the Democrats are hardpressed to try to stop it in court. The party that always claims Republicans want to kill grandma and starve children would be in the posture of taking stuff away from people at a difficult time.

Trump basically dared them to try.

 

 
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