$600 Weekly Unemployment Check Cut To $400 Under Trump Executive Orders—And More

TOPLINE

President Donald Trump on Saturday signed executive orders offering less unemployment insurance than the first coronavirus relief bill, extending protections for student borrowers and renters, along with a measure temporarily deferring the payroll tax—after negotiations on Capitol Hill for a coronavirus relief bill broke down this week.

KEY FACTS

The order continues weekly unemployment payments that expired in July under the CARES Act, but cuts the benefit to $400 from $600, and directs states to cover 25% of the cost.

Trump said the order also allows employers to “defer payment of the employee portion” of the payroll tax for workers making less than $100,000 per year, retroactively starting August 1 until the end of the year.

Trump has long called for a payroll tax cut as a mechanism for coronavirus economic relief, but the idea was rejected by both parties during negotiations for the first stimulus bill over concerns it would negatively impact Social Security and Medicare funding while not benefitting retired people or those who are unemployed.

Trump extended a moratorium on evictions for renters living in homes with federally backed mortgages, which also expired two weeks ago.

Automatic forbearance for federal student loans under the CARES Act set to end on September 30 was also extended to the end of 2020, but the measure doesn’t apply to private student loans.

Key background

Amid deep disagreements and infighting among Senate Republicans, the White House began negotiating directly with House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) to hammer out an agreement by Friday. But talks stalled because the White House didn’t want the bill to cost more than $1 trillion, and took issue with the Democrat proposal that included extra federal aid to states and cities that Trump called a “bailout” to areas “badly run by Democrats” as well as measures leaving out incentives for schools to reopen. Democrats on Friday offered to cut their proposal to $2 trillion if the GOP would come up to meet it, but Mnuchin dismissed that offer as a “non-starter.”

Further reading

1.8 Million Jobs Added In July As U.S. Economy’s Pandemic Recovery Falters (Forbes)

As Congress Debates Extending Or Cutting Unemployment Benefits, Study Finds $600 (Forbes)

Unemployment Checks Don’t Disincentivize Return To Work (Forbes)

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