Negotiations on a new COVID-19 relief package are at a stalemate with no possibility of restarting the talks any time soon. As reported previously, a group of Senate Republicans introduced the $1 trillion HEALS Act package of pandemic measures. However, this limited measure did not have the support of at least 20 Republican Senators, according to Senate Majority Leader McConnell. Democrats have largely remained united behind the $3+ trillion HEROES Act. The divide between the two sides centers on a few big-ticket items including the size of the package, unemployment benefit levels, state and local government aid and rental assistance.
With Congress at odds regarding how best to move forward on additional COVID-19 relief legislation, President Trump issued four Presidential actions outlining ways in which federal agencies could provide relief to those impacted by COVID-19. President Trump held a press conference on August 8 where he signed four Executive Orders focused on housing, payroll tax cuts, student loan relief and unemployment benefits.
There has been speculation that the Executive Orders could face multiple legal challenges. But at this time, no court challenges have been filed. NMHC and NAA will continue to follow actions related to these Executive Orders, any legal challenges and will push Congress and the Administration to return to the bargaining table to reach a consensus on a comprehensive COVID-19 relief package that addresses the needs of both residents and housing providers.
Read on to learn more about the orders set forth:
Although the President had signaled an extension of the CARES Act eviction moratorium, the executive order doesn’t actually extend the eviction moratorium. The original moratorium, included in the CARES Act, prohibited landlords or housing authorities from filing eviction actions, charging nonpayment fees or penalties or giving notice to vacate. It expired on July 24 and only applied to federally subsidized or federally backed housing. The President’s housing EO calls on the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC) to consider whether an additional eviction ban is needed. “The Secretary of Health and Human Services and the Director of CDC shall 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,” reads the order. It further recognizes that both renters and homeowners are facing potentially significant hardships and are at risk for housing instability. While it urges HUD and the Treasury to identify any federal funds available to assist those struggling to meet their payment obligations, it does not provide new resources – potentially creating a significant funding gap given the expected need for financial assistance.” Lastly, it orders FHFA, in consultation with the Treasury, to “review all existing authorities and resources that may be used to prevent evictions and foreclosures.”
Read the full Executive Order on Fighting the Spread of COVID-19 by Providing Assistance to Renters and Homeowners
- Many Republicans have expressed concern that a $600 weekly benefit, on top of existing state benefits, gives people an incentive to stay unemployed. Initially, the President's plan required states to commit to providing $100 of the $400 a week benefit. On Tuesday, August 11, the White House suggested that a state could instead elect to receive $300 per week in federal disaster assistance without making the $100 contribution, but this will be subject to further clarification.
- Funding for the benefit is to come from the FEMA Disaster Relief Fund so long as the fund contains at least $25 billion or until December 6, 2020, whichever occurs first. Based on estimates from the Committee for Responsible Federal Budget, that would fund approximately five weeks of benefits before exhausting available funds.
- There are two key differences between the eligibility requirements in CARES and the EO. First, the minimum weekly assistance requirement increases from $1 to $100. This is significant because it could preclude many partially employed individuals or individuals with limited work histories from receiving these benefits.
- The EO also requires that an individual certify lost wages are attributable to COVID-19 hardships. Under the CARES Act, the $600 benefit was available to all individuals receiving unemployment compensation.
- As to when this benefit will be available, administration officials expect that it will take several weeks for states and the Federal government to disburse the payments. Others have suggested it could take much longer. Some states are already weeks behind in processing unemployment claims.
- On Tuesday, August 11, the White House suggested that States may be able to elect to receive the benefit without contributing their $100 portion.
The unemployment benefits EO emphasizes the importance of extending supplemental benefits. Specifically, the EO extends additional unemployment payments of $400 a week. Congress had approved payments of $600 a week at the outset of the coronavirus outbreak, but those benefits expired July 31, 2020.
This order instructs the Treasury to use its “authority to defer certain payroll tax obligations with respect to the American workers most in need.” Specifically, the President is calling on the Treasury to defer the withholding, deposit and payment of a portion of the Social Security taxes that certain employees will owe with respect to wages paid during the period of September 1, 2020 through December 31, 2020, for those earning less than $100,000 per year.
President Trump had previously ordered all federal student loan payments have the option for deferment through October 1, 2020. This new order extends the option for deferment through December 31, 2020. Payments are scheduled to restart on January 1, 2021. This relief applies to loans "held by the Department of Education" and does not include privately held student loans, such as loans through a bank.