Amid partisan bickering, President Donald Trump has signed an executive order for a relief package that would enhance unemployment benefits. But how much impact will it really have?
Many believe U.S. President Donald Trump’s decision to sidestep stalled congressional negotiations over coronavirus aid will do little to revive the economy, but the blame ultimately lies with lawmakers who have repeatedly refused to agree on a new relief package.
Trump’s executive order, announced Saturday, would temporarily extend enhanced unemployment benefits at a reduced amount of $400 a week, defer payroll taxes for some workers, suspend federal student loan payments and potentially provide eviction relief. Yet presuming he can overcome legal challenges to these moves, the efforts may be too little, too late.
Mark Zandi, the chief economist at Moody’s Analytics, calculated the plan would result in just over $400 billion in relief for Americans. JPMorgan Chase economist Michael Feroli was even more pessimistic, telling Reuters that the initiatives would amount to “less than $100 billion” in stimulus. Compare those numbers to the $1 trillion aid package proposed by the Republican-led Senate or the more than $3 trillion aid bill passed by the Democrat-led House of Representatives. Yet it was precisely the inability of the two parties to reach a consensus that led to the hastily arranged presidential memorandum.
The U.S. unemployment rate continued to fall in July, but it was a much lower decrease than in May and June, denting hopes of a quick and easy economic revival. Meanwhile, the death toll from the coronavirus pandemic recently surpassed 160,000. The U.S. has far more COVID-19 cases by volume than any other country—more than 4.9 million—and its rate of infection has risen steadily throughout the summer. Yet the sad reality is that after weeks of negotiations, congressional Democrats and administration officials were able to offer the nation very little.
Both sides agreed that something had to be done to help the unemployed, provide some support to schools that are struggling to cope with the pandemic and protect those facing eviction. The challenge was there was still at least a trillion dollars in daylight between their two plans and with a presidential election just three months away, neither side seemed willing to budge.
It suggests that both sides are willing to endure the political and economic fallout of a continued impasse—at the cost of the economic welfare of ordinary Americans.