What do President Donald Trump’s executive order and three memoranda really mean? That’s a question on many minds as Americans grapple to understand how the new executive actions could mean for.
In comparison to the benefits that were being, critics suggest that the newly signed orders fall short. For example, there’s no and they . Additionally, the payroll tax cut could put Social Security and Medicare at risk, as they’re funded through payroll taxes.
On Sunday, Treasury Secretary Steven Mnuchin said that Saturday’s orders are meant to continue the ongoing implementation of the. Senate Minority Leader Chuck Schumer and other Democratic leaders, however, were skeptical about whether the actions could meet their aim.
“President Trump’s recent executive orders are so unserious in terms of meeting the large needs of America as to be pathetic,” he said.
We break down all four of Trump’s executive actions, how they could help, if there are any catches and why some might not pass.
Enhanced unemployment benefits, with a catch
What it is: Following Trump’s memorandum, the federal government would contribute $300 of the(down from the , which ended July 31). Individual states — already pinching pennies amid the coronavirus outbreak — are responsible for the remaining $100 per person per week, retroactively starting Aug. 1.
During a press conference on Monday, Mnuchin said that benefits could arrive for qualifying people “within the next week or two.”
Governors have pushed back on footing 25% of the bill, with New York Governor Andrew Cuomo calling it “laughable.”
California Governor Gavin Newsom also voiced concern of the orders on Monday. Newsom said that massive budget cuts would be needed to implement Trump’s plan. Newsom estimated that matching 25% for unemployment benefits would cost California around $700 million per week.
“It would create a burden the likes which even a state as large as California could never absorb without, again, massive cuts to important services,” Newsom said during a press conference.
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 upward 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 order and memoranda “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.
Eviction order: Protections have not been renewed yet
While the language of the executive order begins on the trajectory of a proper moratorium on evictions, it misses the mark if you read on. 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 comparison, thebanned 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.
In addition, the order doesn’t specify if it will provide financial assistance to renters, leaving that decision to Mnuchin and Housing and Urban Development Secretary Ben Carson.
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, 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, though 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 through Dec. 31, for people earning less than $100,000 a year, or less than $4,000 every two weeks (pretax).
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 could an executive order differ from legislation?
So far, the executive actions signed by Trump will cover only the four topics above, rather than the large scope of either the. Democrats have said that an executive order won’t go far enough.
On Monday, Schumer pointed out specifics that the orders lacked. While there could be action taken on this in the future, to date, Trump’s newly signed policies fail to address:
- Testing, tracing and treatment of COVID-19.
- Money needed to safely reopen schools and provide PPE (personal protective equipment)
- Food assistance
- Aid for local and state governments
- Money ensuring that elections can be safely carried out
- Money to keep post offices open for elections
Will negotiations over the stimulus package continue?
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 do resume shortly, stimulus legislation could presumably go to a vote in one chamber later this month. 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.
If you’re looking 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.