BUFFALO, N.Y. (WKBW-TV) — After Congress failed to come to an agreement about extending the weekly federal unemployment benefit, or a new stimulus package, President Trump announced he was using his authority to help people struggling with the pandemic.
The President's first idea was to extend the federal supplemental unemployment benefit, $400 per week, and making states pay 25% of the cost. That controversial idea received a lot of press coverage and some strong opinions.
"I thought it was the greatest thing on the planet," said William Ayers, an unemployed car salesman from North Tonawanda.
"He doesn't have the legal authority to do it. This is not a dictatorship," responded Congressman Brian Higgins (D-Buffalo).
While the debate over the federal unemployment benefit continues on Capitol Hill, there are three other presidential orders that could impact families trying to Make Ends Meet; they cover student loans, evictions/foreclosures, and taxes taken from paychecks.
Tim Eliason, Assistant District Manager for EG Tax in Tonawanda said he is getting lots of calls for advice about the changes taking place.
Eliason spoke to reporter Ed Reilly to explain what tax preparers understand the new rules to be.
STUDENT LOANS:
President Trump issued a Presidential Memoranda to the Secretary of Education to suspend until December 31 payments and interest accrual for student loans. This applies to student loans held by the Department of Education.
While it is meant to help people unemployed by COVID-19, Tim Eliason said this is also a "great opportunity" for those who are still working to make payments knowing it is all going on the principal.
EVICTION/FORECLOSURE:
The President issued an Executive Order requiring the Secretary of Health and Human Services, and the Director of the CDC, to determine if temporary measures halting residential evictions are reasonably necessary to prevent the further spread of the coronavirus.
In addition, the Secretary of the Treasury and the Secretary of Housing and Urban Development are tasked with finding financial assistance to help struggling renters, homeowners, and landlords due to COVID-19.
Tim Eliason explained the reasoning for this is to protect social distancing and prevent large numbers of people from going to shelters, moving from state-to-state, or moving-in with other family members.
However, this gets confusing because Trump's order only applies to properties that are federally guaranteed under Fannie Mae, Freddie Mac, the VA, or Section 8 housing. A large percentage of properties have mortgages from private banks, and those are not subject to the President's order.
Here in New York State, Governor Andrew Cuomo has extended his Executive Order on several occasions to prevent people from eviction. Governor Cuomo's stay on evictions is currently in effect until September.
DEFERRING PAYROLL TAX OBLIGATIONS:
President Trump issued a Presidential Memoranda calling on the Secretary of the Treasury to temporarily stop withholding Social Security and Medicare taxes from paychecks.
While this will put more money in worker's pockets over the next 18 weeks, Eliason reminds people it is only 'deferred.' That means you may have to pay back the deferred tax money in the future.
"Yeah, your paycheck is bigger but it might mean your paycheck will be smaller down the road," added Eliason.
How much of a benefit will this add up to? Eliason said calculations on someone earning $800/week will mean approximately an $1,100 increase in take-home pay.
EXECUTIVE ORDER vs PRESIDENTIAL MEMORANDA
Tim Eliason said it is interesting that only the Presidential Action concerning evictions/foreclosures was considered an Executive Order. The other issues were all listed as Presidential Memoranda, which means they carry less weight, explained Eliason.
And it is important to remember that Congress controls the 'purse strings,' added Eliason.
