The Dangers of Stimulus by Presidential Decree

trump money stimulus

Republican and Democratic elected officials are content playing politics while American’s suffer. Trump has figured out how to benefit from their bickering.

By Henry Chang

The economy is officially in a recession. Millions of Americans will soon see their unemployment benefits wither away. Optimistic projections about the trajectory of Covid-19 now seem optimistic. Even some of the staunchest right leaning Governors have extended quarantines. Forty million Americans are currently facing eviction. Food banks are seeing exponentially larger demand than ever before. The nation is on the precipice of social unrest. Meanwhile, elected officials in Washington D.C., on both sides of the aisle, are dithering over details to score political points. The disagreements centered issues large and small — from federal unemployment benefits to nutrition programs — but not the cornerstone: additional stimulus checks to relieve the millions of Americans in economic stress. Yet all of this vacillating and brinkmanship may have a political upside for Trump: He alone can deliver relief and hence purchase some loyalty from the U.S. electorate. 

For several weeks now, Trump and Congress have been battling over the finer points of the 2nd round of stimulus despite many Americans teetering on the brink of personal, economic collapse.  “We will be doing another stimulus package. It’ll be very good. It’ll be very generous,” Trump said in a recent interview. Yet after failing to hammer out a new round of stimulus last Friday, Trump is now claiming he can/will deploy stimulus money via executive order. There is little to no precedent for this action. 

Friday’s negotiations, which were widely expected to net a deal, went into gridlock and no agreement was made. White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin are expected to formally recommend Trump move forward with presidential decree. 

With critical benefits from the CARES Act already expired and Senators unable to find consensus on new coronavirus relief, Trump doubled down on his threat to use executive orders to stimulate the fragile American economy. Trump has so far not laid out a deadline for a deal to be made by lawmakers before he distributes stimulus via executive decree. “If Democrats continue to hold this critical relief hostage, I will act under my authority as President to get Americans the relief they need,” Trump proclaimed during a Friday press briefing. Trump explained his plan to use the presidential decree to prolong unemployment benefits through the end of 2020, defer federal funded student loan payments/interest, and extend the moratorium on eviction in most cases.

Trump is claiming executive orders on stimulus could be signed by the end of the week — “they’re being drawn by the lawyers right now.” The New York Times reported Friday that the orders could come over the weekend. 

Give Trump an inch and he will mismanage a mile. A scenario where Trump recklessly yields the U.S. checkbook is fraught with pitfalls. From a legal perspective, it is still not clear if he has the power to even do so. But that is not stopping him. If he is allowed to unilaterally control 2 trillion dollars of stimulus money, what stops him from going further? What stops a corrupt kleptocrat from using the federal budget as political leverage in an election year? A successful circumvention of congressional budgeting and appropriations could spell disaster for the economy as well. Imagine Trump, jockeying the machinations of the U.S. treasury with the ability to print more currency on a whim to fulfill his political or kleptocratic desires. That reality could be fast approaching. Buckle in. 

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