HOLIDAY PRESS
President Donald Trump has signed executive orders to extend economic relief after lawmakers were unable to reach an agreement on a new incentive package.
The mandates include extending improved unemployment benefits and the moratorium on federal eviction, imposing a tax evasion holiday and stopping federal student loan payments.
The orders come after the end of July of federal unemployment benefits and a moratorium on federal eviction. Trump first announced his plans to sign executive orders to provide further economic relief during the coronavirus at a news conference Friday night.
Details of the executive orders
Although Republicans and Democrats were able to make some progress over the past week on the components of a new incentive package, they largely disagreed on how much the next round of relief would cost. The White House on Thursday rejected a $ 2 trillion proposal from Democratic leaders.
“[House Speaker] Nancy Pelosi en [Senate Minority Leader] “Chuck Schumer has chosen to keep this vital assistance hostile,” Trump said during a briefing in Bedminster, New Jersey on Saturday afternoon.
Friday’s employment report showed the unemployment rate at 10.2%.
Here are the four economic reliefs that Trump drew this afternoon:
Expand benefits for improved unemployment
Trump’s executive order extends improved unemployment benefits by the end of the year at a rate of $ 400 a week.
States will be responsible for 25% of the cost through existing funding, said Trump, who will reduce the federal government’s obligation to $ 300 per week per recipient.
The CARES Act dramatically expanded unemployment benefits and provided an additional federal payment that enhanced state benefits. That boost, called Federal Pandemic Unemployment Compensation (FPUC), gave unemployed Americans an extra $ 600 a week, on top of their regular benefits for state unemployment. FPUC expired at the end of July.
FPUC expansion became a point of political controversy when lawmakers negotiated the next incentive package.
The HEROES Act, proposed by House Democrats in May and used as its focal point in negotiations, would expand FPUC to $ 600 per week by the end of this year.
GOP members for the most part pushed back on the proposal, arguing that the benefit would be a “disincentive” to work back for those who made more money on unemployment than they did while working. Instead, Republicans pushed for $ 20 for 20 weeks as a 70% replacement of previous salaries with a cap of $ 600.
“I have heard serious concerns from states about this proposal and they will simply reject it,” House Finance Committee Ranking Ron Wyden (D-OR) said in an email Saturday. ‘Their budgets are shattered. They can’t afford a 25% match, especially when unemployment trust funds are under enormous tension and Republicans oppose funding for state and local governments. ”
Pay tax vacation
A holiday for payroll tax begins September 1 and continues until the end of the year. Trump said the holiday could be retroactive until Aug. 1. Employers earning less than $ 100,000 a year are eligible for tax vacation, Trump said. Employers will be allowed to withhold these taxes from the eligible wage payments for employee during this period.
The payday loan reduces the amount taken from workers’ wages to fund Social Security and Medicare, but the benefits of such a holiday as a tax cut can be limited and depend on the income and employment status of a worker.
Saving taxes would require congressional action, but Trump could use his emergency powers to collect taxes – meaning they would theoretically have to be repaid later, unless Congress agrees to do deliberation.
Trump said that if he is re-elected in November, he can forgive the tax cuts delay and enact a permanent payroll tax cut.
Trump, who has long called for a tax cut in the next incentive package, would face opposition from both Democrats and Republicans. Democrats said it would do nothing to help the millions of unemployed Americans, and Republicans described it as “problematic.” The White House eventually dropped its application for the tax cuts, but has now made an over-face.
More than 16 million Americans are currently unemployed, according to the most recent job report, and 1.2 million Americans filed for unemployment last week, marking the 20th straight week that more than one million people have applied for help. A tax vacation will have no effect on those individuals.
Federal Eviction Moratorium
The executive order extends a federal moratorium on eviction that expired last week. Trump did not say how long the moratorium would last, but said it would apply to tenants and homeowners.
The CARES law prevented landlords as housing agencies from filing eviction actions, filing no fees or penalties, or notifying tenants to evict. Those orders apply only to housing with federally subsidized and federal support, and expired on July 24th.
An August report by a group of housing experts estimated that 30 to 40 million Americans could be at risk, saying the U.S. “may be dealing with the worst housing crisis in its history.” Color communities, which are disproportionately hard-hit, would be hardest hit by the eviction crisis. The experts called for “significant, rapid and robust government intervention” to prevent long-term adverse effects of the COVID-19 housing crisis.
Suspension of payment of federal student loan
Trump’s executive order suspends student loan payments by the end of the year and maintains a zero percent interest rate for federal student loans. He said he is likely to extend this suspension in 2021.
The CARES Act previously passed some Sept. 30. Some federal student loan payments, with zero interest, suspended by Perkins Loans and Federal Family Education Loans not owned by the U.S. Department of Education, along with private student loans, were not included in the reward.
Pupils of student loans working on forgiveness of public service under provisions of the CARES Act had the months of satisfaction to forgiveness. Lenders who participated in student loan rehabilitation also had to count down the months to withdraw their loans from the default.
What about stimulus controls?
The CARES law provided Americans with one-time direct economic impact payments, also called incentive payments. These payments were as much as $ 1,200 per individual, as well as $ 2,400 for a couple filing together, and provided extra money for qualifying dependents under 17.
As the pandemic continues and Americans continue with the economic downturn, another round of stimulus checks has been a source of much debate in Washington. Both Democrats and Republicans agreed that the next incentive package should include more direct payments to Americans, but could not agree on how much those payments should be.
Democrats are pushing for $ 1,200 per family member, up to $ 6,000 per household. Republicans proposed another round of incentive payments in their HEALS Act that would follow the same provisions as the CARES Act, but remove the age for qualification dependency.
Trump’s executive orders do not include provisions to provide another round of stimulus checks to Americans. Because negotiations in Washington have reached a standstill, it is not clear if another incentive package will be passed and signed into law in the very near future.
