U.S. markets close in 1 hour 36 minutes
  • S&P 500

    3,343.12
    -8.48 (-0.25%)
     
  • Dow 30

    27,508.64
    -75.42 (-0.27%)
     
  • Nasdaq

    11,110.37
    -7.16 (-0.06%)
     
  • Russell 2000

    1,502.27
    -8.07 (-0.53%)
     
  • Crude Oil

    39.17
    -1.43 (-3.52%)
     
  • Gold

    1,901.60
    +19.30 (+1.03%)
     
  • Silver

    24.43
    +0.83 (+3.50%)
     
  • EUR/USD

    1.1747
    +0.0078 (+0.67%)
     
  • 10-Yr Bond

    0.6460
    -0.0170 (-2.56%)
     
  • GBP/USD

    1.2857
    +0.0015 (+0.12%)
     
  • USD/JPY

    105.6540
    +0.1350 (+0.13%)
     
  • BTC-USD

    10,720.33
    +17.83 (+0.17%)
     
  • CMC Crypto 200

    220.49
    -9.18 (-4.00%)
     
  • FTSE 100

    5,897.50
    -30.43 (-0.51%)
     
  • Nikkei 225

    23,539.10
    +27.48 (+0.12%)
     

Breaking down Trump’s four executive orders for economic relief and what comes next

Yahoo Finance's Rick Newman breaks down the four executive order Trump signed this past weekend and what these orders will accomplish.

Video Transcript

AKIKO FUJITA: Treasury Secretary Steven Mnuchin says he is prepared to put more money on the table to advance talks on the latest stimulus bill. But Republicans, Democrats are still divided on just how much is needed to jumpstart the economy. Meanwhile, President Trump signing an executive order over the weekend extending, among other things, the federal enhanced unemployment benefits with help from states.

Let's bring in Rick Newman for the very latest on this front. So, Rick, let's talk about what the sticking points are right now in terms of, not the total amount, but the specifics of what Democrats and Republicans are asking for.

RICK NEWMAN: Yeah, there are a lot of sticking points. It's not just one or two issues they're divided on.

So the first one is just the overall price tag, and that gets to some of the specific items. I think the biggest gap is on the amount of aid that should go to states and cities. The Democrats want about $1 trillion in aid for states and cities, and the Republican number is around $150 billion. So that's a huge gap. And that's kind of a ideological difference as well.

I mean, Republicans, some of them at least, are still-- are balking at the cost and staying [AUDIO OUT]. We can't just spend unlimited amounts of money. And it's basically saying now is the time to do everything we can.

In terms of the-- some of the ideological differences, the Democrats want about $3.6 billion for election security. $3.6 billion is effectively zero, given the scale of this bill. And Republicans say $3.6 billion is too much. They want something like-- I think it's around $500 million. So that's a big difference.

And then on the unemployment number, should it still-- should it continue to be $600? Democrats say yes. Republicans say it should be $200 a week. You'd think they would meet in the middle at $400 per week, which is what President Trump said-- has said he would be OK with. But they can't agree on that either. And there are many other smaller issues they can't agree on. So this is really bogged down.

AKIKO FUJITA: So Rick, let's talk about the executive orders that were signed over the weekend, because there's some debate about what exactly the president can do as a result of this, given that Congress still needs to approve any kind of federal funding or spending. So what exactly does President Trump's orders do, or what does it set in motion?

RICK NEWMAN: Yeah, it's very confusing. So he wants to use money from other accounts, among other things, to continue a benefit-- a weekly unemployment benefit at around $400 per week. But it's completely unclear whether the system can handle it-- handle the way Trump wants to set that up.

And you got to remember, it's state by state unemployment insurance systems that have to administer this. And Trump wants the money to be split 75% from the federal government, 25% from the states. But that is probably too complicated to get the checks out the door. So even if that's legal, and I think there either already are or will be legal challenges to all of this, it's not clear the system can even handle it.

Another thing Trump wants to do-- very odd-- is defer the payroll tax cut-- or the payroll tax that individuals owe. And this would apply to people who earn up to about $2,000 a week, which is about $104,000 a year. Above that, you wouldn't qualify. So deferring that tax means that, for now, that 7.65% of your income would not be taken out of your paycheck, but you would actually owe that money back in 2021.

So Trump cannot cancel a tax. He cannot raise a tax. He can lower-- he cannot lower a tax. Congress has to do that through legislation. He thinks he can defer a tax, so instead of paying it this year you pay it next year.

But unless Congress comes along later and actually forgives that tax, people are just going to owe it in 2021. So think to yourself, would you want-- would you call that a stimulus payment? I don't think so, because you're getting money now that you just have to pay back a few months from now.

ANDY SERWER: Hey, Rick, who stands the most to lose-- or let me ask it this way. Who's most at risk here, the president, the Congressional Republicans, or the Congressional Democrats?

RICK NEWMAN: So the analysis over the weekend is that President Trump actually gains a little bit by doing these executive actions, because at least he can say, I did something. I don't have much power here, but at least I did something while Congress is doing nothing.

In terms of who wins or loses among Republicans and Democrats in Congress, I think once it becomes evident that one party or the other is on the losing side of this battle-- and this is mostly about PR at this point-- I think that's the thing that will get a deal done. So Democrats think they have the upper hand. Republicans think they can hold off and that fiscal discipline message might work for them. The moment polls or some other indicator indicates that one party is losing the PR battle on this, they're going to cave, and that's when we'll get a deal.

AKIKO FUJITA: And Rick, we've seen the president take this route on a number of issues over the last four years. Essentially, when he sees Congress not moving forward on what he thinks needs to be done, he signs an executive order. How does-- how do the number of executive orders he's signed compare with some of his predecessors?

RICK NEWMAN: Yeah, there's some new analysis out from the think tank American Action Forum-- very interesting. So if you think presidents lately have been doing more executive orders, you're right about that. Obama had his fellow Democrats in charge of Congress for only two years, so six years he faced a hostile Congress that made it very hard for him to get things done. So Obama pursued a lot of executive actions, and Republicans really criticized him for that.

You remember, Obama was supposedly aloof. He never talked to members of Congress. He didn't even give it the old college try. He just tried his executive actions. Well, this new analysis shows that President Trump is on pace to match Obama in terms of executive actions if he were to go all the way through a second term. So in other words, he's-- [AUDIO OUT]

AKIKO FUJITA: It looks like--

RICK NEWMAN: --executive actions that Obama was around this time in his presidency.

AKIKO FUJITA: OK, I guess it points to just how much gridlock we've seen in Congress over the last several years, the fact that we're seeing increasingly presidents turn to executive orders. Thanks so much for that, Rick.