Breakdown of President Trump’s COVID-19 Executive OrdersAugust 10, 2020
In monitoring the federal response to the pandemic, the Detroit Regional Chamber continues to advocate for legislation to bring relief to states by addressing tax revenue lost due to COVID-19. That includes supporting legislative priorities for the next round of CARES Act funding such as business liability protections and expanding employee retention credits.
Below is a quick breakdown of President Trump’s Executive Order, which some Democrats questioned the legality of.
Deferment of $200B+ in Payroll Taxes
Under the Executive Order, the 6.2% Social Security tax would be deferred from Sept. 1 to Dec. 31, 2020. Based on 2019 data, that would be around $200 billion. Because only Congress has the authority to reduce or eliminate payroll taxes, the President has called on legislators to make this deferment a permanent tax cut.
Extend Unemployment Benefits at $400 Per Week, State to Pay Roughly $2B
A reduction from the additional $600 at the outset of the pandemic, these benefits would be comprised of $300 in federal funds but require states to kick in $100 per week. Based on the number of people who received the $600 weekly benefit, Michigan would have to pay an estimated $2 billion+ to make this benefit work.
This comes as Michigan heads into budget negotiations facing a projected gap of about $3 billion for next year. Currently, Michigan has about $94 million remaining of the original CARES Act funding it received after much of it was used to balance this fiscal year’s $2.2 billion budget gap.
Eviction Moratorium Under Consideration
With an estimated 30 million to 40 million renters potentially facing eviction over the next few months nationwide – a rate about 10 times greater than average – the President’s Executive Order recommends the Department of Health and Human Services and Centers for Disease Control study whether or not a moratorium would be “reasonably necessary to prevent the further spread of COVID-19.”
The order also directs the Departments of Treasury and Housing and Urban Development to “identify any and all available federal funds to provide temporary financial assistance to renters and homeowners.”
Student Loan Deferral Extended 60 Days
This extension of the student loan deferral from Sept. 30 to Dec. 31 hints that such extensions may continue until the economy has stabilized. Interest on student loans were suspended in March with deferrals available as total student debt is at about $1.6 trillion in the U.S.
The Call for Liability Protections
The Detroit Regional Chamber has been clear that businesses need liability protections in the next deal. According to a U.S. Chamber Small Business Coronavirus Impact Poll taken earlier this year, two-thirds (67%) of small businesses are worried about coronavirus-related lawsuits.
This week, the U.S. Chamber led a Day of Action campaign on August 10 and organized supporters to urge Congress to pass temporary, targeted liability protection for businesses, schools, and universities. Using the hashtag #JobsNotLawsuits, Americans across the country made their voices heard.
Legislation the Chamber supports in the Senate would ensure entities that are working hard to follow the appropriate health guidelines don’t face an impossible choice: shut down again and risk bankruptcy or stay open and risk a crippling lawsuit.
What you can do:
- Send a letter to Congress urging it to pass liability protections.
- Use the #JobsNotLawsuits hashtag and these social media graphics on social media.
For updates, visit the Chamber’s COVID-19 Business Restart Center.