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Four new executive orders for COVID relief, explained: What they do and do not do

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

Sarah Tew / CNET

What does President Donald Trump’s executive order and three memoranda do? really mean? It is a matter of many minds as Americans struggle to understand what the new executive acts can mean their financial situation.

In comparison with the benefits negotiated a major rescue package in recent weeks, critics suggest that the recently signed orders fall short. For example, there is nothing second stimulus control and they do not actually stop drafts. In addition, the payroll tax cut can lead to social security and Medicare because they are funded through payroll taxes.

On Sunday, Finance Secretary Steven Mnuchin said Saturday’s orders are expected to continue the ongoing implementation of CARES Act. However, Senate Minority Leader Chuck Schumer and other Democratic leaders were skeptical about whether the measures could meet their goals.

“President Trump’s latest executive order is so insensitive in meeting the United States’ great need to be pathetic,” he said.

We break down all four of 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 pinching pennies in the middle of the coronavirus outbreak – are responsible for the remaining $ 100 per person per week, retroactively starting August 1st.

During a news conference on Monday, Mnuchin said benefits could come to qualified individuals “within the next week or two.”

Governors have pushed back 25% of the bill, with New York Governor Andrew Cuomo calling it “laughing.”

California Governor Gavin Newsom also expressed concern over the order on Monday. Newsom said massive budget cuts would be needed to implement Trump’s plan. Newsom estimated that matching 25% of unemployment benefits would cost California about $ 700 million a week.

“It would create a burden that even a state as large as California could never address without, again, massive cuts in key services,” Newsom said during a news conference.

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 the DRF’s total balance will be set aside to support ongoing disaster relief and recovery efforts and potential major disaster costs for 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 to the improved benefit, but put a complicated formula there, which will take a while to accomplish at all to put money in the pockets of the American people,” Pelosi said Sunday on Fox news.

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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

While the language of the executive order begins in the path of a proper moratorium on drafts, it misses the mark if you read on. 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.

By comparison, 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 draft provisions.

In addition, the order does not state whether it will provide financial support to tenants, leaving the 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 extends 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, which do not include private 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 will still have 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 the deferred tax completely.

The fine print: The Trump memorandum covers a four-month period from Sept. 1 to Dec. 31 for people earning less than $ 100,000 a year or less than $ 4,000 every two weeks.

In the language of the memo, it is stated that Mnuchin, as financial 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 during 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 measures signed by Trump 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.

On Monday, Schumer pointed out details that the orders were missing. Although action may be taken in the future, so far, Trump’s recently signed policy is failing:

  • Testing, tracking and processing of COVID-19.
  • Money needed to open schools safely and provide PPE (personal protective equipment)
  • Food aid
  • Support for local and state governments
  • Money that ensures that elections can be carried out safely
  • Money to keep post offices open for elections

Will negotiations on the stimulus package continue?

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 negotiations resume soon, the stimulus legislation will probably be put to a vote in a Chamber later this month. 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 the suggestions for HELAL, CARES and Heroes.

Lori Grunin contributed to this story.

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