stimulus update august 4 2020
Updated September 04, 2020

Grassley Doesn’t Like Trump’s Executive Order Plan

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Grassley Doesn’t Like Trump’s Executive Order Plan

This is my stimulus update for Tuesday, August 4.

Don’t want to read? Watch the video here!

Fight Isn’t Over Stimulus Checks

The fight is no longer over stimulus checks as an isolated issue, Democrats and Republicans are aligned on stimulus checks. Mnuchin confirmed as much two days ago, the issue now is getting a bill passed which would include stimulus checks, unemployment, all that, because Pelosi doesn’t want to go piecemeal.

So we’re not talking a lot about stimulus checks right now, we’re talking about these other things that I know many of you don’t care about individually.

If you’re unemployed, you care about unemployment, you don’t care about a payroll tax cut.

If you’re employed, you care about the payroll tax cut, but you probably don’t care about unemployment as an isolated issue.

If you’re out of the workforce, you just care about that darn stimulus check.

But even if you don’t have a horse in the race when it comes to unemployment, the debate over unemployment still matters to you because it doesn’t look like at this point you’ll be getting a stimulus check in an isolated bill, it would be part of a larger package that Democrats and Republicans have to agree on that would include stimulus checks, unemployment, maybe that liability shield, etc.

That’s why we’re talking about these other issues because that’s where the fight is right now, and the fight isn’t just about that isolated issue right now, the fight about one thing with respect to the next legislation is really a fight about all the things right now, including those $1,200 stimulus checks.

For one thing, nothing’s confirmed until it’s actually confirmed until it’s actually passed by both houses of Congress and signed into law by the President.

I think we’re all optimistic right now that a second stimulus check will happen, but it’s not “confirmed” yet, and especially not a “bigger” stimulus check, I don’t even know how they got there, because it seems pretty clear at this point that we’re just talking another round of CARES Act-type stimulus checks, nothing “bigger” than that except now adult dependents are included for the $500 because it appears that both Democrats and Republicans agree on that point.

Trump and Presidential Power

There’s a little bit of infighting on the Republican side, and it centers around that payroll tax cut that keeps rearing its ugly head in the President’s mind.

Republicans were fighting over this a couple weeks ago.

Donald Trump and various White House officials are exploring the possibility of utilizing an executive order, this is basically an order directly from the President to do something, and in the most pressing case on the Donald’s mind, this would be an executive order to the Internal Revenue Service to stop collecting payroll taxes.

This option is also being looked at for things like the extension of some form of federally-funded enhanced unemployment benefits as well as an extension of the federal eviction moratorium.

Yesterday Trump said, “A lot of people are going to be evicted, but I’m going to stop it because I’ll do it myself if I have to.  I have a lot of powers with respect to executive orders, and we’re looking at that very seriously right now.”

He has similar thoughts regarding the payroll tax cut, and the man is very impatient with the negotiations.

However, yesterday, Chuck Grassley, a Republian senator mind you, and the chair of the Senate Finance Committee, shut this notion down.

Neil Cavuto: So let me ask you real quickly, sir, you’re very patient here that Steve Moore has an interesting column today where he’s talking about the President imposing via executive order, a one-time payroll tax cut. I think he says he would limit it to those with income of $75,000 or less, and that the President could do that. I don’t know if he can do that, sir. But would you be for that?

Chuck Grassley: Well, if we wrote a tax law that allowed him to do it, Congress’s negligence in its enactment of legislation, and if we did it, we probably did it 40 or 50 years ago, not very recently, because I don’t ever remember us giving the President that kind of authority. But the President should not have that kind of authority. The power to tax is a power of the Congress of United States. And it’s something we should selfishly protect, in order to protect the American people in the principle of representative government.

He says in response to Trump’s vying for power via executive order, Grassley says that he doesn’t ever remember us giving the President the power to do such a thing.

And even if Trump somehow does pull off an executive order, we do know that Congress can pass a bill to override an executive order, of course the President could veto that bill, and then Congress could override a presidential veto by a two-thirds vote in both houses.

Also the Supreme Court could declare an executive order unconstitutional.

But you know I doubt that the legislative or the judicial branches would do such a thing in the midst of this pandemic, and who knows, this all could go nowhere, it could just be talk on Trump’s part.

But we do know that Trump met recently with controversial attorney John Yoo about the possibility of exerting action here with respect to the payroll tax cut in the form of an executive order.

Stimulus Negotiations

So it’s a bit frustrating, because it appears that we have Meadows, Mnuchin, Pelosi, and Schumer making some progress, though it seems that Mark Meadows is probably the most frustrated of the bunch right now, but they’re negotiating on things.

They’re basically comparing, line-by-line, allocation-by-allocation, the Democrats’ HEROES Act that passed the House in May with the Republicans’ HEALS Act that was introduced last week, and a payroll tax cut is in neither of those bills.

So you know, when you have the President coming in and talking about payroll tax cut, but the negotiators are not talking about the payroll tax cut, that could really screw things up. Maybe that’s why Trump feels that he needs to maybe throw in an executive order to get this payroll tax cut done, that he’s been talking about.

So frequently, like I said, I don’t think he could actually affect a payroll tax cut, a zero percent payroll tax cut through executive order. I’m thinking that maybe it could just be a deferral at best.

So that’s where we’re at.

And then we have Mnuchin, who has been accused by some hard-nosed Republicans as being too soft with the Democrats in stimulus negotiations — you remember that a while back some people were saying that Mike Pence should lead the negotiations for the Republicans because Pence is viewed as more of a tough negotiator with the Democrats — but we have Mnuchin, and Mnuchin seems eager to make a deal with the Democrats.

But then we have the other Republican negotiator, Mark Meadows, and he’s frankly been the most sullen about the negotiations with his comments, he’s the guy who said recently he’s “not optimistic” that a deal will be reached in the short-term, and my read on this here is that, true to Republican concerns, Mnuchin may be giving a bit more to the Democrats here in the negotiations, so Meadows might feel like, OK, there’s Pelosi and Schumer, and Mnuchin is playing Mr. Nice Guy with the Democrats, so Meadows might feel like he has to negotiate with both the Democrats and with Mnuchin to be firmer with the Democratss, and so Meadows just might feel a bit exhausted in that role.

We know that Meadows is Trump’s Chief of Staff, he’s Trump’s guy, his personal assistant in many respects, so I think that he would likely support Trump if he tried to shoot for an executive order on some of these stimulus issues, but I’m not convinced that Mnuchin would feel the same way.

So that’s just my read on the negotiators right now having reviewed their statements made in the past few days, feel free to disagree.

We know the negotiators are meeting again today, if there is an update on that front, we also know that the Senate should be taking up unemployment today on the Senate floor, we know there’s a lot of disagreement there, a lot of different Republican solutions.

Logan Allec, CPA

Logan is a practicing CPA, Certified Student Loan Professional, and founder of Money Done Right, which he launched in July 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.

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