UPDATE: Frustrated by the lack of progress on Capitol Hill, President Trump took matters into his own hands, delivering a number of executive actions on Saturday. The four issues targeted in his memorandums are extended unemployment benefits, payroll tax deferral, eviction protection, and student loan relief. However, payments and benefits from these actions may not be readily available.Read More »
Trump’s new UE benefit action grants an additional benefit of $400. However, this action requires states to pay $100 of the $400 additional benefit that each person could receive weekly. A state has to agree with this stipulation for any eligible person to get any of the additional benefits. Additionally, the state will have to set up an entirely new system to hand out the extra benefits and building the new system could take months to complete. Also, individuals can only access the $300 federal benefit if they are qualified for the $100 state aid payment, which experts say will make a large number of people ineligible.
The payroll tax measure defers the due date for Social Security and Medicare taxes paid by employees through the end of the year. It only applies to workers who make less than around $100,000 a year. This action is similar to the deferral earlier in the year of the federal income tax due date from April to July. Payroll taxes will still be due, they will just be due at the end of the deferment period.
The new memorandum on evictions does not extend the previous action which lapsed in July. The original ban covered mortgages which were backed by federal funds. The new measure is vague, stating only that the Secretary of Health and Human Services and the Director of the CDC will evaluate if any measures momentarily stopping residential evictions for failure to pay rent are reasonably necessary to prevent the continued spread of the coronavirus.
Earlier this year, President Trump waived student loan interest by executive order and borrowers were able to request a deferment on their payments. Congress enacted that policy into law and automatically suspended monthly payments. Currently, loan payments and interest on federal student loans are on hold until the end of September. The new memorandum issued on Saturday instructs the Education Department to extend the original CARES Act student loan relief through the rest of 2020.
The debate on a second stimulus package and extended unemployment benefits was still underway on Thursday, August 6, 2020. A three hour evening meeting between Republican and Democratic leaders offered no progress as both sides appeared to accept the likelihood that Congress would not reach an agreement. The talks in Washington over coronavirus relief funds are in danger of falling flat after the meeting failed to provide any compromise between Democrats and Republicans, diminishing the possibility that necessary relief would be provided, even as the pandemic shows no signs of slowing. It is not clear whether the two sides will meet at anytime today, August 7. At the present time, no meeting has been scheduled to attempt a negotiation before the end of their informal deadline, which is tonight.
White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin planned to brief Trump Thursday night and Friday morning, and will decide whether to proceed in negotiations with Democrats. Treasury Secretary Steven Mnuchin said, “There’s a handful of very big issues that we are still very far apart” on. He mentioned that both sides cannot agree on aid to states and local governments, and renewing supplemental unemployment benefits. Administration officials warned that President Donald Trump would take executive action if no deal is reached by the end of day on Friday.
Trump Tweets about Executive Order to Extend Unemployment Benefits
White House officials are not the only ones speaking of executive action. President Donald Trump has tweeted a confirmation that he is, in fact, considering an executive action to extend unemployment benefits, protections against evictions, and a temporary suspension of payroll tax collection. Whether President Trump can do so is unknown- the president may not actually have the authority to issue such an order. It is readily apparent, however, that the Trump administration is using the threat of executive action as a way to pressure Democrats into making concessions as coronavirus relief negotiations continue.
The CARES Act Expired: What Now?
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law on March 27th, 2020. This act provided a lump sum payment to many citizens, as well as allowed unemployed workers to draw an additional $600 payment each week. This weekly payment was additional to the typical state aid payments. The payments benefited millions of Americans struggling with loss of work during the Covid-19 pandemic.These benefits have been necessary for the average American family and are more critical now. Millions of parents are currently making the difficult choice about sending children to schools and risking infection, negative health outcomes, and possibly death, or attempting virtual learning and likely remaining out of the workforce.
The extra coronavirus benefits officially expired at the end of July and anyone receiving extra money for virus relief will no longer have the support of these additional benefits. If a new economic relief package passes it seems unlikely that relief benefits will remain at $600, but more likely between $200- $500. Unfortunately, a timeline has not been established for reaching a deal that includes additional unemployment benefits. However, administration officials are hopeful there will be a “solution in the very near term.” If Congress fails to act, ending the program will be a financial burden to individuals and households, and a shock to the economy.
Extended Benefits Still Being Negotiated
At this time, Republicans and Democrats are still engaged in negotiations over a potential coronavirus relief package, including the extension of unemployment benefits and an additional stimulus check for qualifying Americans. Senate Minority Leader Chuck Schumer told reporters, “We are still far away on a lot of the important issues, but we are continuing to go at it.” Unemployment benefits are a large part of the issue, as the $600 a week in additional pandemic relief benefits expired last week. Democrats are fighting for an extension through the end of January, but the administration has refused that amount, stalling negotiations.
Senate Republicans introduced a bill that reduces the benefit to $200 per week. Stimulus check amounts would most likely be similar to the first round of payments that went out, as both parties seem to agree on an amount of $1,200 for qualifying citizens. The administration and Democrats have not yet agreed on what amount should be issued for each dependent. If benefits are extended via executive action, it is unknown what amount would be approved. The talks surrounding the new relief package have included more than just unemployment benefits and stimulus checks. Democrats also want money for state and local government budgets and Republicans want protections for businesses amid the Covid-19 pandemic. However, the time to come to an agreement is growing short, as the Senate is scheduled to officially start its August recess on August 10.
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