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Executive order for COVID relief, explained: What all four new directives mean to you

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Will Trump’s new executive order help you or hurt you?

Sarah Tew / CNET

Following the executive order and three memoranda signed by President Donald Trump on Saturday, Americans are working to understand what Trump’s actions can – and may not – means for their financial situation. The administration said the directives are designed to increase financial relief for both employees and unemployed workers through the ongoing coronavirus recession. But they do not include all the benefits that were negotiated a major rescue package in recent weeks. For example, there is nothing second stimulus control and they do not actually stop drafts.

“These executive orders are based on our ongoing implementation of CARES Act“That’s delivering meaningful results for the American people,” Treasury Secretary Steven Mnuchin said in a statement on Sunday. However, Democratic leaders were skeptical about whether the measures could meet their goals.

“Unfortunately, the president’s executive orders described in one word can be ‘small.’ News Sunday, said that Trump’s reduced payroll tax would undermine social security and Medicare, which is funded through payroll taxes.

Here’s all we know about Trump’s executive actions, how they can help, if there are any catches and why some may not pass.

Improved unemployment benefits, with a catch

What it is: Following Trump’s memorandum, the federal government would contribute $ 300 off $ 400 payment awarded in memo (down from $ 600 for the CARES Act, which ended July 31). Individual states – which are already penniless in the middle of the coronavirus outbreak – are responsible for the remaining $ 100 per person per week, retroactively starting August 1st. Governors have pushed back 25% of the bill, with New York Governor Andrew Cuomo calling it “laughable.”

How it would be financed: Trump unilaterally seeks to use remaining or unused FEMA funds to pay unemployment benefits.

“I’m leading up to $ 44 billion from [Disaster Relief Fund], “Says Trump’s memorandum.” At least $ 25 billion of total DRF balances will be set aside to support ongoing disaster response and recovery efforts and potential major disaster costs by 2020. ”

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There is some question about the legality and practice of some of these orders.

Sarah Tew / CNET

Experts predict that this year’s hurricane season will see an “extremely active” series of storms. According to the National Oceanic and Atmospheric Administration, hurricanes could cost upwards of $ 22 billion per storm.

Can there be a legal challenge? This executive measure can be legally challenged because the constitution gives Congress control over federal spending. As such, Trump does not have the judicial authority to issue binding executive orders on how money will be used during the coronavirus pandemic.

Another objection“The executive order and memorandum” do not give the money for the improved benefit, but put a complicated formula there, which will take a while to accomplish to put money in the pockets of the American people, “Pelosi said Sunday on Fox News .

“The state Department of Labor thinks it could happen much, much faster than that,” White House economic adviser Larry Kudlow said on Sunday, adding that people could expect checks in a couple of weeks.

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Will there be a new check in the mail for a one-time incentive payment or improved unemployment? Both are possible.

Angela Lang / CNET

Order of release: Protection has not yet been renewed

The CARES Act forbidden late fees and notifications of eviction until July 25 on properties supported by federal mortgage programs such as Fannie Mae, or those receiving federal funds such as HUD. The Republican-enacted HEALS Act did not address the provisions on drafts, and Trump’s executive order is surprisingly low on detail.

It leaves the decision to ban exclusions in the hands of Health and Human Services Secretary Alex Azar and Centers for Disease Control and Prevention Director Robert Redfield, without taking any official stance.

“The Secretary of Health and Human Services and the Head of the CDC shall consider whether any measures temporarily suspending the eviction of tenants for non-payment of rent are reasonably necessary to prevent the further spread of COVID-19 from one State or possession to another State or possession, ”said the White House memo on the draft.

In addition, the order does not specify whether it will provide financial support to tenants, leaving this decision to Mnuchin and Housing and Urban Development Secretary Ben Carson.

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If your student loan is postponed, you may have to pay the full amount later.

Sarah Tew / CNET

Termination of student loans pays out the original deadline

The White House memorandum on the postponement of student loans moves to waive student loan interest until 31 December, which extends the current exemption under the CARES Act, which will expire on 30 September by two months. Payments are scheduled to resume on January 1, 2021.

There is a catch: Trump’s memo applies to loans “held by the Department of Education” that do not include privately owned student loans, for example through a bank.

The controversial payroll tax cut: How it works

A pet project by Trumps that he’s been running for months, the “payroll tax vacation,” is trying to defer your federal tax bill, which means you would take home more money per paycheck – temporarily. Since this is a deferral and not a tax forgiveness, you would still need to pay these taxes after the deferral period has passed, but without having to pay additional interest or tax. The memo includes language for exploring ways to eliminate deferred tax completely.

The fine print: Trump’s memorandum covers a four-month period from September 1 to December 31 for people earning less than $ 100,000 a year, or less than $ 4,000 every two weeks (before tax).

In the language of the memo, it is stated that Mnuchin, as finance secretary, can exercise his power to “defer withholding tax, deposit and pay the tax.” According to the quoted American code, Mnuchin could extend this by one year.

Payroll taxes fund Social Security and Medicare.

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There are limits to the president’s executive powers, which could be tested in the coming days.

Sarah Tew / CNET

Can Trump be sued? Congress has the power to write and pass laws on financial decisions. The White House cannot forgive taxes without congressional approval.

Asked if he was concerned about the legality of an executive action at a news conference Friday, the president said, “No, not at all … yes, you’re always right. Everything you do, you’re right.”

How can an executive order differ from legislation?

So far, the executive actions that Trump has signed will only cover the four topics above, rather than the large scope of either The stimulus proposal of the Democrats or Republicans. Democrats have said an executive order will not go far enough.

Will negotiations on the stimulus package continue?

Stimulus control discussions may increase again this week, with democratic leaders reiterating their call for bipartisan negotiations to agree on a more comprehensive solution.

“We are ready to meet the White House and the Republicans halfway,” said Dick Durbin, a Democratic minority. “We have said it from the beginning.”

Mnuchin did not confirm whether talks would resume, but expressed openness to the possibility. “If we can get a good deal, we’re willing to do it this week,” he told CNBC on Monday.

If calls resume quickly, stimulus the legislation can probably go to a vote in a chamber as soon as Tuesday or Wednesday. Both chambers must vote before the legislation lands on Trump’s desk for his signature. If an agreement is reached in the coming weeks, it is also possible that the executive measure will be invalid.

If you are looking for more information we have looked at how soon you can get your second stimulus check and compared HEALS, CARES and Heroes stimulus proposal.

Lori Grunin contributed to this story.

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