Trump's Unemployment Order Won't Work And Isn't Legal

Last Saturday, Donald Trump tried to position himself as the savior of workers in this recession. He did it by signing an executive order, which he said would provide unemployed workers with an additional $400 a week in benefits.

Unfortunately, it was nothing more than political theater -- designed to help him get reelected. The order itself is probably illegal, would not work, and has already been dismissed by governors in both parties.

One might suspect that this would make Trump angry. I doubt it does. He never really intended to help workers. He just wanted to do something that he hoped would make himself look good, and would be able to blame governors when it failed.

Here's part of how Catherine Rampell, in The Washington Post, describes Trump's pathetic bit of theater concerning workers:

Then there’s the unemployment benefit supplement. What. A. Mess.

With passage of the Cares Act pandemic relief in March, Congress created a $600 federal supplement to state unemployment benefits. This was a lifeline to millions of families. The supplement expired July 31, though, because members of Congress couldn’t come to terms on an extension. Republicans insisted the supplement was so generous that it discouraged work. (Five studies find otherwise.)

So Trump decided to supplement unemployment benefits by executive fiat, allegedly providing an additional $400 per week. The administration said it would take $44 billion from the Federal Emergency Management Agency, earmarked for natural disasters, to fund a new $300 weekly payment per worker. But states would get the money only if they kicked in $100 for each worker from their own coffers, on top of whatever benefits they had already been distributing.

States would also have to build an information technology system from scratch to administer this $400, because they cannot legally use their existing unemployment insurance infrastructure to pay out benefits that haven’t been authorized by Congress.

Now, bear in mind that states are broke.

Actually, not just broke; they’re $555 billion in the hole, thanks to lower tax revenues and higher expenses related to covid-19. Nonetheless, they’re being asked to pony up an additional $100 per week per worker, plus spend precious resources on a separate IT system when their existing unemployment IT systems are crumbling. The IT build could take weeks or months, while the $300 federal benefit that this not-yet constructed system would distribute is expected to last only about six weeks.

Additionally, the parallel unemployment benefit system might not survive a legal challenge, given that Trump may not have statutory authority to redirect congressionally appropriated funds this way.

If you were a governor, would you opt into this program under these conditions?

In a TV interview Sunday, the director of the National Economic Council, Larry Kudlow, acknowledged that the White House had … not asked states this question. Soon, though, it got an answer: Governors from both parties declared the program administratively unworkable. The bipartisan National Governors Association expressed concern “about the significant administrative burdens and costs this latest action would place on the states” and asked for congressionally appropriated funds instead.

So, Trump and high-level officials kept changing the details, apparently in an attempt to make the plan more appealing to states.

Sometimes the White House said maybe the feds would provide the entire $400 without requiring states to kick in 25 percent. Sometimes aides said other money the states were already spending would count as a sort of artificial 25 percent funding match, meaning each worker would get an additional $300, not the $400 advertised. Sometimes this phony match could be achieved by tallying what each individual worker currently receives from their state; sometimes by what a state spent overall on benefits, across all workers.

By Tuesday evening, at least five contradictory versions of this parallel benefit system had been communicated by various Trump officials, according to a running tally from Georgetown law professor David Super. And if the original design was in a statutory gray area, Super says, the revised versions waiving additional state contributions are “not remotely legal.”

That’s because the 25 percent ($100) state funding match included in Trump’s executive action wasn’t there just for kicks. It was there because it’s required under the law Trump cited as giving him authority to create this benefit program: the Stafford Act. Counting existing state spending on jobless benefits, rather than new spending, to meet the state-match requirement would also violate Office of Management and Budget Circular A-87.

Given the whipsawing design of the program, which may not be legal, plus the fact that the Trump administration has already changed the rules midstream for other covid-19 unemployment benefits programs, opting into this would be extremely risky for states.

“It’s not a matter of whether states are willing to sign on the dotted line,” Super told me. “It’s: What are you actually asking me to sign up for?"

Even if no one challenges the policy in court, states might still reasonably fear that the Trump administration would renege on the deal to reimburse them for $300 in weekly benefits, once administration attorneys and budget officials belatedly remember the Stafford Act’s requirements. In which case states might be on the hook for the entire cost of the plussed-up benefits. If a state couldn’t come up with a quarter of this money, footing the whole bill seems impossible.

Meanwhile, the White House is declaring victory, with outside adviser Stephen Moore proclaiming Trump’s toothless, legally dubious actions “a masterstroke.” Premature victory laps on administrative actions are par for the course with this administration, which has lost 90 percent of all legal challenges to its regulatory policies. . . .

But in declaring that he’s solved all these problems, President I-Alone-Can-Fix-It hasn’t hastened advanced legislative negotiations — he’s made a deal less likely to happen. And America’s unemployed will pay the price.