President Donald Trump signed four orders on Saturday to extend economic relief for Americans as the coronavirus pandemic rages on.
The move came as Congress failed to arrive at a compromise between House Democrats' $3 trillion stimulus passed in May and the $1 trillion bill Senate Republicans introduced at the end of July.
At a time when 31 million people are on unemployment, Trump's executive orders will suspend payments on federal student loans and direct agencies to consider blocking evictions and foreclosures. They could also give some people a boost in unemployment payments and suspend payroll taxes.
After the orders were made public, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer called them "meager announcements" that were "unworkable, weak and narrow policy announcements."
Cowen Research Group said in a commentary Monday that the actions appeared to be "more a tool to deflect blame if/when the economy fails."
While the measures aren't as broad as a congressional stimulus would be, analysts from Goldman Sachs Economic Research estimated the executive orders provided about $200 billion in fiscal relief that would help certain programs in the short term.
And while various news reports predicted that lawsuits were likely to be filed over whether Trump had the authority to issue the orders, the analysts said pursuing legal action "could be politically fraught" because the executive orders "accomplish politically popular goals."
Here are five observations from analysts about the executive orders Trump signed over the weekend.
Pushing the deadline for a stimulus bill to September 30
First, there's a lot that the president's executive actions can't accomplish. For instance, they don't include another round of direct checks to individuals, more aid for small businesses, or help for states or schools.
Congress would still need to act to pass those measures, and analysts suggested that might not happen until September because Democrats and the White House are at an impasse.
Henrietta Treyz, the director of economic policy at Veda Partners, predicted a September timeline in a note sent Sunday because of how talks deteriorated. Trump's orders also pushed back the urgency to pass a stimulus, she said.
She predicted Congress would attach the deal to a spending bill that must be passed before September 30 to avoid a government shutdown.
Even the spending bill isn't expected to be a done deal, Treyz said after conversations with Democrats and Republicans over the weekend. Lawmakers expect to pass a short-term bill that would fund the government until about mid-December.
"The scale and scope of further stimulus will be dependent on voter opinion, the unemployment rate, and the state of the 2020 election polling," she wrote.
The order freezes payroll taxes — but it's not clear if workers will get the money or have to pay it back
Trump is having the Treasury Department suspend the collection of payroll taxes for workers who make less than $104,000 a year. The employee portion of the payroll tax is a 6.2% levy on wages, which goes toward funding Social Security.
The savings, if passed on to individuals, amount to about $496 a month for workers making less than the maximum, Treyz estimated. Unless Congress acts, people would need to pay the money back later.
Because the tax is simply suspended, Goldman Sachs said it was unclear whether employers would give the money to their workers or hold on to it, in case they're required to pay the tax later. Employers typically take the payroll tax out of worker's paychecks and give it directly to the government.
Trump's executive order directed the Treasury secretary to look at ways to get rid of the tax, including through legislation. Trump appeared to suggest Saturday that he wanted to press Congress to permanently get rid of the tax, but White House economic adviser Larry Kudlow clarified the remarks Sunday on CNN's "State of the Union."
"I think what he was saying is the deferral of the payroll tax to the end of the year will be made permanent," Kudlow said. "It will be forgiven. The tax is not going away."
Republicans and Democrats already balked at the idea of suspending the payroll tax during stimulus negotiations. Treyz called the odds of Congress cutting the tax "low but possible," pegging them at 30%.
Length of time: September 1 to December 31.
Providing a $400 boost to unemployment payments, at least for a few weeks
One of Trump's orders hopes to provide an extra $400 a week to people's unemployment payments, though it's likely to be applied unevenly across states.
It's meant to help replace a portion of the $600-a-week boost to employment payments that Congress instituted in March but that expired July 31.
The order asks states to cover a quarter of the costs — or $100 a week per person — by giving them the option of using $80 billion in unspent money from an earlier stimulus. It's not clear how quickly states will be able to distribute the aid.
Kudlow said Sunday on CNN that people would start getting checks "in a couple of weeks" and Treasury Secretary Steven Mnuchin said on "Fox News Sunday" that states told the administration they could get the unemployment payments "up and running immediately."
In response to a question about whether states would go along with the order on Saturday, Trump said of governors, "If they don't, they don't. It's up to them."
Not all states have the same amount of stimulus money left, Goldman Sachs analysts said. Blue states have spent about 40% of their funds, and California has already used all of its money from the federal government. Red states and swing states, however, have spent only 15% of their money, the analysts wrote. States that don't have money left would need to pull the funding from elsewhere.
Goldman Sachs analysts predicted the payments would last for a month, while Treyz of Veda Partners predicted five weeks. The federal share for unemployment payments will come from a $44 billion fund for disaster relief.
Length of time: Retroactive to August 1 and until the money runs out in about a month.
A pause on student-loan payments until the end of the year
People who took out federal student loans for their education won't have to pay them back — or pay interest on them — until the end of this year. The loans are already suspended until September 30, and the Trump administration has the power to extend the suspension.
The Trump administration doesn't have the power to forgive loans. Democrats have proposed eliminating $10,000 in private and federal student loans for borrowers and extending the pause on federal student loans until September 2021.
Goldman Sachs estimated Trump's move would defer about $10 billion in payments.
Length of time: October 1 to December 31.
Consider blocking evictions and foreclosures
Trump directed agencies to look at ways of stopping evictions and foreclosures for people who can't make their payments because of economic hardship tied to the pandemic. The order also directs agencies to see whether they can make more money available for housing assistance.
"The order doesn't explicitly extend the limited moratorium on eviction notices from federally backed rental properties," Goldman Sachs wrote.
Congress blocked evictions for renters of properties that get federal assistance as part of an earlier stimulus, but the pause expired July 24. Analysts had previously expected that Trump would extend the evictions ban, and some states and local governments have also blocked evictions.
