On Saturday, August 9, President Donald Trump signed one Executive Order and three Presidential Memorandums to provide additional resources to support American families and businesses impacted by the pandemic, as negotiations between Congress and the Trump Administration over a “Phase 4” COVID-19 relief package remain deadlocked. Taken together, the President’s actions renew unemployment insurance at a reduced level of $400/week, defer the collection of payroll taxes through the end of 2020 for those earning under $104,000/year, direct federal agencies to consider measures that prevent evictions and foreclosures, and extend the payment moratorium on federal student loans. A breakdown of each executive order is below.
Negotiations between Administration officials and Democratic leaders have remained frozen since August 7, and there has been no indication of when talks might resume. Even if the President’s actions provide additional leverage at the bargaining table, a bipartisan compromise on additional relief legislation is still required to further support the whole US economy.
- In the longest of the Presidential Memorandums signed on Saturday, the President began by noting $80 billion in funds remain in the Coronavirus Relief Fund (CRF) established by the CARES Act to assist state, territorial, tribal, and some local governments and $70 billion in Homeland Security’s Disaster Relief Fund (DRF).
- He then directed FEMA to use DRF funds and states to use their CRF allocations to continue supplemental UI assistance from 8/1-12/27, 2020.
- The program would have a 75% federal match with state CRF funds usable to meet the states’ 25% cost-sharing burden. However, the memo encouraged them to “identify funds to be spent without a Federal match should the total DRF balance deplete to $25 billion.”
- The program structure, established under his 42 USC 5174(e)(2) authorities (“lost wages assistance”), would provide a $400 weekly payment ($300 federal/$100 state) to anyone receiving at least $100 weekly in existing UI benefits, pandemic compensation from CARES Act UI programs, extended benefits under 26 USC 3304, short-time compensation under 26 USC. 3306(v), Trade Adjustment Allowances under 19 USC 2291-2293, or payments under the Self-Employment Assistance program of 26 USC 3306(t).
- The additional benefits would end once the week of 12/6/2020 had passed, the DRF balance reached $25 billion (for “ongoing disaster response and recovery efforts”), or if new UI legislation is passed.
- Department of Labor Secretary Eugene Scalia was instructed to assist with implementation
- Citing conclusions from the CDC that racial and ethnic minority groups have been disproportionately impacted by the pandemic, which can lead to higher homelessness or sharing of housing and that homelessness and shelters “exacerbate and amplify the spread of COVID-19,” the President instructed the Department of Health & Human Services Secretary Alex Azar to “consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary,” identify available funds to provide housing assistance to renters/homeowners affected by the pandemic, “promote the ability of renters and homeowners to avoid eviction or foreclosure resulting from financial hardships caused by COVID-19.”
- The Order does not reinstate the eviction moratorium that expired on July 24, 2020.
- Treasury Secretary Steven Mnuchin is required to work with FHFA to “review all existing authorities and resources that may be used to prevent evictions and foreclosures” due to the pandemic.
- Relying on 26 USC 7508A, which allows him to “postpone certain deadlines by reason of Presidentially declared disaster or terroristic or military actions,” the President deferred payments on the 6.2% Social Security/OASDI wage tax [26 USC 3101(a)] for any wages made from 9/1/2020-12/31/2020.
- The deferment is limited to employees whose “wages or compensation” are under $104,000 per year and does not incur any penalties, interest, or additions.
- Treasury Secretary Mnuchin was instructed to issue guidance on implementation (no deadline was set).
- Secretary Mnuchin was also tasked with “explor(ing) avenues, including legislation, to eliminate the obligation to pay the taxes deferred under the implementation of this memorandum.”
- On March 20, 2020, the President suspended loan payments and temporarily set interest rates to 0% for student loan borrowers.
- While the initial actions were only guaranteed to last for 60 days, the CARES Act extended this expiration date to September 30, 2020, stating it is “appropriate to extend this policy until such time that the economy has stabilized, schools have re-opened, and the crisis brought on by the COVID-19 pandemic has subsided.”
- Department of Education Secretary Betsy DeVos was instructed to “effectuate” waivers and modifications to student loans under the economic hardship provisions in the Higher Education Act [20 USC 1087e(f)(2)(D)] to continue the payment suspensions and interest waivers on student loans through December 31, 2020.
- The Memo explicitly allows individuals to continue making payments regardless of suspension or waiver status.