Trump’s stimulus order would include payroll tax deferral, eviction moratorium

Trump signs executive orders enacting $400 unemployment benefit, payroll tax cut after coronavirus stimulus talks stall

Trump’s stimulus order would include payroll tax deferral, eviction moratorium

President Trump signed four executive orders for COVID-19 relief but American's may not see benefits without congressional approval. USA TODAY

WASHINGTON – With stimulus talks with Congress at an impasse, President Donald Trump signed a series of executive orders on Saturdayto provide temporary relief to Americans who are suffering from the economic impact of the coronavirus pandemic.

At a news conference from his golf resort in Bedminster, N.J.

, Trump signed four orders that will provide an additional $400 per week in unemployment benefits, suspend payments on some student loans through the end of the year, protect renters from being evicted from their homes, and instruct employers to defer certain payroll taxes through the end of the year for Americans who earn less than $100,000 annually.

Trump said he decided to act on his own and order the benefits after two weeks of negotiations with congressional Democrats collapsed without an agreement on a new coronavirus relief package. 

“We’ve had it,” he said. “We’re going to save American jobs and provide relief to the American worker.”

But questions remain as to whether Trump has the legal authority to take these actions – or the money to pay for them.

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President Donald Trump (Photo: Evan Vucci, AP)

Congress and the White House had struggled to reconcile Democrats' $3.4 trillion coronavirus-relief plan and Senate Republicans' far smaller $1.1 trillion proposal.

House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., met for more than two hours Friday with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows in a last-ditch attempt to salvage discussions. But the talks appeared fruitless, with both sides admitting they were at a standstill with no real pathway forward. 

Afterward, Mnuchin announced that he and Meadows would recommend that Trump move forward with the executive orders, even though Democrats said the president lacks the legal authority to take unilateral action and that he doesn’t have enough money in the federal budget to accomplish his goals.

Trump had been threatening for days to provide relief through an executive order if negotiations failed to produce a deal.

Senate Minority Leader Chuck Schumer, D-N.Y., and House Speaker Nancy Pelosi, D-Calif., have been meeting at the Capitol with White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin. (Photo: Manuel Balce Ceneta, AP)

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Lawmakers had interpreted Trump's threat as a way to pressure negotiators into making a deal. Even some Republicans said they believed Trump was bluffing.

“I doubt if he’s serious,” Sen. Chuck Grassley, R-Iowa, told reporters on Thursday.

He was.

Here's a closer look at what Trump's orders would do: 

Congress approved an additional weekly unemployment benefit in the spring as the coronavirus took hold. It provided an extra $600 per week to Americans filing unemployment on top of what they received in state benefits.

But that benefit expired July 31, leaving many out-of-work Americans in a state of financial limbo. Trump's order would allow states to provide up to $400-per-week in expanded benefits, 75% of which would come from the federal government's disaster relief fund. States would have to pay the reaming 25% of the cost.

Democrats wanted to extend the full $600 benefit, but Republicans balked, arguing it was a disincentive for some Americans to return to work because they would receive more in unemployment than they earned on the job. Republicans wanted to bring the benefit down to $200. Trump's decision to order $400 in benefits splits the difference.

States may pay for their portion of the benefits by using money provided to them under a coronavirus-relief package passed earlier this year, the executive order says.

Talks fall apart: Mnuchin said he'll ask Trump make executive orders after stimulus talks fall apart


A federal moratorium on evictions expired July 24, putting at risk the tenants of more than 12 million rental units nationwide if they miss payments. 

Trump's order instructs the Department of Housing and Urban Development (HUD), the Department of Health and Human Services and the Centers for Disease Control and Prevention to enable renters and homeowners to stay in their homes. HUD also will provide financial assistance to struggling renters and homeowners, Trump said.

Congress also suspended payments on some student loans due to the virus. The provision is set to expire at the end of September. Trump's orders will extend the deferments through the end of the year.

Payroll tax cut

For months, the president has pushed for a payroll tax cut but has been met with blunt opposition from Republicans and Democrats in both chambers of Congress. Trump's order instructs the Treasury Department to allow employers to defer payment of certain payroll taxes from Sept. 1 to the end of the year for Americans earning less than $100,000 per year.

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Trump said he would make the payroll tax cut permanent if he's re-elected in November, prompting alarms from some critics who noted that the tax currently funds Social Security and Medicare and that deferring it could worsen those programs' budgetary woes.

“Donald Trump once promised that he would be ‘the only Republican that doesn’t want to cut Social Security,’” said Nancy Altman, president of Social Security Works. “We now know that what he meant is that cutting Social Security doesn’t go far enough for him: He wants to destroy Social Security.”

Trump's orders don't address several other popular coronavirus-relief provisions that Congress passed earlier, including $1,200 stimulus checks and the Paycheck Protection Program, which provided loans that helped keep more than 5 million small businesses afloat during the pandemic. That program expired Saturday.

Democratic congressional leaders – House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y. – called the president’s plans “meager” and urged the White House to return to the negotiating table.

“Meet us halfway and work together to deliver immediate relief to the American people,” they said in a joint statement. “Lives are being lost, and time is of the essence.”

Democratic presidential candidate Joe Biden, noting that Trump signed the “half-baked” orders at his golf club in New Jersey, said they short-change the unemployed and trigger a “new, reckless war on Social Security.”

“These orders are not real solutions,” Biden said. “They are just another cynical ploy designed to deflect responsibility. Some measures do far more harm than good.”

Several Republicans showed their support for the $400-per-week in enhanced unemployment benefits, including Grassley, Sen. Lindsey Graham of South Carolina and HUD Secretary Ben Carson.

“Great decision by President @realDonaldTrump,” Graham wrote on . “I appreciate the President taking this decisive action but would much prefer a congressional agreement. I believe President Trump would prefer the same.”

Grassley blamed Democrats for stalling the relief, saying their “all or nothing strategy jeopardizes the certainty Americans need to pay their bills.”

Sen. Lamar Alexander, R-Tenn., said Trump “is doing all he can to help workers, students and renters, but Congress is the one who should be acting.”

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Political opponents questioned whether Trump's orders are legal and whether they would be effective in any case.

“It's nowhere close to enough to fix the problem,” Democratic strategist Eddie Vale said.

Josh Schwerin of Priorities USA Action, a political action committee that supports Democratic candidates, described Trump's actions as little more than a political stunt.

“The idea that this is Trump leading is total hogwash,” Schwerin said. “House Democrats passed a relief bill two months ago and Trump has chosen to force the country deeper into a recession rather than take action. Trump has failed on the coronavirus, and he has failed on the economy.”

Laurence H. Tribe, professor emeritus at Harvard Law School, called Trump's actions “cynical” as well as unconstitutional.

“Trump might as well have directed the distribution of $100,000 to every family earning under $1 million a year,” he said. “He obviously has no legal power to do that. But daring anyone to take him to court might be good politics.”

Chris Lu, who served as deputy labor secretary during the Obama administration, said “Trump's unilateral actions to raid Social Security and cut unemployment benefits aren't just terrible policy, but they also run roughshod over the Constitution.”

Want to talk more about politics?: Join our group: ‘Across the Aisle, Across the Nation.’

Contributing: Christal Hayes, Nicholas Wu, Ledyard King, John Fritze, Jason Lalljee

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Trump’s Payroll Tax Deferral Raises Red Flags on Social Security

Trump’s stimulus order would include payroll tax deferral, eviction moratorium

President Donald Trump announced four executive actions on Saturday, including a temporary payroll tax deferral for some workers and continued expanded unemployment benefits, as the coronavirus pandemic continues to hobble the U.S. economy.

The moves were criticized by Democrats and some Republicans as, variously, proving little real help, an unconstitutional power grab from Congress, and a backhanded way to defund Social Security and Medicare, critical programs for millions of American retirees.

“Unilaterally eliminating the payroll tax and ignoring Congress’s power of the purse on funding unemployment insurance will do nothing to help Americans recover,” Representative Maxine Waters, chair of the House Financial Services Committee, said in a statement.

Trump’s actions could imperil negotiations with congressional Democrats over an additional coronavirus relief package, with the two sides trillions of dollars apart on key issues. The president, though, said he’d continue to negotiate with Democrats.

The “meager” policy announcements were “unworkable, weak and narrow,” and by pushing off payroll taxes for some, “endanger seniors’ Social Security and Medicare,” House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer said in a joint statement.

Tax Deferrals

Trump said his action authorizes the U.S. Treasury to allow companies to defer — not suspend — payroll taxes for Americans making less than $100,000 a year from Sept. 1 through Dec. 31. He said if he’s re-elected in November, he may extend the deferral and terminate the tax for some workers.

”This fake tax cut would also be a big shock to workers who thought they were getting a tax cut when it was only a delay,” Senator Ron Wyden, the ranking Democrat on the Senate Finance Committee, said in a statement. “These workers would be hit with much bigger payments down the road.”

Representative Richard Neal of Massachusetts, chairman of the House Ways and Means Committee, said Trump was focused on undermining retired Americans’ financial security.

“This decree is a poorly disguised first step in an effort to fully dismantle these vital programs by executive fiat,” Neal said in a statement.

The president said another move would provide $400 a week in jobless benefits — down from $600 weekly that had been provided through last week, authorized by a Congressional stimulus bill in March — and that states would be responsible for covering 25% of that cost.

The administration is directing states to use part of the $150 billion Coronavirus Relief Fund, while the federal government will tap on $44 billion of the existing $70 billion Disaster Relief Fund, said Andrew Husby, an economist for Bloomberg Economics.

“Because the Trump plan taps a limited pool of existing funds to extend unemployment benefits at $400 per week, there is a high risk they run short ahead of the election,” Husby said.

Neal said the plan was cumbersome: “What the President outlines is ly legally and logistically impossible to execute in nearly every state, not to mention that the proposed funding falls far short of what would be required.’

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To act on his own, the president is relying on an expansive and controversial reading of executive power that ly will face legal challenges. Trump’s advisers say executive action could pressure Democrats to reduce their demands and allow him to argue to voters that he’s looking out for their well-being amid congressional inaction.

Republican Senator Ben Sasse of Nebraska said of Trump’s actions, “the pen-and-phone theory of executive lawmaking is unconstitutional slop,” adding that the president “does not have the power to unilaterally rewrite the payroll tax law.”

Even Senator Lindsey Graham, a close Trump ally, said in a tweet that he “would much prefer a congressional agreement.”

Alienating Democrats

But the gambit risks alienating Democratic lawmakers and decreasing the odds for a deal that both sides say is necessary to help the economy recover from a pandemic that’s decimated industries and left nearly 160,000 Americans dead so far.

“Unable to deliver for the American people in a time of crisis, Donald Trump offered a series of half-baked measures today,” Democratic nominee Joe Biden said in a statement. “He is laying out his roadmap to cutting Social Security.”

Democrats criticized the president when he threatened the move during negotiations, saying the administration would be better off returning to the bargaining table. White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin had been meeting throughout the week with Schumer and Pelosi to try to craft a deal, without success.

Of the $3.7 trillion Congress has authorized for the coronavirus response, there is still $1.5 trillion yet to be spent or committed, according to an analysis from the Committee for a Responsible Federal Budget. The White House, though, has limited authority to redirect the unused money without Congress’s approval.

Because the president can’t cut taxes on his own, Trump is simply delaying the due date for the payroll tax, which is paid jointly by employers and employees. The administration hopes employers will stop withholding the money from Americans’ paychecks, with voters in turn pressuring Congress to eventually pass legislation forgiving the accumulated amount.

Struggling U.S. Economy Gets Limited Lifeline From Trump Actions

Employer Uncertainty

But employers may decide simply to do nothing in the face of uncertainty, fearing that if Congress fails to act, they could be stuck trying to claw back money from their employees to settle their obligations to the Internal Revenue Service.

The president’s effort to unilaterally extend additional unemployment benefits to Americans after a $600 enhanced weekly benefit expired at the end of July may also face logistical challenges.

Renewing the payments has been a key sticking point in negotiations on Capitol Hill. Democrats favored extending the $600 weekly amount through January or beyond, while Republicans sought a reduction, saying that the benefit was so generous that Americans were choosing not to return to work.

“The temporary $400-a-week supplement on top of the traditional state benefits will help the unemployed, no doubt, but it means that more than half of the jobless will earn more unemployed than at work,” Representative Kevin Brady of Texas, the top House Ways and Means Committee Republican, said in a statement. “This maintains a serious barrier to reconnecting workers to their jobs.”

The administration says that about $81 billion has yet to be spent and could be provided to unemployed Americans, though some states have already committed their funds for health care, distance learning and housing assistance. And even if states do use the money for an expanded unemployment benefit, it’s unly to match the previous $600.

Eviction Moratorium

Some 10.2% of Americans are unemployed, a government report showed Friday. That’s just above the peak following the 2008 financial crisis, but a marked decline from almost 15% at the height of the pandemic.

The president’s eviction moratorium expands the congressionally approved version that expired in July.

Trump directed the Department of Housing and Urban Development to extend protection for renters in federally backed housing, mirroring the previous stimulus legislation that shielded around a third of the nation’s renters. Those who live in buildings with federally backed mortgages or loans would be shielded from eviction proceedings.

Around one in five American renters — between 19 million and 23 million people — are at risk of eviction by the end of September, according to an analysis by the Aspen Institute.

(Updates with Waters, Sasse, Neal from third paragraph.)

–With assistance from Laura Davison, Erik Wasson and Billy House.

To contact the reporter on this story:
Justin Sink in Washington at

To contact the editors responsible for this story:
Alex Wayne at

Joshua Gallu, Ros Krasny

© 2020 Bloomberg L.P. All rights reserved. Used with permission.


Trump Signs Executive Orders To Extend COVID-19 Economic Relief, Includes Unemployment Benefits, Eviction Moratorium

Trump’s stimulus order would include payroll tax deferral, eviction moratorium


President Donald Trump has signed executive orders to extend economic relief after lawmakers were unable to reach an agreement on a new stimulus package.

The orders include extending enhanced unemployment benefits and the federal eviction moratorium, imposing a payroll tax holiday and further suspending federal student loan payments.

The orders come after the late-July expiration of federal unemployment benefits and a federal eviction moratorium. Trump first announced his plans to sign executive orders to provide further economic relief during the coronavirus at a Friday night press conference.

Details on the Executive Orders

Though Republicans and Democrats were able to make some progress in the past week regarding the components of a new stimulus package, they largely disagreed how much the next round of relief should cost. The White House rejected a $2 trillion proposal from Democratic leaders on Thursday.

“[House Speaker] Nancy Pelosi and [Senate Minority Leader] Chuck Schumer have chosen to hold this vital assistance hostage,” Trump said during a briefing in Bedminster, New Jersey on Saturday afternoon.

Friday’s jobs report showed the unemployment rate at 10.2%.

Here are the four economic relief actions Trump signed this afternoon:

Extending Enhanced Unemployment Benefits

Trump’s executive order extends enhanced unemployment benefits through the end of the year at a rate of $400 per week.

States will be responsible for 25% of the cost via existing funding, Trump said, which will reduce the federal government’s obligation to $300 per week per recipient.

The CARES Act expanded unemployment benefits dramatically and provided an additional federal payment boosting state benefits. That boost, called Federal Pandemic Unemployment Compensation (FPUC), gave unemployed Americans an additional $600 per week, on top of their regular state unemployment benefits. FPUC expired at the end of July.

Expanding FPUC became a point of political contention as lawmakers negotiated the next stimulus package. 

The HEROES Act, proposed by House Democrats in May and used as their focal point during negotiations, would extend FPUC at $600 per week through the end of this year. 

GOP members largely pushed back on the proposal, arguing that the benefit would be a “disincentive” to return to work for those who made more money on unemployment than they did while working. Instead, Republicans pushed for $400 for 20 weeks or 70% replacement of previous wages with a $600 cap.

“I’ve heard grave concerns from states about this proposal and they are simply going to opt out,” said Senate Finance Committee Ranking Member Ron Wyden (D-OR) in an emailed statement Saturday evening.

“Their budgets have been crushed. They cannot afford a 25% match, especially when unemployment trust funds are under tremendous strain and Republicans oppose funding for state and local governments.

Payroll Tax Holiday

A payroll tax holiday will start Sept. 1 and go through until the end of the year. Trump said the holiday may be retroactive to Aug. 1. Workers earning less than $100,000 per year will be eligible for the payroll tax holiday, Trump said. Employers will  be permitted to stop withholding those taxes from eligible employee paychecks during this period.

The payroll tax holiday reduces the amount taken workers’ paychecks to fund Social Security and Medicare, but the benefits of such a holiday or a payroll tax cut can be limited and depend on a worker’s income and employment status. 

Cutting taxes would require Congressional action, but Trump can use his emergency powers to delay collecting taxes—meaning they would theoretically have to be paid back later unless Congress agreed to waive repayment. 

Trump said if he is reelected in November, he may forgive the payroll tax deferment and establish a permanent payroll tax cut.

Trump, who has long advocated for a tax cut to be included in the next stimulus package, was faced with opposition from both Democrats and Republicans. Democrats argued it would do nothing to help the millions of unemployed Americans, and Republicans described it as “problematic.” The White House eventually dropped its request for the payroll tax cut, but has now made an about-face. 

More than 16 million Americans are currently unemployed, according to the most recent jobs report, and 1.2 million Americans filed jobless claims last week, marking the 20th straight week that more than one million people have applied for aid. A payroll tax holiday will have no effect on those individuals. 

Federal Eviction Moratorium

The executive order extends a federal eviction moratorium that expired last week. Trump did not specify how long the moratorium would last, but said it will apply to renters and homeowners.

The CARES Act prevented landlords or housing authorities from filing eviction actions, charging nonpayment fees or penalties or giving notice for tenants to vacate. Those orders only applied to federally subsidized and federally backed housing, and expired on July 24.

An August report from a group of housing experts estimated that 30 to 40 million Americans could be at risk of eviction, stating the U.S. “may be facing the most severe housing crisis in its history.

” Communities of color, which are disproportionately rent-burdened, would be the hardest hit by the eviction crisis.

The experts called for “meaningful, swift and robust government intervention” to prevent long-term negative effects of the COVID-19 housing crisis.

Federal Student Loan Payment Suspension

Trump’s executive order suspends student loan payments through the end of the year and maintains the zero-percent interest period for federal student loans. He said he will ly extend that suspension into 2021.

The CARES Act previously suspended some federal student loan payments, with zero interest, through September 30. Perkins Loans and Federal Family Education Loans not owned by the U.S. Department of Education, along with private student loans, were not included in the forbearance. 

Student loan borrowers working toward Public Service Loan Forgiveness under provisions in the CARES Act had the months of forbearance count toward forgiveness. Borrowers participating in student loan rehabilitation also had the suspended months count toward pulling their loans default.

What About Stimulus Checks? 

The CARES Act provided Americans with one-time direct economic impact payments, also referred to as stimulus checks. These payments were as much as $1,200 per individual, or $2,400 for a couple filing jointly, and provided additional money for qualifying dependents under 17.

As the pandemic has raged on and Americans continue to ride the economic downturn, another round of stimulus checks has been a source of heated debate in Washington. Both Democrats and Republicans agreed that the next stimulus package should include more direct payments to Americans, but couldn’t agree on how much those payments should be. 

Democrats are pushing for $1,200 per family member, up to $6,000 per household. Republicans proposed another round of stimulus payments in their HEALS Act that would follow the same provisions as the CARES Act, but would remove the age cap for qualifying dependents.

Trump’s executive orders do not include provisions to provide another round of stimulus checks to Americans. As negotiations have reached a standstill in Washington, it’s unclear if another stimulus package will be passed and signed into law in the near future.


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