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Trump's COVID orders too little, too late to help U.S. economy, experts say

EconomyAug 11, 2020 03:00PM ET
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© Reuters. U.S. President Trump holds a coronavirus disease (COVID-19) pandemic briefing at the White House

By Jonnelle Marte

(Reuters) - U.S. President Donald Trump's weekend attempt to sidestep stalled congressional negotiations over the next coronavirus aid package will do little to boost the economy, experts said.

Trump's executive order and presidential memoranda, introduced on Saturday, would temporarily extend enhanced unemployment benefits at a reduced amount of $400 a week, defer payroll taxes for some workers, suspend federal student loan payments and potentially provide eviction relief. Even if he can overcome the legal questions surrounding his actions, the efforts may not pack much punch, economists say.

Mark Zandi, the chief economist at Moody's (NYSE:MCO) Analytics, calculated the orders could provide just over $400 billion in total relief. JPMorgan Chase (NYSE:JPM) economist Michael Feroli wrote in an email note on Monday that the initiatives could contribute "less than $100 billion" in stimulus.

That's versus the $1 trillion aid package proposed by the Republican-led Senate or the more than $3 trillion aid bill passed by the Democrat-led House of Representatives.

Altogether, the president's orders would add up to 0.2% of GDP, a "negligible amount," according to estimates from Lydia Boussour, senior U.S. economist for Oxford Economics.

Millions of jobless Americans could be financially squeezed this month after the expiration of a $600 weekly supplement to unemployment benefits, the winding down of eviction moratoriums across the country and the end of the Paycheck Protection Program, which supported small businesses.

Some of the measures proposed by Trump would take time to set up and could be challenged in court, experts said. "They're not going to do anybody any good in the here and now," Zandi said in an interview.

The president's efforts may also not reach all of the workers relying on aid. For example, the $400 weekly supplement to unemployment benefits would only apply to people receiving at least $100 in state unemployment benefits and could exclude some low-income workers. The added benefits, which would be financed by $44 billion from the Disaster Relief Fund, would only last about five or six weeks, Feroli estimates.

And the program would put more pressure on states - which have already seen their budgets strained during the crisis - by requiring them to pay 25% of the $400 supplement.

A measure that would defer employees' share of the Social Security payroll tax from September through December is not expected to have a noticeable impact on spending because it helps people who are still working, wrote Boussour. Workers would still owe the taxes later.

Trump's policy move on housing may not lead to immediate relief for people who are falling behind on their rent or mortgage payments.

The president asked the heads of Housing and Urban Development and the U.S. Treasury to look into ways to provide assistance to renters and homeowners and to research legal actions that could help to avoid evictions and foreclosures - rather than spelling out any concrete actions.

The measure that is most likely to become reality is the extension of a freeze on federal student loan payments, Zandi said. That is set to expire Sept. 30; Trump's measure would extend it through the end of the year.

The step could save borrowers $15 billion to $20 billion, Zandi estimates. "For the students that's a big deal, but for the macro economy in a crisis, it's really not meaningful."

Trump's COVID orders too little, too late to help U.S. economy, experts say
 

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Comments (12)
Eugene Judd
Eugene Judd Aug 11, 2020 9:25PM ET
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164k+ dead Americans and counting. The stock market doesn't reflect what's going on in real life. And throwing trillions to save companies that were effected by the pandemic is certainly socialistic policy. If you're such a capitalist, then we should have let them all go under and the ones with the best balance sheets would have survived. Since when have cruise and hotel companies become so important? But, bail them out and then refuse to fund states who by their own logic, through no fault of their own saw their revenue plummet. Why don't you find out how much money those blue states put into the pot and how much those red states take out. You'll find out who really has their hands out and is supported by us blue states.
eddie galss
eddie galss Aug 11, 2020 4:06PM ET
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clearly it is took little too late as stonks have hit all time highs /s... the only places being hurt are the blue-states destroying their economy by keeping the lockdowns pointlessly going until november because their DNC overlords have told them to for their ulterior politician motives
Clinton Ronnenberg
Clinton Ronnenberg Aug 11, 2020 3:31PM ET
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Hey Reuters! Enough with these Trump feel-good pieces! You’re so pro-Trump. Stop already.
Thom Miller
Thom Miller Aug 11, 2020 3:16PM ET
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Trump just doesn’t get it. His slow response to the virus resulted in many, many more American cases/deaths than there should have been. That resulted in creating an overly sluggish US economy, which destroyed the robust growth Trump inherited from Obama and Biden. And now Trump signs more Executive Orders, none of which have any real teeth to help the economy recover and which may be illegal. Trump pulled this latest stunt just to put on a show. I’m surprised he didn’t yank a Bible out of his pocket and hold it upside down over his head to dramatize this latest charade.
Rational Optimistic
Rational Optimistic Aug 11, 2020 10:24AM ET
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It’s a shame how inefficiently the gov acted.
Tom Romero
Tom Romero Aug 11, 2020 10:02AM ET
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We're all tired of Trump's incompetence and lies.
Marco cuevas
Marco cuevas Aug 11, 2020 8:31AM ET
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They could of been solving this 2 months ago while people still dying.  Relying on data and sitting on there rumps for 2 months did no one any favors especially the ones that really need the assistance.  This presidency is a disaster for Americans.
Noel Amparo
Noel Amparo Aug 11, 2020 8:15AM ET
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"Experts"
dave knight
dave knight Aug 11, 2020 8:09AM ET
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trump V Biden. the great baby boomer generation isn't looking so great anymore. after another bailout to the same age group they have now found the worst to presidential candidates possible. baby boomers ruined America with there reset button and believe they were so "special" and "unique".
William Smith
William Smith Aug 11, 2020 8:09AM ET
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So interesting that the bailout money went to non baby boomers, as those are the generstions who needed financial help.
Eric Haberman
Eric Haberman Aug 11, 2020 8:04AM ET
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lol
Andrew carson
Andrew carson Aug 11, 2020 8:01AM ET
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Experts in c rapola
Brady Murray
Brady Murray Aug 11, 2020 7:57AM ET
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These so called experts math is all over the place. So the bottomline is he should just say the heck with it. Its all a waste? LOL. More Trump bashing.
 
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