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Federal Market Intelligence for Small Business |
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Congress acts on medical/economic aidTwo COVID-19 emergency bills cover tests, paid leave; Rubio, Cardin seeking $350 billion for small business loans, grants relief to include in $2 trillion stimulus billThe last two weeks have seen a whirlwind of activity in Washington, DC as the nation prepares for an anticipated surge in coronavirus (COVID-19) infections, a huge strain on health care workers and facilities and diminished economic activity due to needed containment measures. To date, Congress has passed two coronavirus-related bills--including loans and paid-leave provisions affecting small businesses-- and is negotiating a third bill for economic relief with the White House. The Small Business Administration is making available disaster loans in declared states. Congressional emergency bill Congress on March 4 approved HR 6074, which is an $8.3 billion emergency appropriations bill for prevention, preparation and response efforts against the virus, as well as loan subsidies for small businesses affected by the pandemic. It included roughly $3 billion for vaccines and treatments; $2.2 billion for the Centers for Disease Control and Prevention to support lab testing and infection control; and nearly $1 billion for medical supplies. It also had $1 billion to the Small Business Administration to support $7 billion in low-interest loans for companies affected by the outbreak. Families First legislation On March 18, a second coronavirus-related bill--HR 6201, the “Families First Coronavirus Response Act,” put together by Democratic House Speaker Nancy Pelosi, D-CA, and Treasury Secretary Steve Mnuchin was approved by Congress and signed by the president. The cost of the legislation has not yet been estimated by the Congressional Budget Office, but the Joint Committee on Taxation estimated the cost at $100 billion. “Family First” small business reimbursements for paid leave The Families First package includes reimbursements to small firms for paid sick leave for up to two weeks if an employee needs to take time off for coronavirus-related reasons. It applies to firms with up to 500 employees, although some companies with fewer than 50 employees may be exempted on a case-by-case basis. The Labor Dept. expects to issue guidance by April 2 on details of the paid leave. See more details here. The legislation also includes free coronavirus testing, including for the uninsured, increased federal funding for Medicaid and food stamps, and increased unemployment insurance benefits. Coronavirus economic relief bill III Congressional and White House officials scrambled to assemble a $1.8 trillion stimulus package, but it failed to gain Senate approval. The GOP Senate plan involved $500 billion in bailout funds primarily for corporations to be distributed by Treasury Secretary Steve Mnuchin. Democrats were seeking to ensure those funds did not go to stock buy-backs to enrich shareholders, as happened with many of the gains in profits after Republicans passed the 2017 corporate tax cuts. The Democrats are seeking greater controls on those as well as a larger proportion for unemployment insurance. Negotiations were still ongoing at presstime. Small business relief The senior Republican and Democratic senators on the Senate Small Business and Entrepreneurship Committee each introduced separate plans for approximately $350 billion in small business aid to be included in the third stimulus plan. As of presstime, Sens. Marco Rubio, R-FL, committee chair and Ben Cardin, D-MD, senior Democrat on the committee reportedly were working together on the small business provisions in the upcoming stimulus package. These included an idea promoted by Rubio to turn SBA loan programs into essentially a grant program for eligible small companies who maintain their payroll during the emergency. The money would go out as a small business loan, but would be forgiven if the employer maintained the payroll. Negotiations on the small business package were ongoing at presstime. Earlier, Rubio and Sen. Susan Collins, R-ME, introduced their bill on March 19. It also included expansion of allowable uses for 7(a) loans, $240 million for SBA Small Business Development Centers and Women’s Business Centers and $10 million for Minority Business Development Centers for COVID-19 related business counseling. Cardin and Sen. Ron Wyden, D-OR, submitted legislation on March 20 as part of the proposed $350 billion package for small businesses. It included checks up to $75,000 for qualifying small businesses with 50 or fewer employees; a 50% tax credit for wages paid to employees during the COVID-19 emergency and for any business that has experienced a 25% drop in gross receipts; and deferment of all 2020 estimated tax payments.
More information:
Rubio bill: https://bit.ly/2QDtbdu
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