Executive order creates a $400 unemployment subsidy—but is it enough for drivers?

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For the last few weeks, we’ve been watching and hoping that the federal government would find a way to extend the $600 Pandemic Unemployment Assistance (PUA) subsidy that expired July 31, 2020. 

But, sadly, a week after the expiration date it became apparent that White House representatives and congressional representatives from both parties couldn’t come to an agreement about extending it.

Both sides were resolute in holding their ground on many of the points in their respective versions of proposed legislation to cover pandemic relief. The Democrats, who introduced their legislation in May 2020, held fast to the $600 weekly unemployment subsidy. Republicans, who didn’t introduce their bill until July 2020, proposed reducing the subsidy to $200 per week. 

Neither side would budge, and as of Friday afternoon, August 7, negotiations had stalled. President Trump responded to this impasse by signing four executive orders, one of which authorized the continuation of PUA supplemental payments at a reduced amount.

In this post, we’ll take a look at what’s been done to break the logjam created by stalled negotiations among the usual political players, and what drivers can expect, including:

  • The executive order and what it offers
  • What we didn’t get… yet
  • When we can expect money to begin flowing again
  • What might happen if Congress (or someone else) objects to these orders
  • How drivers can do their part

The executive order and what it offers

The executive order, says the American Bar Association, is “a signed, written, and published directive from the President of the United States that manages operations of the federal government.” Ideally, decisions about spending for programs like the PUA are made by Congress, which is the only branch authorized to create laws.

This was a unique situation, however. Since Congress and the White House were unable to agree on what to do about extending certain provisions in the CARES Act, which addressed acute problems arising from the COVID-19 pandemic, the executive order came into play. President Trump signed four executive orders related to extending provisions in the CARES Act on Saturday afternoon, August 8, 2020.

Now, the federal government is under order by the president to execute the provisions set out in the executive orders, as of the time they were signed. The order pertaining to the extended unemployment subsidy is officially titled the “Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster Declarations Related to Coronavirus Disease 2019.” 

When the $600 unemployment subsidy expired on July 31, we all wondered what would happen next, and now we know. Per the executive order, the supplement will continue through December 27, 2020, but it will be $400 per week rather than $600.

The president and a number of Republican legislators are convinced that an extra $600 per week is too much. They’ve often said publicly that it was more than many people earned while working—and by earning more money for staying home, they had little incentive to return to work. 

Those of us who need that money, and still find it hard or impossible to go out and drive and deliver, see things quite differently. But even though the $400 is less than we had before, it’s still $200 more per week than the Republican legislators wanted us to have.

The other provision in the order is that the federal government will only pay 75 percent of the $400. The rest, the president says, will be covered by “unspent” money that was already allocated to the states through previous legislation.

With a reduced rate and questions about whether states are going to be content (or financially able) to pay 25 percent of the supplemental pay for their unemployed workers, there could be controversy, maybe even lawsuits, that ultimately alter the effects of this executive order. For now, though, it’s what we have.

The president signed three other orders on the same day, which covered:

  • A deferral on payroll taxes
  • A moratorium on evictions
  • Student loan payment deferments and interest rate change to 0 percent through December 2020

What we didn’t get… yet

Those of us who still haven’t been able to return to driving, as well as those who have, might be wondering… did the President also authorize a second round of those nice, useful stimulus checks? The answer is no. There was no mention of the stimulus check outside of the political discussion that preceded the signing.

From what he has said, it seems like the president would support a second round of stimulus checks, but there was no executive order issued. “Why?” you might ask.

Because executive orders, despite their reputation for being powerful and broad in scope, do have limits. Congress, in particular the House of Representatives, holds the “power of the purse,” meaning that only Congress has the ability to tax and spend public money on behalf of the federal government. 

Stimulus checks, therefore, must be authorized by Congress. So… in regard to the stimulus issue, it’s back to the drawing board with the stormy negotiations.

When will money begin flowing again?

When President Trump was asked this question in an interview, his only answer was that he wants the money “to get there quickly and in a non complicated fashion.”

As vague as that answer may sound, no one, even the president, can say for sure how long it’s going to take for money to begin flowing again. It’s reasonable to expect some delays, which will probably vary from state to state. The fact that the PUA subsidy was allowed to expire before the executive order was signed will likely cause a delay in processing the extra unemployment payments.

Now that states will have to pay $100 of the $400 weekly supplement, some accounting and adjustments to computer systems will invariably be necessary. Millions of drivers who had to wait for states to get up to speed with the PUA, and to set up systems to process payments, are painfully familiar with this particular drill.

Hopefully, we’ll find out soon when money will be available. And when we at Gridwise hear the latest news, we’ll pass it along to you without delay. 

What could happen if Congress (or someone else) objects to these orders?

The political climate around executive orders is rarely cool and breezy. But during an election year, and in an era when politicians are worlds apart on so many levels, the sky will be on fire. No one can say whether Congress will go along with the principle of the unemployment subsidy executive order, and work out some compromise on other elements of COVID-19 pandemic aid. 

Those who remain opposed to the executive orders could take their objections to court or pass legislation that strikes them down. We can speculate about that, but it would be useless. It’s impossible to know what could happen in the current political environment. 

If a lawsuit is filed, a judge could put a stay on the order, making it impossible for the money to be sent through until the case was decided. If a law is passed to knock down the order, it would be wise for the authors of such legislation to have even more money allocated for enhanced unemployment payments. People are not going to be happy if the supplemental payments are offered… and then rescinded, over political infighting.

How drivers can do their part

It’s hard to avoid becoming frustrated over this situation. While it’s good that drivers who need the money will get some payment, knowing that it’s still not a sure thing is unsettling. Also, the reduction from $600 to $400 stings.

As good citizens, we all know we’re supposed to do our part to ensure that our government puts us first when it comes to why, when, and how they enact the laws we must live by.

If you want to do your part, the best thing you can do is participate in the process of government. That means attending local meetings when an issue that affects you is being discussed, voting (of course), and letting your representatives in Congress and the Executive Branch know what you think, and what you want them to do.

Here is where you can find contact information for your congressional representatives (House and Senate).

Here is how you can contact the President and White House staff members.

You might be surprised to find that, especially in an election year, hearing loud (yet courteous) voices has a way of getting politicians to move in the desired direction. 

Remember to check in with Gridwise

We’re on top of all the news that affects rideshare and delivery drivers, so visit our blog often, and tune into the Gridwise YouTube channel for the latest. And, if you’re already back out there working at your driving and delivery gig, you know how crucial Gridwise’s powerful features are when you want to  maximize your income.

Track mileage, calculate earnings, use multiple apps, get airport event info, and simplify your driving life.  Say what? You don’t have the Gridwise app?? Well, download it now!

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