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Can Trump issue a second $1,200 stimulus check through executive order?

President Trump has signed several executive directives related to coronavirus relief. But an executive order for a second stimulus check is likely out of his reach.

WASHINGTON, D.C., USA — After President Donald Trump announced an executive order and three executive memorandums last weekend aimed at aid related to the new coronavirus, some Americans may be wondering if he can sign an executive order to send out another $1,200 stimulus check.

The answer, most likely, is no.

Congress passed the CARES Act in March that sent $1,200 to Americans who made $75,000 or less based on their most recent tax filing, plus another $500 for each dependent child under 17.

Both Democrats in the House and Republicans in the Senate have presented similar stimulus check proposals in their HEROES and HEALS acts, respectively. But that remains on hold as both sides are in a stalemate over negotiations regarding other aspects of economic aid.

So when (or if) Americans will get a second stimulus check remains unclear. 

And the president doesn't have the power to make another stimulus check happen simply with a stroke of his Sharpie. The main reason is the Constitution, which does not give him the ability to pull money out of the Treasury Department.

"No Money shall be drawn from the Treasury but in Consequence of Appropriations made by Law," reads Article I, Section 9.

Who has that power? Congress.

“The constitution mandates that only Congress has the power of the purse — the president cannot unilaterally tax and spend,” Kris Cox, a tax policy analyst at the Center on Budget and Policy Priorities, told CNBC.

Forbes reports the CARES Act stimulus check was an advance on a newly-created refundable tax credit. That brings us back to Congress. Article I, Section 8 of the Constitution says, "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States."

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So how did Trump issue the orders last Saturday to find money to extend unemployment aid? The executive order relating to paying jobless Americans $400 per week -- $100 of which must come from states -- involves money from the Federal Emergency Management Agency. It reallocates $44 billion in federal dollars from FEMA's Disaster Relief Fund. It's not taking money from the Treasury.

Why can't Trump use that same FEMA money to write stimulus checks? Seth Hanlon, a tax policy expert at the Center for American Progress, tells Yahoo that a stimulus check is essentially a tax rebate which, again, has to come from the Treasury. Also, the first round of stimulus checks cost $270 billion -- more than six times the amount of money Trump is redirecting for unemployment.

But is the president doing an end-around with his executive memorandum on payroll tax deferral? White House economic adviser Larry Kudlow estimated Sunday that move could save employees about $1,200 through the end of the year -- the same amount as the first stimulus.

Under the president’s order, employers can defer collecting the employee portion of the payroll tax, including the 6.2% Social Security tax on wages, effective Sept. 1 through the end of the year. The order is intended to increase take home pay for employees making less than about $100,000 a year. 

But there's a catch. Employees may end up having to repay that money unless Congress steps in. Consequently, many employers may choose to continue collecting the tax and set it aside to meet that future obligation, said Michael Graetz, a Columbia University law professor and co-author of “The Wolf at the Door: The Menace of Economic Insecurity and How to Fight It.”

“I don't know how much of this is going to get into workers' pockets,” Graetz said.

As Forbes points out, every executive order can be challenged in court, such as the travel ban Trump instituted in the first days of his presidency. If he were to attempt to sign an executive order for new stimulus checks, it likely would face a lawsuit.

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