Will President Trump's Executive Orders Help Your Own Personal Finance Situation

• Author: Mary Singleton
• Posted: 2024-09-13

President Trump recently signed four Executive Orders addressing matters that were in the original CARES Act and lapsed. Since Congress has not yet agreed to a new stimulus bill, these protections or subsidies have expired. President Trump has tried to fill the gap by circumventing Congress. Putting aside questions about the legality of the Executive Orders, you need to understand what exactly these Orders do and how they will or will not impact your own personal financial situation. Below, we will address each of the four Executive Orders.

Expanded Unemployment Benefits

The CARES Act included a $600 weekly payment in addition to the standard state unemployment benefit. This benefit was immensely popular and kept many families afloat for months when they were jobless and stuck at homes due to lockdowns. However, there was a debate about whether extending these benefits kept people from looking for work.

President Trump attempted to take a middle ground and issued an Executive Order giving people $400 per week. However, these checks are not yet arriving in people's accounts, and they may never. There are numerous dots to connect before this can happen, assuming the Democrats do not challenge this in court. The Executive Order takes money from FEMA's disaster relief fund to pay for these benefits. First, the states must each cough up $100 per week for each check. Many states, without any type of financial aid from Washington, simply do not have this money. Without the state's contribution, the expanded benefit is not possible. Moreover, it would take states weeks to set up this type of program even if they did have the money to contribute. Finally, the amount of money that the federal government has access to in the FEMA fund would only be enough to fund expanded unemployment benefits for a number of weeks.

The Eviction Moratorium

Those who are expecting President Trump's Executive Order to keep their landlord from evicting them for back rent will be disappointed. The Executive Order is not an eviction moratorium. It would take much more than an Executive Order for the President to be able to put a halt to eviction. It would actually require a rule from the Executive Branch. It would certainly be much more effective if Congress passed a law like it did in the first place. What this Executive Order is represents a direction for the Department of Housing and Urban Development to study the issue further. It was an Executive Order relating to evictions but not an order barring evictions. In the meantime, landlords are still able to carry out the eviction process, and there is no federal law to stop them.

Payroll Tax Deferment

You should note the key word in the heading. This is a deferral and not a holiday. When the tax was cut during the Great Recession, the Social Security Trust Fund was reimbursed by the General Fund of the Treasury. Here, the Executive Orders merely orders the suspension of collection efforts. Even President Trump acknowledges the fact that he cannot unilaterally cut or eliminate the tax. The problem for employees and employers is, absent additional action, this merely is a loan to the taxpayer that must be repaid at the end of the year. There is an open question whether some employers will even stop collecting payroll taxes since they may be on the hook for repaying the payroll tax if the employee does not do so themselves. So far, many employers are still trying to figure out how to proceed and have not actually suspended payroll tax collections.

Student Loan Deferrals

This is the one area where you would actually get immediate help due to President Trump's Executive Order. There is no question that he has the authority to suspend student loan debt collection efforts. Note that this is not the same thing that the student loan forgiveness that is part of Joe Biden's campaign platform. This pushes off any payments due until January 2021. The good news is that you do not need to pay interest that would otherwise accrue during this time as all interest is currently frozen. This would just push off the due date for your loans. In other words, the term of your loan would be extended by the nine months for which payment was frozen. This does not apply to private student loans that still remain due.