With negotiations for the HEALS Act in deadlock, President Trump’s executive stimulus orders should provide some financial relief. The Covid-19 stimulus payments give an extra $400 a week to the unemployed, ban evictions, deliver student loan relief, and a payroll tax holiday. While the cash on offer is less than the HEALS Act, the executive orders offer economic aid to both unemployed and employed folks.
While the coronavirus pandemic has taken its toll on the health of millions, it has also hit pockets hard. April saw a record number of people claiming unemployment, wages were slashed, and the country recoiled into lockdown. To help cope with the economic turmoil, the CARES Act gave some financial aid. But most of the provisions in the CARES bill finished at the end of July.
So, what happens now? More $1,200 stimulus checks in the mail? Help with paying your rent or mortgage? Or, extensions to unemployment benefits? Let’s see what Trump’s executive stimulus orders could mean for you.
President Trump’s Executive Stimulus Orders
There are four main areas where the president’s executive orders provide economic stimulus for the economy. These orders are:
- Enhanced unemployment benefits up to $400 a week
- A payroll tax holiday for anyone earning less than $100,000
- Student loan relief until December 31
- An extension to eviction moratoriums — although how this works remains to be seen
Of course, this is good news if you’re unemployed and anxious about losing the Covid-19 welfare enhancements. But anyone following stimulus proposals, knows that these benefits are fewer than those offered under the CARES Act. The benefits also fall way below the $3 trillion that the HEROES Act proposed.
The HEALS Act and Executive Orders
How did we get to where we are now with the second round of stimulus packages? After all, the House passed the HEROES Act in May — but that bill never gained any traction. Then Congress debated the HEALS Act — a second round of stimulus checks and extra unemployment payments. But talks stalled when the deadline for approving the HEALS Act passed on August 7.
Now, the president has had to act on his own to approve a Covid-19 relief package. Although Trump’s executive orders for stimulating the economy addresses some questions, many unanswered questions remain.
The Covid-19 Stimulus Directives to Boost the Economy
What do Trump’s new executive stimulus orders mean for you? Let’s look at what we know so far about how these executive directives could put more money in your pocket.
Enhanced unemployment benefits
Under Trump’s stimulus orders, people claiming unemployment benefits get an extra $400 a week. Jobless folks continue to receive regular state welfare and get this additional payment. The federal government would pay $300 of the amount, with states having to come up with the remaining $100.
The extra $400 a week in unemployment payments would be backdated to August 1. This boost to benefits would mean that there’s no break in this part of the stimulus package. But, there’s a catch.
Until the end of July, any worker claiming unemployment got a weekly top-up of $600. So, Trump’s directive on unemployment means a cut of $200. However, the enhanced payments are still more generous than what the HEALS Act proposed.
If you’re jobless and claiming welfare, will you get the extra $400? Some reports say that there could be legal challenges to the executive orders. For example, Trump doesn’t have the power to make decisions on his own about federal spending.
Related reading: Will the HEALS Act change unemployment benefits?
Student loan relief
Trump’s executive stimulus orders extend student loan relief until the end of 2020. The student loan directive would extend the CARES Act provisions until December 31. At present, there is a 0% rate on federal-backed student loans. Also, loan repayments can be deferred until January 2021.
What does this relief package mean for you if you’re repaying student loans? Trump’s exec orders apply if you have a student loan that the Department of Education owns. However, the student loan relief doesn’t apply if you’re repaying a private loan.
Payroll tax relief
To help the teetering economy get back on its feet faster, Trump has signed an order for a payroll tax holiday. You will qualify for the payroll tax relief if you earn less than $100,000 a year. This Covid-19 stimulus would also help employers avoid layoffs or furloughs.
What does this payroll tax relief mean for you? For the time being, you’ll take home more money in your paycheck. But there’s a catch — this relief is a deferral, not tax forgiveness. So, you’d have to pay the tax into federal funds eventually.
Thinking about the November elections, Trump has said that he’ll push to make the tax cuts permanent — but only if elected. He may even extend the payroll tax relief into 2021.
Even though providing a payroll tax holiday sounds like a great idea — it’s only a short-term solution. Many people worry about the long-term effects because payroll taxes fund social security and Medicare.
Trump signed executive orders extending eviction moratoriums. So, you could get protection from evictions if you rent a property that’s backed by a federal mortgage or you’re a homeowner who can’t pay their mortgage. But there’s little detail on how the ban on evictions will work. However, the White House’s memo hinted that the eviction moratorium would be to halt the spread of Covid-19.
For the eviction moratorium to work, help could come from the Department of Housing and Urban Development (HUD). The eviction directives instruct HUD to help struggling homeowners and tenants financially.
Trump’s Executive Stimulus Orders: In Conclusion
Negotiations about new stimulus checks will continue. Some of Trump’s stimulus directives mean that you may get some financial aid until the coronavirus pandemic goes away. But, more talks in the government will resume, especially to hash out details of a second stimulus check.
In the meantime, check out some resources to find a new job or get financial help if you can’t get by on unemployment benefits.