On Saturday, President Donald Trump signed an executive order and issued three memoranda said to provide economic relief during the current recession caused by the coronavirus. On Sunday, Americans are grappling with what it all means — how can they help (read on), could there still be a second stimulus check or larger rescue package coming (yes) and are Trump’s actions even legal (uncertain)?
“The Lord and Founding Fathers created executive orders because of partisan bickering and divided government,” Peter Navarro, director of Trade and Manufacturing Policy to the Trump Administration, said during an interview Sunday on NBC’s Meet The Press.
The executive actions, however, have already been sharply criticized by Democratic negotiators.
“What the president did is unconstitutional slop,” House Speaker Nancy Pelosi said on Fox News Sunday. Pelosi said that Trump seeking to make a payroll tax cut would undermine Social Security and Medicare.
Here’s everything we know about Trump’s executive actions.
Enhanced unemployment benefits
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 this.
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.
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.
Evictions: There’s no renewed protection 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.
Student loan payment deferral
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
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.
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 would 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.
Are negotiations over the stimulus package dead?
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.”
If talks resume, 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.