DAYTON, Ohio (WDTN) – President Trump signed four executive orders on Saturday addressing several economic issues during the COVID-19 outbreak, including enhanced unemployment benefits – but some of his orders may run into Constitutional issues.
Dr. Edward Fitzgerald, a long-time political science and law professor at Wright State, said presidents have limited powers when it comes to executive orders, but whether or not President Trump is challenged depends on Congress and special interest groups who may file lawsuits.
Trump signed executive orders concerning the following:
- Enhanced unemployment benefits, that would pay $300 a week, replacing the $600 a week that was funded by the Coronavirus Aid, Relief and Economic Security Act.
- Eviction protections that banned late fees and eviction filings, which ran out in late July.
- Student loan payment deferral extensions, which would waive student loan interest until Dec. 31, extending the current deferral which ends on Sept. 30.
- A payroll tax cut that allows the Secretary of the Treasury to defer withholding taxes until December.
Fitzgerald said Trump’s orders present several problems including separation of powers with Congress. Trump is borrowing money from the Federal Emergency Management Agency to pay for his $300 per week enhanced unemployment benefit. That money would run out in five weeks.
“He’s talking about transferring money from a disaster relief program to pay for unemployment compensation,” Fitzgerald told WDTN.com. “The president does have re-programming power where he can move money from one account and spend it in another account. That is somewhat dependent on the statute the money was authorized under and if there are any stipulations put on that re-programming.”
Fitzgerald said the enhanced unemployment benefits also face two other challenges. After five weeks, Trump would have to find funding from another source since it would drain the funding from FEMA. He could also face a legal challenge for violating Congressional spending laws.
“There is a condition in the Consolidated Appropriations Act of 2019,” Fitzgerald said. “It’s Section 739. What it says is the president can’t reprogram money in his budget that Congress never funded. Unless Congress passed an appropriation act to fund that item the president can’t reprogram money into that. The question is once the unemployment compensation has ended, does that mean the money in his budget is over or does Section 739 have a possible limitation on him reprogramming funds.”
The executive order deferring payroll tax payment could be a problem for people once that payment comes due. Right now, Treasury Secretary Steve Mnuchin would have the authority to defer payroll taxes for Social Security until December. At that point, taxpayers would owe al that tax money.
Fitzgerald said Trump promised he would make sure those getting the payroll tax deferment would not owe money if he gets re-elected, but the problem is more complicated and Trump’s re-election doesn’t guarantee taxpayers will be off the hook.
“The fact is he said if he gets re-elected he will wipe that off so nobody has to pay the amount of payroll tax that hasn’t been withheld,” Fitzgerald said. “That will require an act of Congress as well because it’s an appropriations measure so he can’t do that unilaterally.”
There’s also the question if employers will go through withholding the tax from their employee’s paychecks. Even if the withholding taxes are deferred, it doesn’t mean businesses will pass that deferral along.
“They aren’t cutting the tax, they are deferring it,” Fitzgerald said. “Everyone will have to pony up in December and nobody wants to get whacked with a tax bill in December.”
Fitzgerald said Trump’s order has little details on extending the eviction moratorium that ran out in July.
“He’s put (the eviction moratorium) under study, which in politics usually means you aren’t really wanting to do anything with it right now,” Fitzgerald said.
Fitzgerald said Trump’s strongest case for executive action was on student loan deferment. Since federal student loans are ran by agencies, and administration agencies fall mostly under the authority of the White House.
Split in Republican party leads to stimulus impasse
Congress passed the HEROES Act in May, a $3 trillion stimulus package that provided relief to state and local governments, funded stimulus checks and continued expanded unemployment. Republicans followed with the HEALS Act several weeks ago, which came in at $1 trillion.
According to Fitzgerald, Democrats offered to drop a $1 trillion in spending from the HEROES Act to meet in the middle with the Senate bill, but many Republicans balked. He said right now there’s an impasse among Republicans on what to do with future stimulus. Ohio Senator Rob Portman has said he wants to offer ‘back to work’ bonuses in order to encourage employment and begin to pay back much of the money. He wanted the second bill to be much more targeted and focused on growing the economy. Treasury Secretary Steve Mnuchin said he’d like to continue the enhanced unemployment funding, but instead of $600 a week from the federal government, he prefers the amount capped at 100 percent of the person’s income.
Fitzgerald said he expects challenges to Trump’s executive orders.
“There should be some court cases as to whether he has the re-programming authority and if there are issues related to Section 739 of the 2019 Congressional Appropriations Act,” Fitzgerald said. “Then there’s the argument on deferred taxes. He’s stepping on Congress here because that’s done through appropriations.”
All of President Trump’s executive orders can be read at the WhiteHouse.gov website.