President Trump Takes Four New Executive Actions Aimed to Provide COVID-19 Relief

On August 8, 2020, President Trump took executive action in an attempt to provide further federal COVID-19 relief to individuals and business, after talks in Congress regarding another possible recovery package stalled in recent weeks. Here’s a brief breakdown of each of President Trump’s four executive actions:

Executive Order to Provide Assistance to Renters and Homeowners

The CARES Act temporarily suspended late fees and eviction filings until July 25 on properties backed by federal mortgage programs or those that receive federal funds. Those protections have now expired. The President’s August 8 Executive Order gives discretion to the Department of Health and Human Services and CDC to continue to suspend eviction filings. Specifically, the Executive Order directs the “Secretary of Health and Human Services and the director of CDC [to] consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary to prevent the further spread of COVID-19 from one state or possession into any other state or possession.”

The Executive Order further asks the Secretary of the Treasury and the Secretary of Housing and Urban Development to look at existing funds or options for protecting renters, directing them to “identify any and all available Federal funds to provide temporary financial assistance to renters and homeowners who, as a result of the financial hardships caused by COVID-19, are struggling to meet their monthly rental or mortgage obligations” and to “take action, as appropriate and consistent with applicable law, to promote the ability of renters and homeowners to avoid eviction or foreclosure resulting from financial hardships caused by COVID-19.”
 
Memorandum to Defer Payroll Tax Obligations

The CARES Act allows employers to defer payments of the employer portion of payroll taxes through the end of 2020. The President’s August 8 Memorandum attempts to extend this protection to the employee portion of certain payroll taxes.

Specifically, the Memorandum directs the Secretary of Treasury to defer the withholding, deposit, and payment of the employee portion of social security tax (but not Medicare tax) on wages or compensation paid during the period of September 1, 2020, through December 31, 2020, if the employee’s wages or compensation payable during any biweekly payroll period are generally less than $4,000, calculated on a pre-tax basis, or the equivalent amount during other payroll periods. Amounts deferred will be without penalties, interest, additional amounts, or additions to tax.

The Memorandum directs the Secretary of Treasury to issue guidance to implement the Memorandum and to also “explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred” entirety.

Memorandum Authorizing Other Needs Assistance Program for Major Disaster Declarations

The CARES Act provided $600 in weekly federally funded unemployment compensation assistance to eligible unemployed persons, in addition to standard state unemployment benefits. That benefit expired July 31, 2020.

The President’s August 8 Memorandum directs the Federal Emergency Management Agency (FEMA) to assist in providing continued financial assistance to Americans who are suffering from unemployment due to the COVID-19 outbreak by using funds from the Department of Homeland Security’s Disaster Relief Fund (DRF), namely through a $400-per-week supplemental unemployment compensation benefit.

Specifically, the Memorandum authorizes the Secretary of Homeland Security (Secretary), acting through the FEMA Administrator, to make available a lost wages assistance program, retroactively starting on August 1, that provides a $400 payment per week to “eligible claimants” of a state, if the state’s Governor requests lost wages assistance, agrees to the cost-sharing requirement, and agrees to administer delivery and provide adequate oversight of the program.
“Eligible claimants” must receive at least $100 per week in regular state unemployment compensation assistance and certify that their lost wages are attributable to disruptions caused by COVID-19.

With respect to the funding of this program, the Memorandum directs that “up to $44 billion from the DRF at the statutorily mandated 75 percent Federal cost share be made available for lost wages assistance to eligible claimants, to supplement State expenditures in providing these payments.” The Memorandum calls on states to use funds previously allocated to them in the CARES Act via the Coronavirus Relief Fund (CRF), or any funding currently used to support State unemployment insurance programs, to make up the remaining 25 percent state cost share.  Under this cost-sharing breakdown, $300 of the $400 weekly payment would be a federal contribution; individual states would be responsible for the remaining $100.

Notably, the Memorandum provides that at least $25 billion of total DRF balance be set aside to support ongoing disaster response and recovery efforts and potential 2020 major disaster costs.  Therefore, the lost wages assistance program is only available until the balance of the DRF reaches $25 billion or December 6, 2020, whichever occurs first.

Memorandum Providing Continued Student Loan Payment Relief

On March 20, 2020, the President issued an order providing relief to certain student loan borrowers by suspending loan payments and temporarily setting interest rates to 0 percent. The CARES Act extended this relief through September 30, 2020. The President’s August 8 Memorandum moves to extend these protections even further—until December 31. 
 
The suspension of loan payments and interest only applies to “student loans held by the Department of Education,” not privately held student loans.
 
 
The constitutionality of these executive actions has been questioned and legal challenges will likely follow. If you have questions concerning the President’s executive actions and/or any proposed legislation, and/or their potential applicability to you, please reach out to the Ice Miller COVID-19 Task Force for more information.
 
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.