President Donald Trump on Saturday signed a series of executive actions intended to extend and expand COVID-19 relief, including suspending payroll tax collection and boosting federal support for unemployment benefits.
It wasn’t immediately clear the legal authority under which the president was acting in making the orders, which came at a news conference at his country club in Bedminster, New Jersey. The president signed the orders before he was scheduled to fly to Long Island, New York, for high-dollar fundraisers in the Hamptons.
Trump also announced he was signing orders designed to prevent evictions, continue student loan deferrals through at least the end of the year and provide for partially reviving expanded unemployment insurance.
The suspension of payroll taxes may be the most contentious of the orders, which he said would apply through the end of the year for people making up to $100,000 a year. The text indicates the actual sum is $104,000 a year.
The president said he was signing “a directive instructing the Treasury Department to allow employers to defer payment of the employee portion of certain payroll taxes,” from either Aug. 1 or Sept. 1 through the end of 2020. The text circulated said the beginning of September, but the president suggested that would change.
“This will mean bigger paychecks for working families as we race to produce a vaccine,” he said, although it wasn’t immediately clear that employers would actually be required to pass the money on to their employees through decreased withholding.
“If I’m victorious, Nov. 3 I plan to forgive these taxes and make permanent cuts to the payroll tax and to make them more permanent,” the president said, making a plug for his own reelection campaign.
Payroll taxes fund the Social Security Trust Fund, and the delay in collection will set up a potential funding gap if reductions are made permanent.
The president claimed that “everybody” wants the payroll tax reduction, despite there being clear bipartisan opposition in both chambers of Congress.
The executive action to partially revive expanded unemployment benefits is also not without complication. The president signed a memorandum directing the use of funds from FEMA’s Disaster Relief Fund, or DRF, which has an unobligated balance of $79 billion, to provide for an additional $400 per week in unemployment benefits. The disaster aid that could be used would be capped at $44 billion.
But that comes with a catch: States will be required to put up a match for 25 percent of the funding.
“I am hereby directing the Federal Emergency Management Agency (FEMA) to assist in providing benefits from the DRF, and am calling upon the States to use their CRF [Coronavirus Relief Fund] allocation, to bring continued financial relief to Americans who are suffering from unemployment due to the COVID-19 outbreak,” the president’s memo said.
Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee, said in a statement that many states may not be able to afford that match.
“I’ve heard grave concerns from states about this proposal and they are simply going to opt out. Their budgets have been crushed. They cannot afford a 25 percent match, especially when unemployment trust funds are under tremendous strain and Republicans oppose funding for state and local governments,” Wyden said Saturday.
The president’s directive to mitigate evictions took the form of an actual executive order.
“The CARES Act imposed a temporary moratorium on evictions of certain renters subject to certain conditions. That moratorium has now expired, and there is a significant risk that this will set off an abnormally large wave of evictions,” the order said. “With the failure of the Congress to act, my Administration must do all that it can to help vulnerable populations stay in their homes in the midst of this pandemic.”
That order directs the Treasury, the Department of Housing and Urban Development, and the Federal Housing Finance Agency to use authorities to prevent foreclosures and evictions.
Trump previewed his plans during a similar press availability Friday night.
“We’re going to enhance unemployment benefits through the end of the year,” Trump said. “And defer student loan payments and forgive interest until further notice.”
The executive actions come after the breakdown of Friday talks on Capitol Hill between Speaker Nancy Pelosi and Senate Minority Leader Charles E. Schumer and Trump’s emissaries: Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin.
Pelosi and Schumer said after a fruitless Friday meeting that they reiterated their offer from the previous day to meet in the middle on the cost of the package. Democrats started with a $3.4 trillion bill that the House passed in May and Republicans with a $1 trillion proposal released in late July.
“They said they couldn’t go much above their existing $1 trillion,” Schumer said Friday.