South Michigan News

As Congress failed to come to an agreement regarding COVID-19-specific unemployment payments and other emergency benefits, President Donald Trump responded by taking action through executive order and presidential memoranda, but what do those actions really mean for the average American?

WJR host Paul W. Smith recently discussed the feasibility and potential economic impacts with Patrick Anderson, founder and CEO of The Anderson Economic Group, on "The Paul W. Smith Show."

“It is confusing, and on top of everything else people are dealing with in a pandemic, Depression-level unemployment, and you have political dysfunction in state capitals and in the national capital,” Anderson told Smith. “And of course it’s very difficult for Americans to make heads or tails of this.”

Anderson said that, just like some of the executive orders made by Gov. Gretchen Whitmer, there are legitimate questions regarding how much weight the unilateral actions of an executive branch can have.

“An executive order is not a law. Neither is a memorandum,” Anderson told Smith. And there are Constitutional reasons for having that separation of powers and limits on the executive branch.

However, Anderson said that the Anderson Economic Group did an analysis of Trump’s orders, determining that they are within the scope of his powers as president. 

For instance, he does have the authority to order the IRS not to collect the payroll tax for Social Security, Anderson said. However, Anderson cautioned people to not spend that money, expecting they will never have to pay it, as all that Trump’s order does is stop the collection, and people may ultimately still have to pay the tax.

"It’s not a small amount of money. For many Michigan employees, it’s $1,000 for them this year after tax,” Anderson told Smith. “So that’s real money for a lot of people.”

Additionally, Trump has promised $400 a week as additional unemployment benefits for workers, but unlike the $600 per week that Congress had previously funded, Trump has required states to put their own skin in the game, Anderson told Smith. For every $300 that comes from the federal government, the state where the recipient resides must pay $100 to reach that $400 total.

“We’ve got 700,000 Michigan workers that are unemployed who could certainly use another $400 a week,” Anderson told Smith. However, that measure is also “on shakier ground,” he said.

Since the funds Trump has earmarked for the unemployment payments have already been appropriated by Congress for another use, Anderson said he is not certain Trump will actually be able to order it to be used to make unemployment payments.

Additionally, Anderson said that many states, especially those with Democratic governors, have said they will refuse to provide additional unemployment benefits to their residents if they are required to pay 25% of the cost.

Anderson said that he has been critical of any kind of legislation by executive order.

"We want laws passed, not executive pronouncements by either a governor or a president,” he told Smith. “But in this particular case, I would certainly hope that Michigan looks for a way to get that $300 a week for every unemployed worker in Michigan.”