Today, Explained - How Trump’s relief plan helps and hurts

Episode Date: August 10, 2020

President Trump wants to resolve the congressional deadlock over stimulus relief by himself. Vox’s Li Zhou rummages through the mixed bag. Transcript at vox.com/todayexplained. Learn more about your ad choices. Visit podcastchoices.com/adchoices

BetMGM, authorized gaming partner of the NBA, has your back all season long. From tip-off to the final buzzer, you're always taken care of with a sportsbook born in Vegas. That's a feeling you can only get with BetMGM. And no matter your team, your favorite player, or your style, there's something every NBA fan will love about BetMGM. Download the app today and discover why BetMGM is your basketball home for the season. Raise your game to the next level this year with BetMGM, a sportsbook worth a slam dunk and authorized gaming partner of the NBA.

BetMGM.com for terms and conditions. Must be 19 years of age or older to wager. Ontario only. Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact Connex Ontario at 1-866-531-2600 to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with iGaming Ontario. President Donald J. Trump spent the weekend at a golf course in New Jersey, but that didn't stop him from trying to solve some of the nation's most pressing problems, namely the

fact that Congress still hasn't come to an agreement on coronavirus relief. Lee, Zoe, you've been covering that effort for Vox. It looks like the president had a very busy weekend. He did. He is trying to show people that he can get something done while Congress is deadlocked on stimulus. And he ended up issuing four executive measures in an attempt to address this issue. And that's very confusing right off the jump because the president doesn't control the purse strings of this country, correct? Correct. That's already prompted a ton of confusion ever since he made the announcement. Well, I guess it's still important, though, because the president. So let's talk about what he did. What are in these four executive measures and

why are there four of them? There are four because he's trying to address some of the major areas that have been brought up as key points people would like to see more money on. So the four subjects that they touch on are extending enhanced unemployment insurance, some type of support for evictions, deferring payroll taxes, and continuing the suspension of student loan payments. Okay, so the president addresses this, you know, expanded unemployment insurance, eviction moratoriums, payroll tax, student loans. Is there anything he missed? There's a lot that's missing, including no second round of stimulus payments, no additional funding for small businesses, and no additional money for state and local governments or schools.

And those are some pretty big misses. These are all huge priorities for people as the economy tries to recover from the pandemic and as places like schools try to reopen this fall. All right. Well, within these four executive measures addressing these four things that people really care about, how good a job is the president doing of, you know, delivering the goods? He is unfortunately not doing such a great job. In several of the cases, actually three out of the four, it actually seems like people won't really see any clear effects for quite a while. In the first case, for extending enhanced unemployment insurance, the goal is to continue to give

people an extra $400 a week via this executive order. So that's $400 instead of the earlier $600? That's correct. The problem with how he's implemented it is that $100 of the $400 is something he'd like states to chip in for, which is something that many places just don't have the money to do at this point. And additionally, he wants to set up a new system to put out these payments to people. And that alone is set to take months to actually complete. So people wouldn't be seeing these unemployment benefits for a long time. So it's going to take a while to get the money. And on top of that, he wants states to chip in for about a fourth of it. Did he consult the states on that before making this call? It definitely doesn't seem like he did because many have already pushed back and said they won't be able to handle this additional cost as they

struggle to cover current public health needs and as their tax revenues have gone down during the pandemic. So not a great outlook on that one. What about the other ones? In the other cases, we see some similar issues. For example, he's framed the executive order focusing on evictions as similar to the eviction moratorium that happened earlier this year in the CARES Act when it actually is not. What the memo that he put out actually does is it simply asks HHS and the CDC to consider extending a ban. And it asks other federal agencies to look for money to help people with evictions. So it's really just the first step in getting anything done,

but doesn't promise anything concrete at this moment. Not the best news for people expecting help from the government. Not the best news for people expecting some sort of ban on evictions from the government. What else? One of his chief goals so far has been to implement some kind of payroll tax cut. And this time around, he has tried to institute a holiday which would defer payroll taxes for people making under $104,000 a year until after the end of this year. And the goal of that is for people in that income bracket to basically see an income boost in that time. But again, that's not expected

to happen because since this is just a deferral, many companies might continue to withhold the same taxes that they have because they'll end up having to pay them anyway after the year's over. Okay, so that covers three. We got the direct aid to people. We got the eviction moratorium, payroll tax. What about the fourth one, the one about student loans? So that's the only one that's actually seen as relatively effective. It continues what was set up earlier this year in the CARES Act. It suspends the interest on student loans that are backed by the federal government and it suspends payments through the end of this year in the CARES Act. It suspends the interest on student loans that are backed by the federal government and it suspends payments through the end of this year. Well, I'm sure a lot of people will at least really appreciate that. Why go through all the effort to just like whiff on the other three? I think like what we've seen with Trump in the past, he really wants to

show people that he's doing something, but the substance of the policy he's proposing doesn't necessarily always match up with those goals. How do his fellow party members feel about it? What are the Republicans saying? It's a mixed reaction from Republicans. You have some that have responded with your typical political response of the president is doing something when Democrats have failed. And that's the message that they want to keep on repeating over and over. On the other hand, you do have some Republicans like Ben Sasse, for example, who are really concerned with the constitutional implications of what he's doing. And what about the Democrats? I imagine they're not big fans. Yep. They are not fans of this for a couple of reasons. They think what he's doing doesn't

really cover the full needs of what people require at this time and have called his proposal half-baked and narrow. It doesn't do anything. And as the American people look at these executive orders, they'll see they don't come close to doing the job. And then also, much like some of the Republicans, they're concerned too about the constitutional implications here. As in, is any of this legal? Right. And that is something that Trump himself has also acknowledged.

Well, you always get sued. I mean, everything you do, you get sued. I was sued on the travel ban and we won. I was sued on a lot of things and we won. So we'll see. Yeah, probably we get sued, but people feel that we can do it. And we're expecting it to get challenged in court pretty quickly. More with Lee after a quick break. Thank you. Explain comes from Ramp. Ramp is the corporate card and spend management software designed to help you save time and put money back in your pocket. Ramp says they give finance teams unprecedented control and insight into company spend. With Ramp, you're able to issue cards to every employee with limits and restrictions and automate expense reporting so you can stop wasting time at the end of every month. ramp.com slash explained, r-a-m-p.com slash explained,

cards issued by Sutton Bank, member FDIC, terms and conditions apply. Lee, a few weeks ago in an episode titled Stimulating America, I talked to our colleague Matthew Iglesias about the relief Congress was working on, the Republicans version and the Democrats version. What happened to those plans? Unfortunately, Democrats and Republicans are in pretty much the same place they were in when you all had that conversation. They've been at a roadblock over what they'd like to see in a stimulus for almost two weeks at this point. The coronavirus is certainly not over. It's still an enormous problem. It's still affecting communities all across

the country. And I think the American people would like to see us working together and getting an outcome like we did back in March and April. We talked about the sort of disagreement between Democrats and Republicans, the $2 trillion disagreement on how much money to spend to stimulate the United States. What were the major sticking points in the debate between Democrats and Republicans over that $2 trillion? There are a couple big provisions. The first of which is money for state and local governments, which Democrats and Republicans have disagreed on for a long time. Democrats think that states and local governments need more money right now

in order to simply cover public services because they've seen such huge declines in tax revenue. To do that, we must act boldly to support state and local entities to address coronavirus related outlays and lost revenue due to the coronavirus. We all know that we must put more money in the pockets of the American people. This is not only necessary for their survival, but it is also a stimulus to the economy. But Republicans think that offering this money would help states address budget shortfalls that they might have been experiencing even before the pandemic. So they're resistant to this idea. They want to bail out cities and states that have done a bad job over a long period of

time. Nothing to do with coronavirus or China virus or whatever you want to call it. The second issue is this question of how much more unemployment insurance the government wants to continue funding for people in the CARES Act. They included an additional $600 a week that the federal government would cover for people, and Democrats want to keep that going through the end of next January. What do the Republicans and the White House have against working families in our country

that they would begrudge them $600 of, well, absolutely necessary sustenance? Republicans, however, think that's too much money, and they want to reduce the weekly amount to about $200 and then ultimately pay people what would amount to 70% of their preexisting wages before the pandemic. When you pay people more not to work than they would get working, what do you expect?

People will not work. And that question continues to be a big issue moving forward. What are the arguments that Republicans are making opposing the Democrats, you know, obviously much more liberal spending plan? The Republicans are basically saying that right now our debt is already too high. And if we're going to talk about a $3 trillion package, that's just a sizable amount to add to the debt. I think that concern is something that a lot of people do have, but it's outweighed by the fact that we really need this money right now and that people really need support as businesses are closed and as many places have been forced to shutter because of public health restrictions.

So that is one big piece of why you see a larger number of Republicans increasingly opposing any more stimulus at all. As it's written right now, I'm not only a no, I'm a hell no. And sadly, I think this is envisioned as an opening gambit. Everyone expects the Democrats to come back with a huge wishlist of spending. Some of the most vocal members doing this have been Rand Paul, Ted Cruz, and Ben Sasse. They've all really argued that this is unsustainable

and a lot of people see it as them positioning themselves for the future as people who continue to stand for fiscal conservatism, a key tenet that the Republican Party has long used to say it's a defining quality for them. I'm very upset with my colleagues. They went eight years. They should apologize now to President Obama for complaining that he was spending and borrowing too much. He was a piker compared to their borrowing that they're doing now. So, yes, these Republicans, you know, they should have to apologize and they should by law be forbidden from ever saying that they're fiscally conservative. How much water does that argument carry with the American people?

I mean, obviously, the idea of going further, trillions of dollars further into debt isn't appealing to the average person. But I just wonder, generally, how Americans are weighing that against, say, not having enough money for rent or not having enough money to provide for their families. In this moment, it doesn't feel like it's carrying a ton of water with voters who are concerned about a lot of the things that you mentioned. For Republicans, there is a contingent of their base, which is more conservative, that we expect to probably weigh fiscal conservatism as a key part of why they're supporting certain lawmakers. So for that small group of people, I think one poll found that it was 33% of Republican voters. The issue of the debt does seem to surpass maybe other current economic concerns that people are seeing. But by and large, for the most part, it's not an issue that most voters are as concerned about as the immediate problems they're facing themselves.

How are the sort of debates playing out politically for each party? I mean, Democrats want to give more money, I imagine, to all of the states, regardless of whether they're blue or red or purple. Republicans are saying no. Democrats want to give the same amount of money to all Americans, regardless of party affiliation. Republicans are saying no. Are each party's constituents on board with each party's positions? At this point, most constituents in both parties are supportive of what Democrats are pushing. When you look at polling, an overwhelming majority across party lines is interested in more stimulus, is supportive of

more unemployment insurance. And the larger political fallout that we can expect to see from this, at least in the short term, is probably going to hurt Republicans more because they are the party in power in the White House and also the party in power in the Senate as well. You're saying it being an election year, this fight over stimulus could have some election year implications? That's right, yes. Especially for Republicans in battleground states, stimulus could ultimately be an issue that tips over swing voters who are unhappy with how they've handled this whole process. Which states are we talking about here? Shout out some names. are just a few of the places where you see current incumbent Republicans who are very vulnerable and concerned that the ongoing issues with the economy and the lack of action from Congress to address it

are going to be held against them in November. What are the senators representing those states saying? Are they on board with the president's executive orders? Are they saying we need to have more conversations with Nancy Pelosi and Chuck Schumer? They have tried to propose some of their own efforts to indicate that they're getting something done. Mitt Romney, Susan Collins, Martha McSally, they're talking about either an 80 percent wage replacement for states or a declining amount. Five hundred dollars a week in August, 400 September, three hundred dollars in October. That would be more generous than what Republicans have proposed.

And additionally, they have similarly taken that line of trying to call out Democrats for being the ones they see as obstructing the process, even though Democrats have said that they passed their own stimulus months ago. So it's not on them at this point. And all told, with the president's executive orders and the continuing fight in Congress over how to spend this money and how much money to spend and the legal challenges you said that we're all but sure to see in the coming days, I mean, where does this leave all of those Americans who are struggling? I mean, are they getting zero additional unemployment insurance right now from the federal government? And if so, how long will that last? Yes, right now what we're seeing is people receiving the standard unemployment benefit that they'd get without any federal

addition. And that's a huge range. The average amount is about $370 nationwide, but states actually implement the system themselves. So it can vary in Oklahoma, for example, the average is around forty four dollars, which is a lot less. And so people are seeing that hit immediately. And they're basically in a holding period until Congress figures something out and until any of the effects we talked about from Trump's executive orders actually take place. And when might that be? I mean, when does that go into effect, if at all? It is really unclear at this point. And I think that's why there's so much criticism of Trump's actions. We don't know when that's going to happen. And the expectation from experts is because

his version of unemployment insurance is supposed to require setting up a whole new system. It really could be weeks and even months until the next steps are fully taken. So people are just going to have to, what, maintain until then? Right. Yeah. That is the, I think, the worst part of all of this is the expectation is just for people to hold out until they get any more update on that. Lee Zou reports on Congress for Vox. She'll have updates for you at Vox.com as soon as we have them. I'm Sean Ramos for them.

It's Today Explained.