August 10, 2020

Trump's executive actions on coronavirus aid: What will they do—and are they legal?

Daily Briefing

    President Trump on Saturday took four executive actions intended to extend coronavirus-related economic aid to Americans—but observers questioned whether some of the executive actions are constitutional or whether they would provide Americans with quick economic relief.

    How Covid-19 will impact the financial outlook for the health care industry

    Executive actions look to boost unemployment benefits, suspend payroll tax, and more

    Trump announced the executive actions after Congress failed to reach an agreement on a new coronavirus relief package by last Friday. The White House and congressional Democrats and Republicans had been working to reach a deal on a new coronavirus relief package, but when they appeared unlikely to come to an agreement by the end of last week, Trump said he was considering taking executive action on his own to provide additional aid to Americans.

    Trump on Saturday signed one executive order and issued three memoranda intended to provide Americans with economic relief amid the United States' ongoing coronavirus epidemic.

    The executive order acknowledges that federal policymakers had implemented a moratorium on evictions of certain renters under a coronavirus relief package enacted earlier this year, but that moratorium has expired. In response, the executive order directs the Trump administration to "minimize, to the greatest extent possible, residential evictions and foreclosures during the" federally declared public health emergency over the coronavirus epidemic.

    Specifically, the executive order directs the HHS secretary and CDC director 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."

    In addition, the order directs the secretary of the Department of Housing and Urban Development 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." According to the order, such action could include providing or encouraging assistance to landlords, owners of affordable housing, public housing authorities, and recipients of federal grants related to minimizing foreclosures and evictions.

    The executive order also directs the secretary of the Department of the Treasury and director of the Federal Housing Finance Agency to review all of the federal government's existing authorities and resources that can be used to prevent evictions and foreclosures for renters and homeowners that would be caused by hardships related to Covid-19.

    According to Politico, the administration under the order could extend the federal moratorium on evictions for Americans who live in homes backed by federally guaranteed mortgages—which applies to less than 25% of the country's 44 million rental units.

    Meanwhile, Trump under the three memoranda he issued on Saturday seeks to:

    • Defer without penalties from Sept. 1 through Dec. 31 the 6.2% federal payroll tax on Americans who are not self-employed and have annual incomes less than $104,000;
    • Extend an optional deferral on student loan payments and interest through the end of 2020; and
    • Provide unemployed Americans with a flat, weekly benefit of $400 in addition to the amount they'd typically receive through their state's unemployment benefits program, with 75% of the additional benefit funded by the federal government with money that Congress had allocated under previous coronavirus relief legislation that hasn't yet been spent, and the remaining 25% funded by states.

    "Through these four actions, my administration will provide immediate and vital relief to Americans struggling in this difficult time," Trump said.

    Experts question whether Americans will see aid quickly—or at all

    But many observers have said it's unclear whether Trump has the authority to unilaterally implement some of the measures called for under his executive actions—or whether his actions will have immediate effects for Americans.

    Specifically, observers have said Trump could face legal action over his executive actions related to tax and spending policies, as the Constitution stipulates that Congress holds control over federal spending. Federal lawmakers could choose to file lawsuits seeking to block the executive actions if they believe the actions overstep Trump's constitutional authority as president.

    According to Axios, Trump, himself, acknowledged that his actions could face legal challenges. Referencing Democratic lawmakers, he said, "Maybe they'll bring legal action, maybe they won't," adding, "But they won't win."

    And regardless of whether the actions are constitutionally sound, some experts have said Trump's executive order and memoranda could be difficult to implement.

    For example, some policy analysts have said Trump's plan to boost unemployment benefits is complex and could be costly for states.

    "Nobody is going to see this money in August, and we'll be lucky to see it in September," said Andrew Stettner, a senior fellow at the Century Foundation, a public policy research group (Knutson, Axios, 8/8; Lieber/Cowley, New York Times, 8/9; King, Los Angeles Times, 8/9; Budryk, The Hill, 8/9; O'Donnell, Politico, 8/9; New York Times, 8/10; Executive order, 8/8).

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