Trump: Democrats' mail-in ballot push is stalling stimulus deal

National Taxpayers Union Senior Fellow Mattie Duppler joins Yahoo Finance's Zack Guzman to discuss the latest outlook on a second stimulus checks amid the current gridlock in Washington, D.C.

Video Transcript

ZACK GUZMAN: Everything that we've been covering on this show has boiled down to how we will prop the economy up as we weather the storm here. And the latest updates we've gotten out of Washington DC between Republican and Democratic negotiations have not yielded a lot here, to be frank. And the latest update we got today from President Trump raising new issues with what Democrats are pushing for, mainly more funding for the United States Postal Service.

And he took issue with that for a few different reasons. Here's what he had to say on Fox Business Network a little bit earlier. Take a listen.

DONALD TRUMP: They want $3.5 billion for something that'll turn out to be fraudulent, that's election money, basically. They want $3.5 tril-- billion for the mail-in votes, OK, universal mail-in ballots. $3.5 tri-- they want $25 billion-- billion-- for the post office. Now, they need that money in order to have the post office work, so it can take all of these millions and millions of ballots.

Now, in the meantime, they aren't getting there. By the way, those are just two items. But if they don't get those two items, that means you can't have universal mail-in voting because they're not equipped to have it.

ZACK GUZMAN: Worth noting as well that not a lot of data there to support the idea that more mail-in voting would lead to fraud, which is something that the president has raised as an issue there. We haven't necessarily seen that historically when you look into that issue. But, of course, it is holding up. A lot of the aid that we're expected to see come through here, the stuff that even Republicans and Democrats already agree upon, including another round of those $1,200 stimulus checks for qualifying Americans.

So how much longer is this stalemate expected to last? Here to break that down for us is National Taxpayers Union Senior Fellow Mattie Duppler. And Mattie, I wouldn't expect you to necessarily have the quick [INAUDIBLE] answer to say, here's when a deal is going to get done. So let's dig into why it's problematic here because, as we've discussed, the extra unemployment benefits rolling off for Americans here.

And we know that there are millions of Americans now unemployed who need some sort of life raft here. So what's your take on how this could get way worse the longer it drags on?

MATTIE DUPPLER: Way worse rather than getting better, that is probably the protocol for Washington DC as most voters watch what's happening here in the nation's capital. But two things I would say on that, Zack. One, of course, is negotiation over the extended unemployment benefits has been the sticking point for the last several weeks. Now, it's interesting over those last couple of weeks as that cliff has neared when that federal expansion expired.

We've actually seen an improvement, not just on initial claims, but also on those continuing claims. You saw that earlier this morning as you previously covered. So it actually bolsters the argument, I think, for both sides, for those who are arguing that, you know, the unemployment benefits were a disincentive to go back to work. They could point to this and say, well, listen, when the unemployment benefit expired, the unemployment situation got better.

The people who are saying we need to continue those unemployment benefits can also look at this and say, we're still-- we've still got almost a million people who are trying to get unemployment benefits, even with that expiration of the federal expansion. So I think both sides might feel like their side in negotiating has been bolstered by what's happening on the ground. But another point I want to make here is the way Washington normally works versus the way it's working right now.

Typically, you've got-- if you've got divided government like we have right now, Democrats controlling the house, Republicans controlling the Senate, the House passes the bill that kind of stakes their claim on the demands they're making in these negotiations. The Senate then would pass a bill, and those would get conference, maybe not officially, but certainly in negotiations between the leaders of the two parties. And then that bill will get passed through Congress and sent up to the White House to sign.

With the enigma of President Trump, that process is completely broken down. We saw the House pass their bill last spring, several months have gone by without a Senate response. The Senate-- finally, Senate Republicans finally put forth their bill, you know, a couple of weeks ago, and they're worlds and worlds apart. Which really leaves the negotiating pathway for the president and the administration to walk in and try and negotiate with Democrats.

And that's what has been happening. You heard the president talk on "Mornings with Maria" this morning about mail-in ballots and the other things that Democrats have demanded that are extraneous to the coronavirus crisis. In normal times, those kinds of demands would fall off by the wayside because they simply would have been a flag planted in the ground. Today, because we've got the administration negotiating with Democrats and Senate Republicans watching and taking their cues from the administration, we still got a long way to go.

Because the president has taken the bait from Democrats in talking about things that are completely unrelated to the only thing that's on voters' mind right now, which is the coronavirus pandemic.

ZACK GUZMAN: Yes. I think that's a good summary there as to why we are in this nightmare scenario. And really, when you think about it, I guess there was optimism that since they had already done this and a lot of these sticking points have been negotiated previously, of course there's a lot more question marks about how long should this last now that we're here in August. But they do agree on stimulus checks, and that's one of the things I know a lot of our viewers are always interested in because, you know, free money to them.

But when we think about that, it's also, I guess, hopeful to think that it would come out quicker if these talks still drag on. But if they agree, it would come quicker because we already have that in place. But that's not necessarily the case, just considering how we've seen things break down before. What's your take on how it might be easier if we do get an agreement to get cash out at the door now that these systems are a go?

MATTIE DUPPLER: Zack, National Taxpayers Union, my organization, has been arguing from the get-go that what Congress should do, it should build on the success of the CARES Act because, of course, that was a bipartisan bill that had buy-in from both sides and the president signed into law. So things like those PPP loans and extra support for businesses in the form of tax credits.

And those stimulus checks all could have been consensus items that we could have had done months and months ago, but of course, politics have gotten in the way. Now, the reason stimulus checks are so popular is because they are effective. President Bush elected to do this in 2008, the administration will actually do this in the spring because you can get them out the door pretty quickly.

And Americans realize, when they get a check, that it feels like free money. Let's contrast that to what the president has decided to do with the payroll tax cut. Americans don't necessarily realize that they get a payroll tax cut because Americans, data shows, do not pay that close attention to their paycheck. Secondly, as we've talked about before, with over 50 million people filing for some form of unemployment over the course of this crisis, if you don't have a paycheck, you don't have a payroll tax to cut.

So that's not going to affect the people who need it most. And thirdly, it's just a morass of administrative rules to get that kind of thing out the door. It's not quick, easy, and painless like cutting a check, particularly since Treasury has already gone through this exercise in the spring. So I agree with you. Stimulus checks would be, I think, kind of the lowest common denominator here. We could see the two sides agree on that.

But certainly, because the stakes are so high now and we've waited so long to get an agreement, I don't see either side coming to the table with small ball items. They want a big deal, and those negotiations are still going to take some time to finish out.

ZACK GUZMAN: And not-- I mean, not overlooking the fact that there are still a lot of questions about President Trump's plan on the payroll taxes and whether or not they'd be challenged in court. The US Chamber of Commerce also sending a letter to Secretary Mnuchin yesterday about concerns that businesses have over who might be liable. Should that get reversed? Could turn into a whole big tax mess, and, you know, to-- not to get into a discussion on what that tax mess might look like, but shifting--

MATTIE DUPPLER: Oh, come on, Zack, that's my bread and butter.

ZACK GUZMAN: I know it is. I know it is. But you know we've only got so much time here. When shifting into, kind of, the other issues at hand, it would kind of be a little bit of an oversimplification. I guess this isn't exactly a, you know, a can of worms that's any more fun to dig into. But Republicans themselves aren't necessarily aligned on a lot of these issues.

We've heard some budget hawks come out and talk about the deficit there. In July, it came down because we saw tax receipts get delayed from April to July. But what do you make of that deficit when we think about year to date expected to swell? It's already swollen to $2.81 trillion compared to 867 billion in 2019, last year.

And it's going to top what we saw in the Great Recession. So what's your take on that and whether or not it might be a reasonable time to start thinking about reeling in spending?

MATTIE DUPPLER: Well, Zack, I have always warned that a fixation on the deficit is a little bit misplaced. Because the deficit is a pretty meaningless number between two very meaningful numbers. That is taxes and spending. If you're spending too much and not taking in enough on taxes, that's a problem. If you're taking in a ton on taxes and spending too little, that's also an imbalance that has a major effect.

So when it comes to focusing on the deficit, I don't find it to be extremely meaningful when we're talking about what public policy is the right response to the current circumstances. And that relates specifically to today. Given the fact that you now have, you know, everyone's been saying for the last four years, right? We've got the most populous president we've ever had in the White House.

And he's presiding over this acute shut down in business, this acute shutdown in the private economy. One of the biggest drop offs in unemployment we have ever seen. And so to argue that the government doesn't have a role and a responsibility to the employers and the workers who've been affected by that I think is not just anathema to maybe the public understanding of populism, but anathema to really what, I think, voters across the political spectrum would say is the proper role of government.

So long as we're in the throes of what is an extraordinarily unique circumstance, I think questions about the deficits certainly are well-founded. And that's why NTU has been arguing that any kind of-- any kind of support that goes out the door needs to have safeguards so that those taxpayer dollars are being spent wisely. But I certainly think that the argument about the deficit shouldn't-- shouldn't forestall the conversation about how important it is to have some kind of support, confidence, and certainty for business-- business owners and workers as we try to get back to some semblance of normal, which we know could still be a far way off.