Coronavirus Relief Executive Actions, Explained
Discussions in DC Hit a Dead End
Last week, discussions between White House officials and Democratic Congressional leaders regarding a new coronavirus relief bill stalled. There was an hour-and-a-half “last ditch” meeting on Friday afternoon between Treasury Secretary Steven Mnuchin, White House chief of staff Mark Meadows, House Speaker Nancy Pelosi, and Senate Minority Leader Chuck Schumer, but negotiations hit a roadblock before the weekend. Although nonfarm payrolls increased to nearly 1.8 million in July and the unemployment rate fell to 10.2%, millions of people are out of work and are continuing to file for unemployment benefits. The initial jobless claims report still registered more than 1.1 million on a weekly basis and the additional $600 per week of enhanced unemployment insurance has expired.
As a result, President Donald Trump announced on Saturday that he will move forward with four targeted executive actions to provide relief to millions who are struggling around the country. These four actions include cutting taxes for workers through the rest of the year, extending unemployment benefits albeit at a lower rate, renewing a moratorium on evictions, and deferring federal student loan payments and interest through 2020.
The Four Executive Actions
There are questions surrounding the legality of Trump’s executive actions, however, here is what is being proposed.
For starters, the President is calling on “the Treasury Department to allow employers to defer payment of employee-side Social Security payroll taxes through the end of 2020 for Americans earning less than about $100,000 annually,” According to The Hill . The text states this directive could start on September 1, but Trump suggested that it could be retroactive to include the month of August.
Another memo from President Trump extends the enhanced unemployment benefits that expired two weeks ago at a reduced rate of $400 per week. At a press conference in New Jersey, Trump said , “We’re going to enhance unemployment benefits through the end of the year,” suggesting the $400 per week will last through the end of 2020.
A third action from President Trump focuses on renters and homeowners. When Congress passed the CARES Act in March, the bill included a 120-day temporary eviction moratorium for those who are in federal housing assistance programs. The moratorium also applied to those who live in a property that is backed by a federal mortgage. That moratorium expired in July. This executive order does not extend the moratorium but states that the Trump administration, “will take all lawful measures to prevent residential evictions and foreclosures resulting from financial hardships caused by COVID-19.”
Lastly, the President’s fourth executive action directs the Secretary of Education to extend federal student loan relief which is set to expire on September 30th. The President’s action continues, “the temporary cessation of payments and the waiver of all interest” on federal student loans through the end of the year.
The President’s executive actions may invite legal challenges as Trump bypassed Congress’ control of federal spending. Yesterday, Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer labelled the actions “unworkable, weak and narrow.” To that President Trump has said, “If we get sued, it’s somebody that doesn’t want people to get money. OK? And that’s not going to be a very popular thing.” As a result, political analysts Jake Sherman and Anna Palmer write for POLITICO Playbook that one thing to watch this week is if Democrats do believe Trump’s executive actions are unconstitutional, will they try to challenge them?
This is why what happens next is unclear. President Trump’s actions do not appear to include another round of $1,200 direct payments, which is something that is widely expected to be included in the next stimulus package. The relief bill that lawmakers are attempting to finalize would also direct funds to schools as they are trying to reopen. It would also likely provide funds for the Postal Service and the Paycheck Protection Program. The week ahead will offer additional clarity on these subjects and more.
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