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U.S. Senate Takes Recess Until September; No Agreement on Coronavirus Relief Funding


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Economic relief legislation, the fifth proposal since the start of the COVID-19 pandemic, is on hold after Senate announces August break.

8/13/2020 14:30

Negotiations on economic relief in the U.S. Senate continued this week with no progress, and now senators are on recess until September. The U.S. House of Representatives is already on recess and is expected to return Sept. 14, The Hill reports.

The negotiations on the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act and Health, Economic Assistance, Liability Protection and Schools (HEALS) Act continued after President Donald Trump announced four executive orders or moratoriums to provide economic relief during an Aug. 8 press conference.

House Speaker Nancy Pelosi, D-Calif., Senate Minority Leader Charles Schumer, D-N.Y., White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin failed to come to an agreement by the Aug. 7 deadline, prompting discussions to continue, ACA International previously reported.

The Senate will formally continue its legislative session on Sept. 8 unless given notice that votes are scheduled on the economic relief bill, according to The Hill.

Senate and House members debated the funding amounts of their respective bills, according to the article.

There is also some debate on the legal standing of the president’s executive actions, The Hill reports.

Under the president’s moratorium on continued student loan payment relief during the COVID-19 pandemic, the suspension of student loan payments as well as a 0% interest rate for loans will continue until Dec. 31, 2020. Student loan payment relief started in March under an order from the White House and it was first extended in the Coronavirus Aid, Relief, and Economic Security (CARES) Act through Sept. 30, 2020.

Some borrowers are continuing to make payments on their loans and have that option.

The president also issued a moratorium on deferring payroll tax obligations.

The Secretary of the Treasury is directed to defer the withholding, deposit, and payment of taxes on wages or compensation, as applicable, paid during the period of Sept. 1, 2020, through Dec. 31, 2020, subject to the following conditions:

  • The deferral shall be made available with respect to any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods.
  •  Amounts deferred pursuant to the implementation of this memorandum shall be deferred without any penalties, interest, additional amount, or addition to the tax.
  • The Secretary of the Treasury shall issue guidance to implement this memorandum.
  • The Secretary of the Treasury shall explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.

The deferral will be retroactive to July 1, and it may be extended at the end of the year, Trump said during the press conference.

The president also extended the moratorium on evictions and unemployment insurance.

The additional unemployment insurance will be allocated through remaining dollars in the Coronavirus Relief Fund (CRF) approved as part of the CARES Act.

According to the memorandum to extend unemployment insurance, more than $80 billion in CRF dollars remain available to supplement the billions of dollars states have received in other federal assistance. In addition, the Department of Homeland Security’s Disaster Relief Fund (DRF) has more than $70 billion in emergency assistance funding available.

The Federal Emergency Management Agency (FEMA) will assist in providing up to $44 billion in benefits from the DRF and states are called upon to use their CRF allocation. At least $25 billion of total DRF balances will be set aside to support ongoing disaster response and recovery efforts and potential 2020 major disaster costs.

Legislative Update

The Senate GOP issued its economic relief proposal in response to the COVID-19 pandemic, the HEALS Act, in July, ACA International previously reported.

Funding for the bill is $1 trillion, including another round of stimulus payments, similar to those from the CARES Act.

Most of the harmful sections in the U.S. House of Representatives’ HEROES Act concerning debt collection were not included in this first draft of the HEALS Act from the Senate, an effort ACA International has focused its advocacy on. ACA has been educating Congress about why many of the attempts to limit collection activities in the HEROES Act are misguided and appreciates that this was recognized by the Senate.

ACA has also been working closely with Senate staff to educate them that the debt collection industry is not actively targeting stimulus checks. The press surrounding this issue continues to conflate legal terms such as bank levies versus wage garnishments. There is also a section in the HEALS Act that could have some impact on student loan collections.

The HEALS Act would place parameters around the ability of banks to garnish those stimulus payments.

Read ACA International's summary comparing the HEALS Act and the HEROES Act here, as well as a summary of the White House executive orders here.

Related Content from ACA International:

ACA Advocacy: Comparing Senate and House Economic Relief Proposals

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