Coronavirus Relief Efforts
Summary of Presidential Actions


August 10, 2020

As financial and health concerns continue nation and worldwide, the United States government previously passed four economic measures (Phases 1, 2, 3, and 3.5) to provide economic relief amid the Coronavirus Disease 2019 (“COVID-19”) pandemic. As prior efforts expired or may expire shortly, on Saturday, August 8, 2020, President Trump signed one executive order and three memoranda to provide additional relief.[1] These presidential actions are summarized below.

Assistance to Renters and Homeowners

Various prior relief efforts implemented certain temporary foreclosure and eviction moratoriums that have either expired or may expire shortly. The President’s executive order calls for the Secretary of Health and Human Services and the Director of the Centers for Disease Control and Prevention to consider whether a halt of evictions for failure to pay rent or mortgage obligations is needed to prevent further COVID-19 spread among states. The order also calls on Secretary of Treasury and the Secretary of Housing and Urban Development (HUD) to identify resources for temporary assistance for homeowners and renters that, as a result of COVID-19, are struggling to meet their monthly rental or mortgage obligations. Last, the order calls on the Secretary of HUD and the Director of the Federal Housing Finance Agency to consider measures to halt evictions or foreclosures resulting from financial hardship caused by COVID-19.

Extension of Enhanced Unemployment Benefits 

The Coronavirus Aid, Relief, and Economic Security Act passed on March 27, 2020 (the “CARES Act”) previously expanded unemployment benefits, including an increase in the amount of unemployment insurance benefits paid by an additional $600 per week through July 31, 2020, in addition to any unemployment benefits provided under State programs. The presidential memorandum to the Secretaries of the Department of Labor and Homeland Security and the Administrator of the Federal Emergency Management Agency directs the use of emergency assistance funding to extend the enhanced benefits through December 27, 2020, though decreasing the weekly amount to $400 per week, in addition to existing state benefits.

While the Federal contribution entirely covered the enhanced benefits under the CARES Act, the Federal contribution under the memorandum will be limited to 75% through the earlier of December 6, 2020, or upon the related budgetary fund dropping to a certain threshold. The memorandum provides that States cover the remaining additional contribution, up to 100% of the applicable cost, through December 27, 2020. The memorandum did not provide details as to when payments of the extended enhanced unemployment benefits would start and there is some uncertainty as to how many states will pay for their portion of the enhanced benefits.

Deferral of Payroll Tax Obligations

A memorandum directs the Secretary of Treasury to defer the withholding, deposit and payment of the employee portion of payroll taxes from September 1, 2020, through December 31, 2020, for employees earning less than $104,000 annually (or less than $4,000 per biweekly pay period). The taxes (6.2% for Social Security and 1.45% for Medicare) are typically deducted from each worker’s paycheck. As this is a deferral, employees would pay the Federal government amounts not paid and employers would deposit those amounts once the tax “holiday” ends. Employers will need to explore the practical and legal implications of collecting taxes not originally withheld from employee paychecks. However, the memorandum further directs additional exploration into potentially eliminating the obligation to pay the deferred taxes.

Continued Student Loan Payment Relief

Prior relief efforts deferred payments and waived all interest, effectively setting the interest rate to zero percent for borrowers with federal student loans owned by the U.S. Department of Education, through September 30, 2020. This additional presidential memorandum orders the Secretary of Education to extend the payment deferral and interest waiver through December 31, 2020. During this time, interest will not accrue for those eligible student loans, and 100% of payments will be applied towards the principal. The deferral period will not adversely impact borrowers participating in specific loan forgiveness programs.


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Important Disclosure: This content is for informational purposes only. Opinions expressed herein are subject to change without notice. Beacon Pointe has exercised all reasonable professional care in preparing this information. Some information may have been obtained from third-party sources we believe to be reliable; however, Beacon Pointe has not independently verified, or attested to, the accuracy or authenticity of the information. Nothing contained herein should be construed or relied upon as investment, legal or tax advice. Only private legal counsel may recommend the application of this general information to any particular situation or prepare an instrument chosen to implement the design discussed herein. An investor should consult with their financial professional before making any investment decisions.

[1]   Note that the constitutional authority of the President’s actions may face legal challenges by either Congress or State officials. The impact of such challenge(s), if any, is unknown at this time.

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