4 Ways the New Executive Orders Will Affect You.

**The legality of these executive orders are being scrutinized by both sides of the isle and may be contested in court.**

The fight against the Covid-19 pandemic continues as President Donald Trump acted last Saturday by signing four executive orders. We would like to review the president’s actions in this newsletter. Spoiler – the payroll-tax will likely have to be paid back.
 
 Executive Orders
 
The use of executive orders is common among presidents. George Washington was the first U.S. president to issue executive orders, as did all his successors, with the exception of William Harrison.
 
What has changed over time is the frequency with which U.S. presidents have issued executive orders. While Presidents George Washington and Abraham Lincoln only issued 8 and 48 executive orders respectively, Presidents Ronald Reagan and Bill Clinton issued close to 400 each, and Presidents George W. Bush and Barrack Obama almost issued 300 each. While the current President Donald Trump has only issued 180 executive orders to date, he has the highest average per year in office of this select group. See chart “Executive Orders by President” for details. Note: The president with the most executive orders in history was Franklin D. Roosevelt with 3,522 executive orders.

Covid-19 Executive Actions
 
Since Covid-19 relief negotiations failed last Friday, President Trump signed four executive actions on Saturday to address economic woes amid the pandemic. In doing so, he focused of four specific areas:

Restarting Unemployment Benefits
 
The president extended the federal unemployment benefit program, which expired on July 31, and reduced it to $400 per week, down from $600. However, the federal government will only pay 75% or $300, leaving state governments to cover the remaining $100. This weekly benefit is in addition to regular state unemployment benefits, which vary in amount depending on the state.
 
This measure should help counteract a looming downward spiral as cash-strapped households are forced to cut their expenditures. However, it does not address the needs of small businesses, which initially received support under the Paycheck Protection Program (PPP). The federal government provided forgivable loans to more than 5 million small business and not-for-profit organizations via the PPP. The final deadline for the PPP was Saturday and it wasn’t extended.
 
Funding for the federal unemployment benefit program will come from Federal Emergency Management Agency’s Disaster Relief Fund (FEMA), which is usually devoted to things like hurricane recovery.
 
 Extending Eviction Moratoriums
 
The eviction moratorium extension sounds much better than it really is. The original program, passed under the Cares Act by Congress, offered a 120-day moratorium on evictions of renters who live in buildings that have a mortgage guaranteed by the federal government, which covered approximately 1/3 of all renters in the U.S. The current executive order extends this program only in the way that it directs the Treasury and the Department of Housing and Urban Development to identify funds that could be used to help people who are struggling to meet their rent.
 
Given the indirect instructions of this executive order, it is difficult to estimate the time when it will be fully deployed and the effect that it will have on the rental economy. This executive order could have been stronger.
 
 Payroll-Tax Holiday
 
The idea is to pause the payroll tax until the end of 2020. This would apply to individuals making less than $100,000 per year. Starting September 1, employers are allowed to defer payment of the employee portion of the Social Security tax. Employees would receive a larger paycheck now, which would help them to improve their cash flow and manage their way through the pandemic.
 
However, there is one important caveat employees should be aware of. The payroll tax is only on pause for the time being. The deferred taxes will eventually come due and they will have to be paid, unless Congress decides to forgive this tax payment. The president cannot unilaterally revoke tax liabilities that Congress has enacted.
 
If you do not need the extra money from the payroll-tax holiday, it would be a prudent idea to set it aside until the end of the year, in case the amount will have to be paid back.
 
 Deferring Interest on Federal Student Loans
 
This action suspends all interest on federal student loans and payments through the end of the year, which extends the existing delay past the current deadline of September 30. This is a generous gesture to students.
 
 Are These Actions Enough?
 
There is talk that some of the president’s actions are not legal and that he may face a lawsuit. In such a case, the main loser would be the U.S. economy as individuals and business owners suffer the consequences.
 
The president’s executive orders are only the first step in stabilizing the economy. Most likely his actions are not enough on their own. Congress had been negotiating aid amounts between $2 and $3 trillion. The four executive orders wouldn’t come close to these amounts.
 
While the president’s executive orders are not perfect and most likely not enough, they are strong signal to congress to get together and act on the behalf of all of us.
 
 We leave it up to you to judge the quality of actions of our president. Yet, in a time like this, we would like to offer you a form of investing that focuses on the safety of your principal as well as constant cash flows at a high rate of return. Thus, we encourage you to take a look at the concept of First Deed Lending, which provides you with the advantages of renting, without the hassle of being a landlord. This is your opportunity to earn a stable stream of income during unstable times.