President Donald Trump bypassed lawmakers by claiming the authority to defer payroll taxes and replace an expired unemployment benefit after negotiations with Congress on a new coronavirus rescue package collapsed.
Trump’s measures on Saturday bypassed Congress’s control over federal spending and are likely to face legal challenges. The president called his actions necessary as lawmakers have been unable to reach an agreement to give more money to the faltering economy, which has put his re-election in jeopardy in November.
Here we explain each of the actions signed on Saturday and how they can affect you:
For unemployed: the checks continue but for a smaller amount
One of the measures expands the supplemental federal unemployment benefit for millions of Americans out of work during the outbreak.
However, the order requires payments of up to $ 400 each week, one-third less than the $ 600 people had been receiving. It is unknown how many people would receive the benefit and how long it would take for them to arrive.
The previous unemployment benefit, which expired on August 1, was funded entirely by Washington, but Trump is asking states to cover 25% now.
Treasury Secretary Steven Mnuchin warned once again that the amount of unemployment benefit will be much less than it is today.
He’s looking to set aside $ 44 billion in disaster aid that had previously been approved for states, but said it will be up to states to determine how much, if anything, to fund, so the benefits could be even less.
Many states have already faced budget deficits due to the coronavirus pandemic and would have a difficult time assuming the new obligation.
For employees: you won’t pay payroll taxes … for now
In another measure, Trump authorizes the Treasury Department to allow employers to delay paying employees’ Social Security payroll taxes until the end of 2020 for those Americans who earn less than $ 100,000 annually.
The text of the order stipulates that the period would begin on September 1, but during the press conference the president indicated that it could be retroactive until August 1.
The measure would not directly help unemployed workers, who do not pay the tax when unemployed, and employees would have to repay the federal government eventually without an act of Congress.
Some residents report that the $ 400 a week that was promised will not be enough for rent and priority payments.
In essence, the deferral is an interest-free loan that should be repaid. Trump said he will try to get lawmakers to extend it, and the timing would line up with a post-election session in which Congress will try to pass government funding bills.
“If I win, I can extend and rescind,” Trump said, repeating a long-time goal but keeping mum on how he would fund Medicare and Social Security benefits that cover the 7% tax on employee income. Employers also pay 7.65% of their payroll into funds.
Trump’s Democratic opponent in the presidential race, Joe Biden, called the orders “a series of half-measures” and accused him of jeopardizing Social Security, which is financed by payroll tax.
Randy Serrano has the information.
Eviction of homes
At his conference, Trump announced that home evictions were to be stopped.
But in the text, accessed by NBC News, the executive order does not reinstate the moratorium on evictions and instead urges the Secretary of the Treasury and the CDC to “consider” whether measures to stop them are “reasonably necessary to avoid a greater spread of COVID-19 “.
It also directs various agencies to “identify” to search for available funds to provide financial assistance to those unable to pay the monthly rent.
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The fourth measure establishes an extension in the deferrals of student loan payments and the order to waive interest, which will expire on September 30.
Although Trump indicated that the measure of interest will be until “immediately after December 1”, the text indicates that it is “until December 31”.
What was missing?
The announced measures are intended to largely replace the proposals debated by Congressmen and Democrats, but there was one expected aspect that was not included: another possible $ 1,200 stimulus check.
If you haven’t received your payment or if you have lost or thrown the check, these are the options you have.
Why would they face legal challenges
Trump had already suggested in recent days that he could use his executive power for these orders, although the legal basis on which he acts is questioned by Democrats, who have threatened to bring their decisions to justice if Congress is sidelined, which is in charge of determining federal spending.
In this regard, Trump said, “Whatever you do, you are sued, so we’ll see. Yes, they will probably sue us, but people feel we can do it.”
The use of executive actions drew criticism from Republican Senator Ben Sasse of Nebraska. “The pencil and phone theory of executive legislation is an unconstitutional waste,” said Sasse, a member of the Senate’s judicial and financial panels.
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He added that Trump “does not have the power to unilaterally rewrite the payroll tax law. Under the Constitution, that power belongs to the American people acting through its members of Congress. “
The Democratic chairman of the House Ways and Means Committee on tax writing, Rep. Richard E. Neal of Massachusetts, accused Trump of “blatantly circumventing Congress to institute a tax policy that destabilizes Social Security.” He also cited a threat to funding from Medicare.