President Donald Trump on Saturday attempted to sidestep a Congress stalled over talks for economic relief to Americans by reviving unemployment benefits and looking at ways to halt evictions, suspend payroll taxes, and delay interest payments on student loans.
Trump issued one executive order and three executive memoranda (which fall short of an executive order), after threatening Congress on Friday. Trump told congressional leaders he would take matters into his own hands if they did not come up with a plan to offer continuing relief to struggling Americans as the country deals with the ongoing COVID-19 pandemic.
Trump announced at his Bedminster, New Jersey, country club that he was postponing payroll taxes through the end of the year, extending the federal unemployment benefit at $400 a week (with states picking up part of the cost), waiving student debt interest payments, and helping people “stay in their homes.”
House Speaker Nancy Pelosi, D-California, immediately attacked the president’s actions, saying the measures only underscored the need for an agreement hammered out by congressional leaders.
“The president’s meager, weak and unconstitutional actions further demand that we have an agreement,” Pelosi said on “Fox News Sunday.”
When Fox anchor Chris Wallace suggested she made an error in not giving up more when negotiating with Republicans over a fifth stimulus bill, Pelosi said “clearly you don’t have an understanding of what is happening here.”
Some Republicans who have signaled their resistance to spend more federal money – specifically on unemployment – spoke out this weekend against the measures, and at least one agreed with Pelosi that Trump did not have the constitutional authority to do some of what he had done.
Sen. Ben Sasse, R-Nebraska, called Trump’s measures “unconstitutional slop.”
“The pen-and-phone theory of executive lawmaking is unconstitutional slop,” Sen. Ben Sasse, R-Nebraska, said in a statement issued by email. “President Obama did not have the power to unilaterally rewrite immigration law with DACA, and President Trump does not have the power to unilaterally rewrite the payroll tax law.”
Sen. Lindsey Graham, R-South Carolina, said he “would much prefer a congressional agreement,” though he did appreciate the president’s measures.
What did the president sign and what does it mean for you? Here’s a look at the four measures Trump put forth Saturday.
Unemployment
In March, the Coronavirus Aid, Relief, and Economic Security (CARES) Act established a $600 per week federal unemployment benefit for the millions of people who lost their jobs when the country closed down because of the COVID-19 pandemic.
The money was in addition to state unemployment benefits.
The federal unemployment aid ended on July 31. Democrats and Republicans in Congress have been wrangling to extend the federal benefit, but have not been able to agree on an amount for the federal benefit. Democrats say they want to continue paying the $600 a week, while Republicans want the number to be somewhere between $200 and $400.
Trump on Saturday called for $400 a week in unemployment aid, with $300 coming from the federal government and $100 coming from state governments.
Trump proposes to fund the benefits using $44 billion from the Department of Homeland Security’s Disaster Relief Fund. That money is earmarked for natural disasters such as hurricanes or tornadoes. DHS would still have $25 billion in the relief fund for potential natural disasters through the end of 2020.
The memorandum directs states to use unspent money from the Coronavirus Relief Fund to pay for their share of the unemployment benefit.
The aid would be retroactive to Aug. 1 and last through Dec. 6, or until the money runs out, the memorandum said.
Around 30 million people are now receiving unemployment benefits, and at that rate some estimate the money would last for about five weeks.
White House economic adviser Larry Kudlow said that the administration had not talked with states before the announcement of the play, but intended to do that beginning Monday.
Kudlow told CNN he thinks the first checks could come “in a matter of weeks.”
Payroll tax
The second memorandum is a “payroll tax holiday,” which means that the federal government will not collect the federal withholding tax or the tax that is taken from your paycheck to pay for Social Security and Medicare.
For the vast majority of Americans, every payday 7.65% of the money you earn is subtracted from your paycheck and used to fund Social Security (6.2%) and Medicare (1.45%). Your employer pays the same amount of tax for each employee.
The memorandum will suspend the collection of payroll taxes beginning on Sept. 1 and continuing until Dec. 31 for workers making less than $4,000 for any two-week pay period, or around $2,000 per week.
The suspension of the tax is a tax deferral, not tax forgiveness. That means those taxes must be paid at a later date unless they are forgiven.
Trump called on Congress to make the tax deferral a permanent tax cut. A president cannot issue a permanent tax cut.
Student loans
Trump’s third memorandum calls for waiving interest on student loans through the end of 2020 and allows people to delay payments on the principal of the loan until Dec. 31.
The plan applies only to student loans that are held by the federal government.
Payment on the principal of the loan is due on Dec. 31 and full payments — principal and interest — are set to restart Jan. 1, 2021.
Evictions
The only executive order issued on Saturday concerned evictions.
The CARES Act banned eviction filings until July 25 on properties that are backed by federal mortgage programs or those that receive federal funds. The executive order issued Saturday leaves the decision to ban evictions in the hands of Health and Human Services Secretary Alex Azar and the director of the Centers for Disease Control and Prevention, Robert Redfield.
"The secretary of Health and Human Services and the director of CDC shall consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary to prevent the further spread of COVID-19 from one state or possession into any other state or possession," the order says.
There is no more money for renters spelled out in the order, only a call for Treasury Secretary Steven Mnuchin and Housing and Urban Development Secretary Ben Carson to try to find more federal money to help renters facing eviction.
“The Secretary of the Treasury and the Secretary of Housing and Urban Development shall identify any and all available Federal funds to provide temporary financial assistance to renters and homeowners who, as a result of the financial hardships caused by COVID-19, are struggling to meet their monthly rental or mortgage obligations.”
“The Secretary of Housing and Urban Development shall take action, as appropriate and consistent with applicable law, to promote the ability of renters and homeowners to avoid eviction or foreclosure resulting from financial hardships caused by COVID-19. Such action may include encouraging and providing assistance to public housing authorities, affordable housing owners, landlords, and recipients of Federal grant funds in minimizing evictions and foreclosures.”
What about a second stimulus check?
Trump did not address a second stimulus check in his remarks on Saturday. He, along with Republican and Democratic congressional leaders, has expressed a desire to give most Americans another $1,200 stimulus check.
Will Congress still negotiate for a stimulus package?
Both Democrats and White House negotiators have said they want to continue negotiations for another stimulus package that would be somewhere between the $1 trillion package proposed by Republicans and the more than $3 trillion package passed last spring in the Democratic-led House.
“We are ready to meet the White House and Republicans halfway,” Senate Democratic Minority Whip Dick Durbin, Illinois, said Sunday. “We’ve said that from the start.”