On August 8, 2020, after weeks of back and forth in which Congress failed to reach an agreement to provide additional stimulus relief to Americans, the President signed four executive orders meant to provide financial relief. An executive order is a signed, written, and published directive from the President that manages some operation of the federal government. Executive orders are not legislation, and they don’t require approval from Congress.1 An executive order cannot be overturned by Congress, but Congress can make it difficult or impossible to carry out an executive order by passing legislation to remove funding.
While it’s not yet clear when the latest executive orders may go into effect, we want to help you better understand what they include. Based on the latest reporting and the written statements, here is what we know:
The latest Presidential Executive Orders include four key components:
- Provide Weekly Federal Unemployment Benefits
With the previous CARES Act, unemployed workers were eligible for an additional $600 in weekly unemployment benefits from the federal government, on top of state-authorized weekly benefits. Those benefits expired on July 31, 2020. Pursuant to the President’s executive order, the federal government would provide $300 in weekly unemployment benefits and individual states would provide an additional $100 per week. However, many states have announced that they would not be able to meet that commitment. To help states provide the additional funds, the Federal Emergency Management Agency (FEMA) and the U.S. Department of Labor (DOL) are offering an assistance program. Individual states can apply for the Lost Wages Assistance (LWA) program to access the funds they need to provide the additional $100 in weekly benefits, as outlined in the executive order.2 States must apply by September 10, 2020. Even if states do not provide the additional $100 in weekly benefits, eligible unemployed workers can still receive the $300 each week from the federal government. These federal unemployment benefits will last until December 27, 2020, or until one of three other milestones are reached:
- FEMA spends $44 billion from the Disaster Relief Fund,
- The Disaster Relief Fund reaches $25 billion, or
- Legislation providing supplement federal unemployment compensation is passed.
Unemployed workers, including those who are self-employed and gig workers, will be eligible to receive these benefits.
- Eviction Moratorium
Thanks to provisions under the CARES Act, landlords and housing authorities were prohibited from filing evictions, giving notices to vacate, or charging nonpayment fees or penalties. That provision expired on July 24, 2020. The new Presidential Executive Order does not extend these benefits. Rather, it asks the Secretary of Health and Human Services and Director of the CDC to consider if any additional moratorium measures should be put into place.3 It also asks that the Secretary of the Treasury and the Secretary of Housing and Urban Development identify any available federal funds to provide temporary financial assistance to those who can’t pay their rent or mortgage.
It’s not yet clear what action has or will be taken on those two requests. Learn more about the eviction moratorium request here.
- Extend Federal Student Loan Deferment and 0% Interest
Under the CARES Act, federal student loan repayments were suspended with 0% interest rates through September 30, 2020. The Executive Order requests to continue both measures on federal student loans through December 31, 2020.4 Learn more about the impact of the CARES Act on federal student loans on the Federal Student Aid website. Neither the CARES Act nor the executive order offers relief on privately-held student loan payments.
- Pause Payroll Tax
Finally, in accordance with the fourth Executive Order, the President directed Treasury Secretary Mnuchin to issue guidance allowing employers to defer payment of the employee portion of social security payroll taxes on earnings from September 1, 2020, to December 31, 2020. This would apply to any employee who earns less than $4,000 bi-weekly before taxes, or the equivalent amount on other pay cycles (for instance, $2,000 a week before taxes).5 This means that workers who earn less than $104,000 in gross earnings annually would be eligible for a payroll tax holiday. Employers have the option to defer social security payroll tax, but they aren’t required to do so. The payroll tax deferral ends April 30, 2021. Find out more about how the payroll tax holiday could work here.
Will there be a second stimulus payment?
A stimulus payment was not included in the recent Presidential executive orders. However, although it’s unclear whether Congress will provide for a second round of economic stimulus payments, the stimulus proposal considered by Congress before the recess included the same $1,200 stimulus payment for eligible individuals as was previously provided under the CARES Act. That proposal, the Health, Economic, Assistance, Liability Protection, and Schools Act (HEALS Act) is still being considered by Congress. Congress is currently on recess, with a tentative return date after Labor Day.6 This means, unless Congress returns from recess early, further discussion of HEALS or any other proposals will be delayed until after Labor Day.
