Trump Wants to Give Unemployed People $400 a Week — With One Huge Catch

States couldn't afford to pay their share of the new benefits, and the president's executive order excludes many of the country's 30 million unemployed people.
August 10, 2020, 12:31pm
AP Photo/Susan Walsh
AP Photo/Susan Walsh

On Saturday, President Donald Trump attempted to circumvent a stalled Congress by signing a series of executive orders to try and kickstart the failing economy, including providing a $400 unemployment benefit to tens of millions of out-of-work Americans.

The orders “will take care of pretty much this entire situation, as we know it,” Trump said.

But what he didn’t say is that the money will be diverted from much-needed disaster relief funds and state coffers, which are already threadbare due to the economic crisis caused by the coronavirus. There are also likely to be legal challenges to Trump’s actions, and even if the executive orders are enacted, economists say the money will run out in a matter of weeks.

Businesses, Democrats, state officials, and economists have dismissed Trump’s directives as unworkable. “Unfortunately, the president’s executive orders, described in one word, could be paltry, in three words, unworkable, weak, and far too narrow,” Senate Minority Leader Chuck. Schumer (D-N.Y.) said Sunday on ABC News.

Trump signed four executive orders on Saturday at his New Jersey golf club. The president signed the orders after talks on a stimulus package broke down Friday.

As well as the order providing a $400 unemployment benefit, he also signed orders designed to provide relief for student borrowers and suspend the collection of payroll taxes. His final order directs federal agencies to do what they can to prevent evictions, but it fall short of extending the eviction moratorium the CARES Act brought in.

But almost immediately, the legality of the orders was called into question, given that Congress controls federal spending, not the president.

According to the directive, the president wants to divert $44 billion in funding from a federal fund for disaster relief in the middle of what is expected to be one of the most active hurricane seasons on record.

It also says that states should cover 25% of the payments, but with state officials already struggling to keep afloat due to budget shortfalls, few states are likely to be able to cover this extra cost.

But Trump on Sunday opened the door for some states to avoid paying the contribution.

"We have a system where we can do 100% or we can do 75%, they pay 25, and it will depend on the state," he told reporters. “And they will make an application. We will look at it, and we'll make a decision.”

The executive order also appears to exclude many of those in greatest need, as it only applies to out-of-work Americans receiving more than $100 a week in state unemployment insurance — meaning self-employed workers and people who rely on tips will be excluded.

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The White House dismissed criticism that it was excluding poor people, saying the $100-a-week limit was designed to prevent fraud.

It’s utter nonsense to suggest that the Trump administration is somehow targeting poor people,” Judd Deere, a White House spokesman, told the Washington Post.

The executive order says the enhanced benefit should remain in place until Dec. 6, but with 30 million Americans currently out of work, the $44 billion budget will last less than five weeks.

Trump boasted on Saturday that the measures would help kickstart the economy, but in the hours and days since he signed the executive orders, experts and critics have pointed out the holes in the policies, arguing that the plan is unlikely to provide the economic boost Trump had described.

Biden called the orders “a series of half-baked measures” and said they were "another cynical ploy designed to deflect responsibility.”

“The president’s meager, weak, and unconstitutional actions further demand that we have an agreement,” House Speaker Nancy Pelosi told Fox News on Sunday.

Even some Republicans appeared unsure whether Trump’s orders could be delivered.

“The answer is, I don’t know yet,” Ohio Gov. Mike DeWine told CNN when asked if his state could afford the new unemployment insurance expense.

Trump’s own officials added to the confusion about how the new measures would work.

Treasury Secretary Steven Mnuchin told Fox News on Sunday that the $400 benefits could be available “immediately,” but White House economic adviser Larry Kudlow told CNN that the payments could take a couple of weeks.

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Cover: President Donald Trump talks with reporters before departing from Morristown Municipal Airport in Morristown, N.J., Sunday, Aug. 9, 2020. Trump is returning to Washington after spending the weekend at the Trump National Golf Club. (AP Photo/Susan Walsh)