On August 6, 2020, the Senate adjourned without passing a stimulus package. Senate Majority Leader Mitch McConnell (R-KY) wasn’t involved in the talks, leaving Senate Minority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) to work directly with Treasury Secretary Steve Mnuchin and White House Chief of Staff Mark Meadows. As of Friday night, the sides reported that they had not reached an agreement.
On Saturday, apparently frustrated with Congress’ inaction, President Trump issued a number of Executive Orders and Memoranda affecting payroll taxes, unemployment benefits, eviction procedures, and student loans.
Since the orders were issued separately, that’s how I’m tackling them. You can read my take on payroll taxes here, and my summary on student loan relief here. Next up: unemployment benefits.
Concerning unemployment benefits, the Order says: I am hereby directing the Federal Emergency Management Agency (FEMA) to assist in providing benefits from the DRF, and am calling upon the States to use their CRF allocation, to bring continued financial relief to Americans who are suffering from unemployment due to the COVID-19 outbreak.
You can read the entire Order here.
Here’s some context. On March 27, 2020, Congress passed the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act.” The final version was bigger than the original Senate proposal but smaller than the subsequent House proposal. Included in the CARES Act was unemployment relief. Normally, the amount that you can receive varies by state but typically works out to about half of your prior income. Benefits are generally payable for 39 weeks (before the CARES Act, it was 26 weeks in most states). In addition to your state benefits, under the CARES Act, the federal government paid out an additional $600 each week through July 31, 2020. And yes, those benefits are taxable.
The CARES Act federal unemployment benefits expired on July 31, 2020. The House-passed HEROES Act would have extended benefits through January 31, 2021, and expanded other unemployment-related benefits. The Senate-proposed American Workers, Families and Employers Assistance Act (part of a series of proposals known as the HEALS Act) would have continued payments up through October 5, 2020, but at a reduced rate of $200/week; then, beginning in October, the payments would have increased so that, when combined with the state unemployment payment, it would represent 70% of lost wages.
The President’s Order now directs FEMA to redirect funds from the Department of Homeland Security’s Disaster Relief Fund (DRF) to cover 75% of the costs of benefits. States would cover the remainder by using their own funds, including those made available through the coronavirus relief fund (CRF).
The funds – a total of $400 in weekly benefits – would be retroactive to the week ending August 1, 2020, and would last through December 27, 2020. There was no explanation for how the President arrived at the number, but folks since have pointed out that the $400 benefit was the average of the proposals offered by the House ($600) and the Senate ($200). If you do the quick math, you’ll see that the $400 payment would be paid from $300 in federal money and $100 in state money. The President says that under this plan, “states will be able to offer greater benefits if they so choose.”
If you have questions about whether you are eligible for unemployment benefits, check with your state. The Department of Labor has a helpful directory of each state and their labor office contact information on this page.
In further remarks he made on August 8, the President referred to the benefits as generous, saying: For this reason, I’m taking action to provide an additional or an extra $400 per week in expanded benefits: $400. Okay? So, that’s generous, but we want to take care of our people. Again, it wasn’t their fault; it was China’s fault.
