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Thursday, August 13, 2020

What are the 4 new executive orders for COVID relief? Here are the details you should know

The president made good on his threat to intercede in ongoing stimulus package negotiations this weekend, issuing actions to cover four key interests.

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Sarah Tew/CNET

Americans are still working to understand an executive order and three memoranda issued by President Donald Trump over the weekend. This executive action is said to provide economic relief during the current recession caused by the coronavirus. Americans still want to know what it all means — how can these unilateral actions could help (read on), if there could still be a second stimulus check or larger rescue package coming (yes) and if Trump’s actions are even legal (unclear).

“These Executive Orders build upon our ongoing implementation of the CARES Act, which is delivering meaningful results for the American people,” Treasury Secretary Steven Mnuchin said in a statement, Sunday. The executive actions, however, have been sharply criticized by Democratic negotiators.

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“Unfortunately, the President’s executive orders described in one word could be paltry. In three words: unworkable, weak and far too narrow,” Senate Minority Leader Chuck Schumer said on ABC’s This Week, Sunday.

On Fox News Sunday, House Speaker Nancy Pelosi said that if Trump seeks to make a payroll tax cut, it would undermine Social Security and Medicare. 

Here’s everything we know about Trump’s executive actions.

Enhanced unemployment benefits, with a catch

What it is: Following Trump’s memorandum, the federal government would contribute $300 of the $400 payment. Individual states — already pinching pennies amid the coronavirus outbreak — are responsible for the remaining $100 per person per week, retroactively starting Aug. 1. It’s possible state governors could push back on footing 25% of the bill.

How it would be funded: Trump is unilaterally seeking to use leftover or unspent FEMA funds to pay unemployment benefits. 

“I am directing up to $44 billion from the [Disaster Relief Fund],” Trump’s memorandum says. “At least $25 billion of total DRF balances will be set aside to support ongoing disaster response and recovery efforts and potential 2020 major disaster costs. 

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There’s some question about the legality and practicality of some of these orders.


Sarah Tew/CNET

Experts predict this year’s hurricane season will see an “extremely active” series of storms. According to the National Oceanic and Atmospheric Administration hurricanes can cost upwards of $22 billion per storm.

Could there be a legal challenge? This executive action could be challenged legally since the Constitution gives Congress control over federal spending. As such, Trump doesn’t have the legal authority to issue binding executive orders about how money should be spent during the coronavirus pandemic. 

Another objection: The executive orders “don’t give the money to the enhanced benefit, but puts a complicated formula there, which will take a while if at all to accomplish to put money in the pockets of the American people,” Pelosi said Sunday on Fox News.

“The Labor Department working with states believe it could happen much, much faster than that,” White House economic advisor Larry Kudlow said Sunday, adding that people could expect checks in a couple of weeks. 

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Will there be another check in the mail for a one-time stimulus payment or enhanced unemployment? Both are possible.


Angela Lang/CNET

Eviction order: Protections have not been renewed yet

The CARES Act banned late fees and eviction filings until July 25 on properties backed by federal mortgage programs — like Fannie Mae — or those that receive federal funds like HUD. The Republican-authored HEALS Act didn’t address stipulations on evictions, and Trump’s executive order is surprisingly low on detail.

It leaves the decision to ban evictions in the hands of Health and Human Services Secretary Alex Azar and Centers for Disease Control and Prevention Director Robert Redfield, taking no official stance itself. 

“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 White House’s memo regarding evictions said.

In addition, the order doesn’t specify if it will provide financial assistance to renters, leaving that decision to Treasury Secretary Steven Mnuchin and Housing and Urban Development Secretary Ben Carson.

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If your student loan is deferred, it’s possible you’ll have to make up the full amount later.


Sarah Tew/CNET

Student loan payment deferral extends original deadline

The White House’s memorandum on student loan deferral moves to waive student loan interest until Dec. 31, 2020, extending the current relief under the CARES Act that is set to expire Sept. 30 by two months. Payments are scheduled to restart on Jan. 1, 2021.

There’s a catch: Trump’s memo applies to loans “held by the Department of Education,” which doesn’t include privately held student loans, such as through a bank.

The contentious payroll tax cut: How it works

A pet project of Trump’s that he’s been pushing for months, the “payroll tax holiday” seeks to defer your federal tax withholding, which means you’d take home more money per paycheck — temporarily. Since this is a deferral and not tax forgiveness, you would still have to pay those taxes after the deferral period passes — without having to pay additional interest or tax. The memo includes language to explore avenues for eliminating the deferred tax altogether.

The fine print: Trump’s memorandum covers a four-month period from Sept. 1, 2020, through Dec. 31, 2020, for people earning less than $100,000 a year, or less than $4,000 every two weeks (pre-tax).

The memo’s language specifies that Mnuchin, as Treasury secretary, can exercise his authority to “defer the withholding, deposit, and payment of the tax.” According to the US Code cited, Mnuchin could extend this for one year. 

Payroll taxes fund social security and Medicare.

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There are limits to the president’s executive powers, which could be put to the test in the coming days.


Sarah Tew/CNET

Could Trump be sued? Congress is authorized with writing and passing laws regarding financial decisions. The White House can’t forgive taxes without Congressional approval. 

When asked if he was concerned about the legality of an executive action during a press conference Friday, the president said, “No, not at all … well, you always get sued. Everything you do, you get sued.”

How could an executive order differ from legislation?

So far, the executive actions signed by Trump will only cover the four topics above, rather than the large scope of either the Democrats’ or Republicans’ stimulus proposals. Democrats have said that an executive order won’t go far enough. 

Will negotiations over the stimulus package continue?

Stimulus check discussions could ramp again this week, with Democratic leaders repeating their call for bipartisan negotiations to agree on a more comprehensive solution.

“We are ready to meet the White House and Republicans halfway,” Democratic Minority Whip Dick Durbin said Sunday. “We’ve said that from the start.”

Mnuchin didn’t confirm whether talks would restart, but expressed openness to the possibility. “If we can get a fair deal, we’re willing to do it this week,” he told CNBC, Monday.

If talks resume swiftly, the legislation could presumably go to a vote in one chamber as soon as Tuesday or Wednesday. Both chambers must vote before the legislation lands on Trump’s desk for his signature. If a deal is reached in the coming weeks, it’s also possible that the executive action will be null and void. 

For more information, we’ve looked at how soon you might get your second stimulus check and compared the HEALS, CARES and Heroes stimulus proposals.

Lori Grunin contributed to this story.



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