On August 8, 2020, President Donald Trump signed one Executive Order and three memoranda that seek to address hardships related to the economic fallout of the COVID-19 pandemic. These actions were advanced in the absence of Congressional agreement for a fourth COVID-19 federal stimulus package. Experts indicate that the President’s executive actions are likely to face legal challenges.
- Executive Order on Fighting the Spread of COVID-19 by Providing Assistance to Renters and Homeowners
- The Executive Order directs federal agencies to examine a series of activities designed to prevent evictions.
- The Executive Order specifically provides that:
(1) the Secretary of Health and Human Services and the Director of Center for Disease Control shall consider whether any measures temporarily halting residential evictions are reasonably necessary to prevent the further spread of COVID-19;
(2) the Secretary of the Treasury and the Secretary of Housing and Urban Development (HUD) shall identify federal funds to provide temporary financial assistance to struggling renters and homeowners;
(3) the Secretary of HUD shall take action to promote the ability of renters and homeowners to avoid eviction or foreclosure resulting from financial hardships caused by COVID-19, which includes encouraging and providing assistance to public housing authorities, affordable housing owners, landlords, and recipients of federal grant funds in minimizing evictions and foreclosures; and
(4) the Director of Federal Housing Finance Agency shall review all existing authorities and resources that may be used to prevent evictions and foreclosures for renters and homeowners. There are no timelines for these actions.
Previously through the CARES Act, Congress provided a 120-day eviction moratorium for renters who participate in federal housing assistance programs or live in a property with a federally backed mortgage. This moratorium expired on July 24.
- This Memorandum provides deferments to borrowers to continue the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020, or until, “such time that the economy has stabilized, schools have re-opened, and the crisis brought on by the COVID-19 pandemic has subsided.”
- This Memorandum provides employers the option to defer the withholding, deposit, and payment of the payroll taxes on wages or compensation paid during the period of September 1, 2020 through December 31, 2020.
- The deferral eligibility is for employees whose compensation during any bi-weekly pay period is less than $4,000 pre-tax (about $100,000 pre-tax annually).
- The Memorandum does not eliminate the need for the taxpayer to pay the deferred taxes. The President indicated that he would sign legislation eliminating the deferred taxes, but this action necessitates Congressional support, which is uncertain considering such action would lower funding for Social Security and Medicare.
- Additionally, the Memorandum directs the Secretary of the Treasury to explore avenues to eliminate the obligation to pay the taxes deferred pursuant to this Memorandum.
- Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster Declarations Related to Coronavirus Disease 2019
- This Memorandum authorizes supplemental unemployment benefits through the Department of Homeland Security’s (DHS) Disaster Relief Fund (DRF).
- The Memorandum also “calls upon the States to use their CRF (Coronavirus Relief Fund authorized by the U.S. Congress) allocation, to bring continued financial relief to Americans who are suffering from unemployment due to the COVID-19 outbreak.”
- The Memorandum directs up to $44 billion from the DRF at a 75 percent federal cost share to be made available for lost wages assistance to eligible claimants. This means that states are required to supplement federal expenditures at 25 percent through existing funds or remaining funds allocated by Congress through CARES Act assistance for unemployment insurance programs.
- The Memorandum specifically authorizes lost wages assistance of up to $400 payment per week (as an example, in the case of $400 a week of benefits, the federal government contribution would be $300 and states must provide the remaining $100). The unemployment benefit provided by Congress, which expired July 31, 2020, authorized up to $600 per week and there was no required state contribution.
- Federal assistance in this Memorandum would expire no later than December 27, 2020.
- To be eligible, a governor must make a request for a grant, a state must agree to the cost-sharing requirement, and the state must administer delivery of financial assistance. States would be required to set up additional administrative capacities to carry out payments for unemployment benefits.
- Eligible claimants are required to receive at least $100 per week of any of the following benefits:
(1) unemployment compensation, including Unemployment Compensation for Federal Employees (UCFE) and Unemployment Compensation for Ex‑Service members (UCX);
(2) Pandemic Emergency Unemployment Compensation (PEUC);
(3) Pandemic Unemployment Assistance (PUA), under section 2102 of the CARES Act;
(4) Extended Benefits (EB);
(5) Short-Time Compensation (STC);
(6) Trade Readjustment Allowance (TRA); and
(7) Payments under the Self-Employment Assistant (SEA) program.
- Benefits are available until the balance of the DRF reaches $25 billion or for weeks of unemployment ending not later than December 6, 2020, whichever occurs first.
- Update: Under U.S. Department of Labor guidance, states may count existing unemployment payments toward their $100 match of unemployment benefits. This would, however, limit the federal unemployment assistance to $300 per week instead of $400.