Are already financially strapped. These are republican and democrat winners. Republican and democratic governors. Not eager to take over funding the federal government is supposed to be providing. Trump has not had a lot of takers on these offers and right now these checks are not going anywhere until some governors stepped forward. David it does feel like a game of chess. You heard secretary mnuchin say weve already given the money you need to spend, there a much of money youve not spent from the cares act. Craig i do not think the states see it that way. It is funny how the treasury secretary does the at that way. Theres also a game of tit for tat where trump looks at all the states, previously the hardest hit states for the democratic states. Your illinois, new york, california. Now you will have the republican states, florida, arizona. Trump team has been critical of the states handling of the finances, and some of the states budget Balance Sheets are awash in redp you would illinois is known for its pension problems awash in red. Illinois known for its pension problems. Trump does not want to bail out states. If i were donald trump i would be thinking more about the people and less about the politicians. People have been relying on 600 Unemployment Insurance, they are getting zero dollars. Im not sure i would want to be the president of the United States when a lot of people getting those checks see that evaporate. They are looking to the white house for leadership. Trump is trying to punt. I think trump will take the blame. Orid whether it is 300 400, at least it is some money. Do have a sense of how fast he could get to the people . Couldnts there fast, President Trump say congress could not get it done, i saved you . Craig this is the game of chess. Almost a game of chicken. The two cars are speeding towards each other. Right now the democrats are holding their ground, saying what trump did is constitutionally illegally. It is congress who allocates the money. Family trying to put food on the table is not thinking about constitutional law. I think democrats feel like they have the upper hand, and what you can read into that as there were no negotiations at this point. People who have been following ,his, mnuchin and mark meadows wearing a path up to capitol hill, there are no talks scheduled. Everyone has retreated to their corners waiting for the other person to make the first move. No one is making that move. It is adavid complicated game of chicken, better than chess. Thanks to craig gordon. One part of one of those executive orders suspended payroll tax payments until the end of the year, something mr. Trump had wanted to get into the stimulus bill. We welcome mattie doppler, founder and president of Forward Strategies and a senior fellow for policy at the National Taxpayers union. Always great to have you on when it comes to taxes. Explained was how this works, this payroll tax. It is not clear what employers will do. It. Ie you nailed it is not clear what employers will do, and therein lies the problem. The administration only has the problem to work with deadlines when it comes to taxes. They do not have the authority to appeal taxes or prevent people from paying taxes. That is what happened with the deadline for income taxes. The treasurer used its authority to push that deadline back. When it comes to the payroll tax, the question is who is the taxpayer and what is it liable for. If youve ever gotten a paycheck, despite the fact it has come out of your paycheck before you see it, your employer is responsible for making that change in your taxable income. The question for employers is what the date do with the payroll money what do they do with the payroll money the president wants to go directly to workers . Employers are looking at being liable for them at the end of the year. That creates a problem for businesses, particular right now as they struggle for uncertainty in uncertain economic times. David as you say, there are statutes that require fica taxes to be taken out. Does the president have the authority to delay collection . Mattie the delay is not the question, the question is on the impact of people the president wants to impact. This will go to voters making less than 100,000 a year, but the employers are the ones responsible for making that change. If employers will stop withholding the Social Security taxes for workers, that means those employers need to make up that cash somewhere if the Administration Says we deferred those taxes but now the deadline is back on schedule, businesses and the employers in that scenario will be liable for the taxes. If you are a business facing an uncertain couple of weeks and years, what you will do is sit on that cash. Send it youring to workers, you will hold onto it until you know you will not be liable for the Tax Liability at the end of the year. David in a prior life you work on capitol hill. President trump has made no secret of the fact he wants to cut payroll taxes. Does this put more pressure on congress down the road to cut the taxes . Mattie there are a couple of idioms when it comes to tax legislating. What is that inertia does work. When youre looking at the next couple of months, if the deferral is to go into effect, say there is a change in power, change in administration after the election, then there is the onus on the next administration to say what they are going to do with the Tax Liability. No politician wants to be the politician raising taxes in a recession, particularly when they are taxes on workers. The challenge with the payroll tax workers one taken out of their paychecks do not necessarily wanted taken back in. That is in 2008 president bush shopping for stimulus checks, President Trump doing the same in the spring. People tend to see that as free money in their pockets rather than getting a bump up when their payroll taxes are diminished. That will be a question of politics into next year. The inertia will be on the side of taxpayers when it comes to reconciling that deferral. There is no guarantee employers will not be on the hook for payroll taxes when the executive order expires. David that is employers, that his employees, that is President Trump. We should talk about why you had the taxes withheld in the first place. They go for Social Security and medicare. That is third rail. How do you cut the taxes without cutting back on the benefits . Mattie that is right. The benefits are the owners of the Treasury Department. The Treasury Department as the trustee of the Social Security trust fund. The treasury has said benefits Social Security actuaries have told us that because of the downturn even with the downturn in employment, it only creates a little bit of dent in the trust fund solvency, moves the solvency data of six months or so, but we are still looking at years and years and solvency. Benefits are in peril. When it comes to the political argument about the executive order, certainly the president has opened himself up to criticism when youre looking at Social Security taxes. In 2011, when the Social Security tax was cut, an act of congress was used to do that. The general fund was used for a play some of the revenues involved with the tax cut. Expert, do you think people who make 100,000 or less, do you think they will see more money or not . With all of the questions on taxes, it certainly depends. If employers can figure out a way to withhold taxes from employee paychecks, those employees would see more money on their paychecks. The bigger question into elections is whether or not they notice. As we saw with the education of the 2016 tax law, people whose top 20 extra dollars a month in their paycheck did not seem to notice, even though over the course of the year it adds up to thousands of dollars. When it comes to how sensitive taxpayers are to their paychecks and their manipulation because of taxes, that is an outstanding question. When it comes to executive order , the application, particularly because employers are in charge, will be tricky. David always great to have you with us. That is mattie duppler, founder and president of forward strategist and senior fellow at the National Taxpayers union. Coming up, we go through the politics of the executive orders with bloomberg political contributor jeanne zaino. This is balance of power on Bloomberg Television and radio. This is balance of power on bloomberg televion and radio. I am david westin. We turn to Mark Crumpton for first word news. Mark covid19 does not seem to follow the seasonal pattern other viruses do. That is according to the world health organization. Unlike other viruses like the flu that spread mainly in the winter, the coronavirus pandemic is picking up steam in the summer. Demonstrated has no seasonal pattern so far. It has clearly demonstrated that if you take the pressure off the virus, the virus bounces back. That is the reality. You can call that a second wave, second spike, flareup, you can call it anything you like. Take the pressure of the virus, the virus will bounce back. Mark the who is urging countries even where covid19 appears to be under control, such as those in europe, to maintain measures to slow the spread of the virus. In lebanon, the government has resigned over the massive explosion in beirut that killed more than 150 people and injured thousands. It also led to violent protests. The explosion was caused by several thousand tons of material left at the countrys main port despite repeated safety warnings. Violence on the streets of chicago. Hundreds of people smashed windows and battled with police in the magnificent mile shopping district. There was an exchange of gunfire. It is not clear what caused the virus. Antipolice graffiti was seen in the area. More than 100 people were arrested in 13 officers were said to have been injured. In portland, oregon, violent protests continued for another night. Demonstrators used a mortar to large commercial grade fireworks at police, injuring two officers. Protesters managed to get inside the Police Union Building and set afire. The protests in portland have been nightly for 70 days since george floyd was killed in minneapolis. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Mark Crumpton. This is bloomberg. David . Reshufflesident trump the political deck in washington on saturday with those executive orders which went around congress. To take us through the politics of the maneuvering, we welcome jeanne zaino, professor of Political Science at ionia college. Last time we talked was friday night. The president said he would do the executive orders. He did it. What does it due to the calculus on capitol hill . Jeanne it was a bizarre weekend because we were told the president would not be making any public statements, and then he came out friday and saturday signing the four executive orders. He hit on four key areas. Because wes happened have seen representatives from the white house unable to come to an agreement or get close. The president said he was going to take these actions. The actions he took raised substantial legal questions, constitutional questions. Then there is the substantive aspect. Will it help the people that need to be helped . There is all kinds of messiness regarding his actions. As you were just talking about, no plans for congress and the white house to meet to strike the kind of deal the American Public needs. You mentioned constitutional challenges. We will get into that. As a practical matter it will take courage from any democrat to sue to keep the money away from the people. Who will bring the lawsuit . Jeanne where he heard nancy pelosi, unable and unwilling to answer the question of whether they would take legal action. The president and his team almost dared them to take legal action. The reality is we are probably going to see legal challenges from somewhere because it does raise questions, and of course the fact is what the president has proposed to do, even if there are no legal challenges, which is unlikely, it is hard to imagine it works at all for it works in the way he would like it to. We have already heard governors like Governor Cuomo say the states do not have the funding needed to help supplement. The president is saying the fed will cover 75 , states cover 100 or 25 . It is unclear if the governors, even republican governors, will agree to do that. You cannot get into the system unless your governor agrees to that. Then you have to set up a program to get the money to the people. At the very best case scenario, this would be a Long Time Coming for the people on the ground to be able to get this kind of aid. David in the end, does this make a deal on capitol hill more likely or less likely . Who feels more pressure given with the president has done with executive orders . Jeanne it makes a deal less likely at this point. That is the frustration. I wish the president would have spent more of his time he does not own all of this. Democrats cannot come to a deal either. More time trying to big his own Republican Party together. That is where we are at an impasse. If you have many republicans saying they do not want to do this kind of spending, and obviously democrats have been unwilling to come down enough. If the president could get his own caucus to appoint representatives, you could get Mitch Mcconnell to the table, you may have a better chance. None of that seems to be in the offing, at least in the near term. I cannot imagine congress or the president wants to go to the election not having a deal this because people are suffering. David exactly. This is most important for the men and women out of work who do not have money to pay their bills. There are political consequences for the november 3 election. We now have some polls from cbs within the last 24 hours indicating that particularly in wisconsin and pennsylvania, President Trump lagging behind joe biden, consistent with other poles we have seen. Jeanne absolutely. Joe biden is up six points in these two states the president one in 2016 and he must win pennsylvania and wisconsin. Of course, in your home state of michigan, he is down by 11 and it looks like the republicans theall but going to cede state to the democrats. The math in terms of the battlegrounds for the president is shrinking. When we look behind the numbers, a lot of them have to do with covid. The president still gets fairly good marks from voters on the economy as it was before the pandemic, but they are not confident of the independent voters he needs and those states that he is in the best position to manage this in terms of the pandemic. You are seeing people feel more comfortable with joe biden. That is where the president seems to be losing his support in those states. There are wrinkles. You look at a state like pennsylvania and New Hampshire, where we do not have things like College Students returning in as large numbers as we might have to register to vote. The president s team feels like they may be out of pull out of state like New Hampshire for those types of reasons. They are still battling, this is still too early to call. They have to be very frustrated by joe bidens lead in the state and the fact the president does not seem to be able to show those independent swing voters he can manage the pandemic. David to tie it all up, that same poll suggests people are more concerned about how coronavirus is being handled than about the economy. Issues, does pocketbook now people are saying we are mainly concerned about the pandemic. Jeanne it is directly tied into the economy, to education, that is what we are seeing. When you and i talked three or four months ago, six months ago now, the economy usually is number one. As that drops back, that is a problem for the president and his team. They are hoping this vp selection by joe biden turns the page and they can talk about joe biden and not the president s handling of the pandemic. David i want you to stick around for the second hour balance of power on the radio because we will talk about exactly that, bidens vp selection. That is jeanne zaino. This is balance of power on bloomberg televion and radio. This is balance of power on bloomberg televion and radio. I am david westin. Time to check it on the markets. The nasdaq is deciding it is a good day to take some money off the table with the meantime, washington cannot get its act together on stimulus. Here to take us through it is scarlet fu. Scarlet we are seeing a bit of an unwind of recent Market Trends now that the bulk of earnings season is over and we have a political stalemate. What we are seeing today is small caps, which is a proxy for value outperforming, and also industrials represented by the Dow Jones Industrial average doing better than the s p and nasdaq. A dent iny makes a what we have seen so far this year. The nasdaq regularly closing at record highs, leaving Everything Else behind in its wake. We are 90 of the way through secondquarter results and on average s p 500 Companies Posted 11 declines in sales growth, 9 declines in earnings growth. Only two sectors reporting topline and bottomline growth. Tells you the state of the world. David exactly. What about the state of washington . We did have executive orders from President Trump. Are the markets reacting to that . Scarlet people expect washington to come up with something at the 11th hour. They are conditioned to think that will come together at the end. Goldman sachs estimates the president s executive orders by sometime and pushes