Trump issued three memorandums that provided for the extension of additional unemployment payments, the deferment of payroll taxes, and the deferment of student loan payments, and he also signed one executive order that urged the minimization of residential evictions.
Extended Unemployment Payments
Of the executive actions, the potential boost to unemployment payments will likely have the greatest effect on government spending.
In March, Congress passed the $2 trillion CARES Act, which — among many other things — allotted $250 billion for an unemployment payment boost of $600 per week.
The additional payments expired at the end of July, with Democrats in the House and Republicans in the Senate reaching no agreement on an extension.
The House plan seeks to extend the $600 weekly boost until the end of the year, while the Senate plan calls for the additional payments to be extended through September but reduced to $200 weekly.
Under Trump’s memorandum, the additional unemployment payments could be extended through December 27 at $400 per week.
$44 billion in federal funding is to come from the Disaster Relief Fund, which the memorandum states “has more than $70 billion in emergency assistance funding available.”
The remaining $25 billion is to “be set aside to support ongoing disaster response and recovery efforts and potential 2020 major disaster costs.”
However, the federal government would only provide 75 percent of the payment and states would be required to contribute the other 25 percent.
States must agree to the cost-sharing requirement in order to receive funds.
Governor Greg Abbott said in an interview on Monday that Trump’s order would allow for states to use existing CARES Act Funds to pay for their share of the extension, but conveyed hope that Congress would pass legislation for the federal government to fully fund the extended payments.
The Texas Workforce Commission (TWC) stated that they are “expecting to receive guidance this week from DOL to properly interpret the implementation and funding options that are available for states.”
“TWC will share information on the website and social media as soon as we have updates,” they said.
The unemployment rate in Texas skyrocketed in March and April to 13 percent after local governments and Abbott issued lockdown orders in response to the COVID-19 pandemic.
Unemployment in the Lone Star State declined in June and July to 8.6 percent, still more than double pre-pandemic levels but on a consistent downward trend.
Payroll Taxes, Student Loans, and Evictions
Trump’s two other memorandums and executive order have less to do with federal spending.
Under his policy, employees with salaries below $104,000 can defer their payroll taxes between Sep. 1 and Dec. 31.
The memorandum instructs the Secretary of the Treasury to “explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred.”
Unless Congress passes legislation to that effect, individuals would still be required to pay their deferred taxes.
Federal student loan repayments were deferred under the CARES Act, but that deferment is set to expire at the end of September.
In its place, Trump’s memorandum directs the Secretary of Education to continue the deferment until the end of the year.
With respect to evictions, Trump directed the secretaries of the Treasury and Housing and Urban Development (HUD) to identify government funds that they can use to “provide temporary financial assistance to renters and homeowners” amidst the coronavirus pandemic.
Texas Attorney General Ken Paxton issued an opinion last week asserting that local governments operating under a disaster declaration are not authorized “to independently rewrite state law as it applies to their jurisdiction to prohibit, delay, or restrict the issuance of a notice to vacate.”
Political Responses
Trump’s executive actions have been sharply criticized by many Democrats as “unworkable,” and also by some Republicans who believe that the president’s actions exceed his constitutional authority.
Rep. Al Green (D-TX-09), for instance, said that “Cutting Social Security and Medicare” — the bulk of payroll taxes — “would cut retirement and health care security for many seniors across our nation who have worked hard throughout their lives.”
“We cannot allow this President’s executive order to rob them of these necessities,” said Green.
Rep. Lloyd Doggett (D-TX-35) similarly criticized Trump’s memorandum on payroll taxes, calling it “a fancy-worded memo to Sec. Mnuchin creating confusion for both employers and employees.”
“Still, it signals that the self-styled ‘king of debt,’ would weaken Medicare and Social Security by infringing on its tax base,” said Doggett.
While not going as far as Sen. Ben Sasse (R-NE), who said “the pen-and-phone theory of executive lawmaking” that Trump displayed in his actions is “unconstitutional slop,” Rep. Chip Roy (R-TX-21) noted that he “had some substantive concerns.”
“[T]his is not how we should be making policy [and] allocating federal dollars,” said Roy.
“I was the First Assistant Attorney General of Texas when we challenged President Obama’s DACA orders,” said Roy in an interview. “As a member of Congress, Article One, I don’t like having the executive branch take action unilaterally, but the president is doing that in part because this Congress is refusing to do its job.”
Despite criticisms against the president, lawmakers are avoiding a legal challenge to his actions and have yet to reach any legislative agreements on another round of coronavirus relief.
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Daniel Friend
Daniel Friend is the Marketing and Media Manager for The Texan. After graduating with a double-major in Political Science and Humanities, he wrote for The Texan as a reporter through June 2022. In his spare time, you're likely to find him working on The Testimony of Calvin Lewis, an Abolition of Man-inspired novel and theatrical podcast.
