Following the breakdown of stimulus talks on Capitol Hill, President Trump signed four executive actions Saturday, Aug. 8 aimed at providing economic relief to Americans struggling amid the ongoing COVID-19 pandemic. The actions would provide $400 per week in supplemental unemployment aid, provide assistance to renters and homeowners, defer payroll taxes for those earning less than $100,000 per year and defer student loans.
In spring 2020, Congress approved a supplemental weekly unemployment benefit of $600 per week to Americans filing unemployment, which was in addition to what they received in state benefits. The benefit expired July 31, 2020. The President’s order would provide up to $400 per week in expanded benefits, with 75% coming from the federal Disaster Relief Fund and states required to pick up the tab for the remaining 25%. The supplemental aid is on top of existing state unemployment benefits, which vary from state to state.
Assistance to Renters & Homeowners
The CARES Act, passed by Congress in March, issued a temporary 120-day moratorium on evictions. That federal moratorium expired July 24, 2020.
President Trump’s executive action would encourage federal efforts aimed at helping renters and homeowners who fail to make their monthly payments avoid eviction or foreclosure. It directs the Department of Housing and Urban Development (HUD), the Department of Health and Human Services (DHHS) and the Centers for Disease Control and Prevention (CDC) to enable renters and homeowners to stay in their homes, including via financial assistance from HUD for those struggling to pay rent or mortgage payments.
Payroll Tax Cut
President Trump’s executive action defers the payroll tax from Sept. 1 to Dec. 31, 2020, for Americans making less than $100,000 per year. Once the tax holiday comes to an end without further government action, employees would need to repay the federal government. However, President Trump said he would make the tax cut permanent if re-elected in November, which critics argue would place an increased burden on the country’s already struggling Social Security and Medicare programs.
Student Loan Relief Extension
The President’s executive action extends the suspension of federal student loan payments and sets interest rates to 0% through Dec. 31, 2020. The current provision, which Congress passed in March as part of the CARES Act, was set to expire on Sept. 30.
The President’s actions are not without controversy, as measures relating to taxes and spending typically require legislative action by Congress. Democrats are expected to challenge the executive actions in court. Additionally, the executive actions do not address additional stimulus checks or the Paycheck Protection Program (PPP), which expired Saturday.
On Capitol Hill, Democrats have proposed $3.4 trillion in additional economic relief, while Republicans have proposed $1 trillion. White House officials were hoping to reach a deal on a smaller bill that included unemployment benefits, funding for schools and the PPP.
KJK will continue to monitor developments and provide updates as they become available. If you have any question or would like to discuss further, please reach out to Scott Norcross at firstname.lastname@example.org or 216.736.7264.