President Trump signed a memorandum directing the Treasury Department to defer payroll taxes from September 1 through the end of the year for those earning under $4,000 (pre-tax) during any bi-weekly pay period (or $96,000/year). Other executive actions, which come amid an impasse on agreeing to additional coronavirus relief between the Administration and congressional Democratic leaders, include allowing a $400 federal unemployment benefit add-on; providing assistance to renters and homeowners regarding evictions; and suspending student loan payments.
Regarding the payroll tax deferral, President Trump said, "If I'm victorious November 3, I plan to forgive these taxes and make permanent cuts to the payroll tax." The Treasury Secretary is permitted under current law to delay the deadline for any action required under tax law up to one year (as occurred earlier this year when the filing date was pushed from April to July). So the payroll tax payments can be delayed, but cannot be forgiven, those taxes will still be owed absent an act of Congress.
As the Washington Post reported, these actions "challenge the boundaries of power that separate the White House and Capitol Hill." President Trump acknowledged that some of these actions could be challenged in court. Assuming negotiators are unable to cobble together an agreement on a stimulus bill, there will be significant uncertainty as to the actual impact of these executive orders.
The $400 unemployment benefit add-on, for example, would not create a federal supplement to state unemployment benefits (as occurred with the $600 weekly supplement under the CARES Act that expired at the end of July). Instead, it would create a new program that could take months to set up, and the funding for which is uncertain (states would be "asked" to cover 25 percent of the costs). White House officials have reportedly studied using leftover money approved by Congress for use by FEMA. But it is unclear if the Administration can repurpose those funds for unemployment benefits.
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