Americans unemployed due to pandemic to get extra US$400 a week, down from US$600 in earlier package

US president’s executive orders also pause collection of payroll taxes, and address issues like evictions and student loan payments

US President Donald Trump signed executive orders on Saturday providing additional financial support to Americans hard hit by the coronavirus pandemic, after his negotiators failed to reach a deal with Congress.

Trump said the orders would provide an extra US$400 per week to the tens of millions thrown out of work during a health crisis that has killed more than 160,000 Americans, less than the US$600 per week level passed earlier in the year.

Some of the measures were likely to face legal challenges, as the US Constitution gives Congress authority over federal spending.

“This is the money they need, this is the money they want, this gives them an incentive to go back to work,” Trump said of the lower enhanced unemployment payments.

Republicans have argued that the higher payments were a disincentive for unemployed Americans to try to return to work, though economists, including Federal Reserve officials, disputed that assertion.

Trump also said he was suspending collection of payroll taxes, which pay for Social Security and other federal programmes, an idea that he has repeatedly raised but has been rejected by both Democrats and his fellow Republicans in Congress.

His orders would also stop evictions from rental housing that has federal financial backing and extend zero per cent interest on federally financed student loans, he said.

“Congressional Democrats have stonewalled our efforts to extend this relief,” Trump told reporters at his New Jersey golf club, in a room that featured a crowd of cheering supporters.

House of Representatives Speaker Nancy Pelosi had pushed to extend the enhanced unemployment payments at the previous rate of US$600 per week approved early in the crisis.

Nearly two weeks of talks between White House officials and congressional Democrats ended on Friday with the two sides still about US$2 trillion apart on next steps to address the heavy human and economic toll the coronavirus pandemic has taken on the United States, where it has killed more than 160,000 people.

Trump initially played down the disease’s threat and has drawn criticism for inconsistent messages on public health steps such as social distancing and masks.

The US$600-per-week increase in unemployment payments that has served as a lifeline to the tens of millions of Americans who lost their jobs in the pandemic expired at the end of July.

Pelosi and Senate Minority Leader Chuck Schumer on Friday offered to reduce a proposed US$3.4 trillion coronavirus aid package, which the House passed in May but the Senate ignored, by nearly one-third if Republicans would agree to more than double their US$1 trillion counter-offer.

White House negotiators Treasury Secretary Steven Mnuchin and Chief of Staff Mark Meadows rejected the offer.

Democrats have already warned that such executive orders are legally dubious and would likely be challenged in court. They voiced support for others – Pelosi this week said she would welcome an executive order halting rental evictions.

While Trump had repeatedly floated the idea of executive orders to push relief, Schumer on Friday said the White House team had acknowledged that power was limited.

“The other choice is for them to do executive orders which by their own admission, they said it to us repeatedly, is not close to as good,” Schumer said. “It doesn’t cover opening of schools. It doesn’t cover testing. It doesn’t cover dealing with rental assistance. It doesn’t cover elections. It doesn’t cover so many things.”

A court fight could take months, and Trump has managed to sidestep Congress on spending before, declaring a national emergency on the US-Mexico border to shift billions of dollars from the defence budget to pay for a wall he promised during his 2016 election campaign.

Congress passed legislation to stop him, but there were too few votes in the Republican-controlled Senate to override his veto – a scenario that would likely play out again with less than 90 days to go before the November 3 presidential election.

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