Last weekend President Trump lost patience with the impasse on the Hill over pandemic assistance and signed four executive actions that purportedly took care of some of the issues. There was one Executive Order to minimize evictions and three memos on student loan repayment relief, payroll tax deferral, and increased unemployment benefits.
And they didn’t actually spell anything out so much as order the appropriate agencies to come up with a plan.
Those plans – in addition to being bad budgeting practice, bad for accountability, and legally suspect – are likely to be ineffective. Which is what tends to happen when you don’t think things through.
Case in point: the payroll tax deferral – roundly opposed by Democrats and Republicans on the Hill – won’t help anyone who is currently unemployed. Meanwhile employers and payroll companies are left waiting for Treasury to figure out how to implement the plan. Because at roughly 7.6 percent raise per pay period until the end of year, it is a relatively small boost. But deferral means that employees will have to repay that cash absent legislative action. (It’s not even clear that money will go to employees, some employers may hold the cash in escrow to ensure they aren’t stuck with the bill when repayment is required). Furthermore, the payroll tax deferral will simply reduce revenues into the Social Security and Medicare Trust Funds that are already in trouble.
Helping the millions of people who are unemployed because of COVID-19 is important, but the administration can’t just appropriate money, constitutionally that’s Congress’ job. So what did they direct Cabinet officials to do? Raid the Disaster Relief Fund (DRF). This end-run is barely legal and an actively bad idea. It will require states to match the $300 from the feds with $100 (a standard 75 percent/25 percent match which may be waived). But it’s also a bad idea because these funds exist to help quickly respond to natural disasters. Each year a pre-determined amount (rolling ten-year average actual disaster spending with high and low year removed) of disaster costs are budgeted for in advance. So instead of waiting for Congress to act in the immediate aftermath of the disaster, there’s a large pot of money at the ready. But in an administration with little regard for the rules, it’s tempting as a political relief valve right now. Convenient though it is, raiding the DRF is flat out foolish, especially a week after a rare derecho tore through the Midwest and while the country is entering the most active period of a hurricane season that started early and is outpacing predictions.
It used to be that intentionally violating the Purpose Statute, Antideficiency Act, and Impoundment Control Act to get what you want was almost unheard of. But this president, and his administration, have been allowed to violate all the norms of federal appropriations law with little penalty. From keeping National Parks open and improperly using entrance fees during a government shutdown to the IRS processing refunds during a shutdown. Also illegally transferring money from military construction for the border barrier. Just last month the GAO reported that the CBP spent emergency funds intended for medical care and food on ATVs, security cameras and even dog food. Then there was the withholding of funds duly appropriated as aid to Ukraine. And now we’re seeing this end-run tactic again with the idea of tapping the DRF.
So why do this? Why pull a move that isn’t going to really work, and is legally questionable, to boot? Well, first it allows the White House to let out a bit of the pressure to get a deal done as people start to see benefits evaporate. It also allows the president to pretend he made people “do something!”
We say this a lot to Congress: Dig in, deal with the policy, do the actual work. It applies equally to the president. Especially during a historic, still unfolding, global pandemic and its economic fallout with north of 31 million Americans out of work.