By Jonnelle Marte
Aug 11 (.) – US President Donald Trump’s attempt to avoid stalled negotiations in Congress for an upcoming coronavirus aid package will not do much to boost the economy, experts say.
Trump’s executive order and presidential memoranda, filed Saturday, would temporarily extend improved unemployment benefits by about $ 400 a week, defer payroll taxes for some workers, suspend payments on federal student loans, and potentially provide a remedy for eviction.
However, even if they can overcome the legal issues surrounding the measures, the efforts would not be very successful, economists say.
Mark Zandi, chief economist at Moody’s Analytics, estimated that the orders could provide just over $ 400 billion in total relief. JPMorgan Chase economist Michael Feroli wrote in an email note Monday that the initiatives could contribute “less than $ 100 billion” in stimulus.
The total compares with 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.
In total, the president’s decrees would add up to 0.2% of GDP, an “insignificant amount,” according to estimates by Lydia Boussour, senior US economist at Oxford Economics.
Millions of unemployed Americans could come under financial strain this month after a $ 600 weekly supplement to unemployment benefits expires, the end of nationwide eviction moratoriums and the end of the Paycheck Protection Program , which supported small businesses.
Some of Trump’s proposed measures would take time to establish and could be challenged in court, according to experts. “They’re not going to do anybody any good in the here and now,” Zandi said in an interview.
Nor will the president’s efforts reach all workers who depend on aid. For example, the weekly $ 400 supplement to unemployment benefits would only apply to people who earn at least $ 100 and could exclude some low-income workers.
The additional grants, which would be funded by $ 44 billion from the Disaster Relief Fund, would only last about five to six weeks, Feroli estimates.
In addition, the program would put more pressure on states – which have already seen their budgets under pressure during the crisis – by requiring them to pay 25% of the $ 400 supplement.
A measure that would postpone the contribution of employees to the Social Security payroll tax from September to December is not expected to have a noticeable impact on spending because it helps people who still work, Boussour wrote. Also, workers would still owe taxes.
Trump’s housing move may not lead to immediate relief for people who are behind on their rent or mortgage.
The president asked the directors of Housing and Urban Development and the Treasury to find ways to provide support to tenants and homeowners and to investigate legal options that can help prevent evictions and foreclosures, rather than detailing concrete actions. .
The measure that is most likely to come true is the extension of the freeze on federal student loans, Zandi said. This measure will expire on September 30 and Trump will extend it until the end of the year.
The move could save borrowers between $ 15 billion and $ 20 billion, according to Zandi. “For students it is a big problem, but for macroeconomics in a crisis, it is insignificant.”
(Reporting by Jonnelle Marte; Additional reporting by Brad Heath; Edited in Spanish by Javier López de Lérida)