President Donald Trump signed four executive orders Saturday for coronavirus economic relief after Congress failed to reach a deal on Friday. The executive orders defer payroll taxes through the end of the year for Americans earning less than $100,000 a year. They also defer student loan payments through the end of the year; discourage evictions; and extend enhanced unemployment benefits that expired last week at $400 instead of the prior $600.

According to NBC news, the payroll-tax order defers rather than eliminates them. This means that the government could choose to collect the money later. Nothing in the order requires employers to stop withholding the tax. Payroll taxes pay for Social Security and Medicare.

The president said he was directing the federal government to cover 75% of the enhanced unemployment. The states would have to cover the remaining 25%.

It is not clear whether Trump or any president has the power to take many of the actions in the orders. Speaker Nancy Pelosi on Sunday dismissed Mr. Trump’s actions as unconstitutional and said a compromise deal was still needed.

Treasury Secretary Steve Mnuchin and White House chief of staff Mark Meadows indicated after talks appeared to break down on Friday that Trump could act on his own to implement three pieces under discussion: renewing federal unemployment benefits, extending an eviction moratorium and providing student loan relief..

According to the New York Times, Pelosi had previously indicated Trump may have the authority to extend the eviction moratorium. But the text of that executive order does not actually prohibit any evictions. Instead it asks federal officials to "consider" whether any measures are necessary to halt evictions for failure to pay rent.

The fourth measure, to extend relief for student loan borrowers, seems likely to be the easiest to carry out.

Pelosi and Senate Minority Leader Chuck Schumer told reporters on Friday that they had offered the White House a compromise that would have included about $2 trillion in aid, which was rejected. The two sides remain far apart on several issues including state aid.  Mnuchin said he would be open to further talks.

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Feel free to contact any member of our team at (610) 828-1900 (PA) or (732) 341-3893 (NJ) with questions. Rich Higgins, CPA, managing principal – New Jersey office can be contacted at Richard.Higgins@MCC-CPAs.com. I can be reached at Marty.McCarthy@MCC-CPAs.com. As always, we are happy to help.