President Trump Signs COVID related Executive Orders Over Weekend

August 11, 2020 | Category: BPE Newsletter, COVID-19

President Trump Signs COVID related Executive Orders Over Weekend

By: D. Keith Dunnagan, Esq.

August 11, 2020

Over the last several weeks as COVID related lockdowns were instituted again, one of the key issues that dominated the concerns of Californians and Americans alike was unemployment benefits. As part of the CARES Act passed by Congress in March 2020, the federal government provided an additional $600 per week of unemployment benefits. However, this assistance expired on July 31, 2020.

For the last several weeks, Congress has been at an impasse over the extension. Most members of Congress agree that assistance is necessary but the partisanship in both houses of the Congress has stalled negotiations such that the parties could not reach a compromise. In George Washington’s farewell address he warned of the problem of partisan politics. He stated:

Without looking forward to an extremity of this kind…, the common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of wise people to discourage and restrain it. 

Washington understood that partisan politics were dangerous because it places loyalty to a party above solving the problems of the Nation. Certainly, party politics has a purpose as a useful check on the political power wielded by individuals and Washington recognized that. The problem was when party politics created such dessension that government could not operate. As a result of the inability for Congress to come to an agreement, President Trump took action and issued executive orders over the weekend addressing unemployment, eviction, payroll taxes and student loan interest.

Under the Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster Declarations Related to Coronavirus Disease 2019, President Trump modified and extended unemployment benefits. The President allocated $44 billion from the Disaster Relief Fund to be used to provide extended federal unemployment benefits of an extra $400 per week. The extended benefit would be comprised of $300 per week of unemployment benefits provided by the Federal government and the States would provide an additional $100 per week of unemployment benefits.

Under the CARES Act passed in March 2020, $150 billion dollars was allocated to the States as part of the Coronavirus Relief Fund (“CRF”). To pay for this extension the President is calling upon the States to use a portion of the CRF to pay for the State share of the extended benefits and the President is allocating a portion of the Homeland Security Disaster Relief Fund (“DRF”) to pay for the Federal portion. This temporary relief which is capped at $44 billion dollars should provide much needed short-term relief for the recipients. Under the executive order this funding will remain available until the week of December 6, 2020 or until the allocated funds are exhausted, whichever comes first.

Under the Memorandum Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19, the President directs the Secretary of the Treasury to exercise its authority to defer collection of employee side payroll taxes without penalties. This deferral is for employees that make less than $100,000 per year. However, the biggest concern is that it is a deferral only and does not guarantee forgiveness of the unpaid taxes.

Many employers will likely not take advantage of this order because there are potential business implications in that if the forgiveness is not enacted by Congress, then employers may ultimately be on the hook for the taxes if employees don’t pay their payroll taxes. Rather, if the forgiveness is enacted then employees may be able to seek a refund of the taxes. Don’t expect to see any change in paychecks as a result of this memorandum. Without legislative actions, businesses will be reluctant to make any changes.

Further, under the Memorandum regarding Continued Student Loan Payment Relief the President directed the Secretary of Education to take necessary steps to provide deferrals of student loan payments and waive interest on student loans through December 31, 2020. This does not prevent people who may want to continue paying on their loans. But does provide some temporary relief.

If you have private student loans you should communicate with your lender to see what relief they are providing as this directive may not address a situation involving private student loans.

Finally, the President also issued the Executive Order on Fighting the Spread of COVID-19 by Providing Assistance to Renters and Homeowners. This order does not necessarily halt any foreclosures or evictions. What this does is instruct the Secretary of the Treasury and the HUD Secretary to review what funds may be available to allocate to homeowners and renters facing financial difficulty in the midst of the COVID-19 pandemic. The order also directs the Director of FHFA and the Secretary of Treasury to review all existing authorities and resources to determine what other mechanisms may be available to assist homeowners and renters in avoiding foreclosure and evictions.

While these actions do not solve the COVID problems they are a starting place for discussions on whether and what the next relief actions may look like. As Washington warned over 200 years ago, partisan politicking must be discouraged. We, as the electorate, need to hold partisan politicians accountable. Their partisan bickering affects real people, with real problems, in the midst of a real crisis. We deserve better.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.

 

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