Capitol in Washington, DC

Coronavirus Relief Executive Actions, Explained

Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

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.

What’s Next

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.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.

TLS 1.2 Encrypted
Equal Housing Lender