COVID-19 & SMALL BUSINESS UPDATE
- $2 Trillion In Bipartisan Deal Passes House; A Little Controversy Brings Many House Members Back To Town: The $2.2 trillion Phase 3 Stimulus bill finally passed the House and is being sent to the President. The 880-page measure is the largest economic relief bill in U.S. history, The bill builds upon earlier versions of the CARES Act and is intended to be a third round of federal government support in the wake of the coronavirus public health crisis and associated economic fallout, succeeding the $8.3 billion in public health support passed two weeks ago and the Family First Coronavirus Response ACT. It is the product of negotiations between Democrats and Republicans for a bipartisan response to the crisis.
- The House adjourned until next Tuesday, March 31st. Schedule still remains fluid but they will begin working on the framework for Phase 4. The Senate is in recess until April 20th.
- Next Steps
- Congress is expected to convene after Easter to consider a Coronavirus Phase IV bill. Senate Appropriations Chairman Richard Shelby (R-Ala.) said several times he wants a major infrastructure package. And a fourth bill could tie up loose ends if any lawmakers are unhappy with the details of the “phase three” package, Sen. Roy Blunt (R-Mo.) said on the floor yesterday. "I’d say the minute we’re done with phase three, we’ll start talking about phase four because all of us know that phase three can’t have included everything that needs to be included,” Blunt said. Negotiators should keep in mind that they’ll have another major piece of legislation that could include their ideas, and that this “moment is more important than everybody winning everything they’d like to win,” Blunt added. White House Legislative Director Eric Ueland agreed that another piece of legislation will likely be needed, and said negotiators would decided its content after they “see what is helping, what’s working, what needs to be facilitated and expanded, what needs to be redirected.”
- Speaker Nancy Pelosi shifted her tone on Friday, calling for a much more focused “Phase 4” relief package to address immediate needs related to the coronavirus pandemic, a departure from the sprawling legislation she and other top Democrats were pushing earlier this week. Both in a television appearance and talking with reporters Friday, Pelosi said it's clear the next tranche of relief funds should be an expansion of the massive $2 trillion package the president signed into law last week — more money to aid states, cities and small businesses, expand unemployment benefits and another round of direct cash payments for Americans. “Let’s do the same bill we just did, make some changes to make it current,” Pelosi told reporters in the Capitol Friday. “While I'm very much in favor of doing some things we need to do to meet the needs — clean water, more broadband, the rest of that — that may have to be for a bill beyond that right now,” she added during an appearance on CNBC.
RESOURCES AND GUIDANCE
- The Department of the Treasury and Small Business Administration issued guidance for the Paycheck Protection Program. The guidance can be found here:
- Assistance for American Workers and Families
- In the weeks immediately after the passage of the CARES Act, Americans will see fast and direct relief in the form of Economic Impact Payments. For more information, CLICK HERE.
- Assistance for Small Businesses
- The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses. Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.
- Paycheck Protection Program Resources
- SBA Paycheck Protection Program website
- Department of the Treasury CARES Act website
- Resources for Businesses:
LABOR & MINIMUM WAGE UPDATE
- DOL Lays Out Paid Leave Regulations: DOL on Wednesday released a final rule enacting temporary paid leave requirements for businesses with fewer than 500 employees, POLITICO's Ian Kullgren reports. Nearly 40 percent of the U.S. workforce may be eligible for paid coronavirus leave under Congress' " phase two" emergency assistance package, according to DOL. Covered employers must give workers who are quarantined or experiencing Covid-19 symptoms two weeks' paid sick leave, and an additional ten weeks' leave to workers who are caring for children stuck at home.
- DOL Releases New UI Guidance: The Labor Department late Thursday announced new guidance to aid states in implementing the expanded unemployment insurance benefits and new benefits for gig workers provided in the latest coronavirus relief package. The "phase three" package extends unemployment insurance benefits to people who have not been traditionally eligible, such as gig workers and independent contractors. It will also offer out-of-work Americans an additional $600 per week on top of their weekly jobless benefits through July 31. "While the federal government will pay 100 percent of those benefits, and they'll pay 100 percent of the admin cost, the states have to stand that up," a congressional Democratic aide familiar with the package told Morning Shift. "They have to program the computers and they have to figure out what documentation of people's past wages they want."
- Bloomberg Government - Jobless Claims Rocket to Unthinkable 9.96 Million: The number of Americans applying for unemployment benefits has surged for a second straight week and reached around 10 million over the past two weeks, highlighting the devastating economic impact of the coronavirus outbreak as shutdowns widened across the country. A record 6.65 million Americans filed jobless claims in the week ending March 28, according to Labor Department figures released today, as restaurants and stores were forced to close across the nation to mitigate the pandemic. The pri or week’s level was also revised up slightly to 3.31 million.
- Claims are likely to stay elevated as more states announce stay-at-home orders, and it would be “not unthinkable” to see a 20% unemployment rate, more than double the record high that followed the last recession, said Thomas Costerg of Pictet Wealth Management. “I never thought I’d see such a print in my lifetime,” Costerg said.
- The coronavirus is set to overwhelm the precarious finances of America’s middle class, a group that’s seen its share of the national wealth steadily decline since the 2008 financial crisis. Economic activity has collapsed, as Americans stop traveling and shopping, business revenues plummet and millions are thrown out of work. The U.S.’s middle-income group is likely unprepared for such shocks, according to the latest update of household-finance data from the Federal Reserve.
- In addition, some 3.5 million workers probably lost their employer-provided health insurance policies in the last two weeks, according to research by the Economic Policy Institute. The “very rough estimate” is based upon industry-specific unemployment claims filed in Washington state, which had the first outbreak in the country.The 3.5 million doesn’t include spouses or children of the newly unemployed who may now be without coverage as well. Read the EPI’s study here.
- Still, Vice President Mike Pence said the U.S. economy will strongly rebound from mounting unemployment. “We’ll get through this,” Pence said today in an interview with Bloomberg Television. “Our priority is health. Our priority is the health and well-being and lives of the American people.” Pence said a spike in unemployment is temporary. “The president has every confidence, as we help people through this time, the economy will come back stronger than ever before,” he said.
TAX & SMALL BUSINESS NEWS
- Bloomberg Government - Small Business Loan Program To Start Today: Starting today, small businesses can apply for the nearly $350 billion in loans available through the economic rescue plan from Congress. The loan program, known as the Paycheck Protection Program, is intended to support businesses so they can ride out the tough economic times and, most importantly, assist with either keeping current workers or rehire those who were laid off. It's sorely needed salve for all sorts of small establishments nationwide. Half of small businesses have less than 27 days' worth of financial cushion, according to one 2016 report, and many have already suffered weeks of low or no income.
- The Paycheck Protection Program, created by the $2 trillion coronavirus stimulus bill signed by President Donald Trump last week, offers government-backed loans to small businesses that can be forgiven if businesses keep employees on their payroll, he explains. But major U.S. banks on Thursday expect millions of applications from struggling small businesses and complain of incomplete guidelines and onerous loan verification requirements, among other issues.
- The administration has announced it will adjust the terms of the loans to make them more palatable for banks and streamline borrower verification requirements, but it it's unclear if the last-minute changes Thursday night will be enough to avert chaos today. "While banks believed the changes revealed Thursday would help them move more quickly," Zachary writes, "they tried to tamp down expectations."
- Read more at NPR: click here.
- Bloomberg Government - Wells Fargo, Other Lenders Miss Debut of Rescue for Small Firms: Small businesses had mixed results Friday trying to apply for loans on the first day of an unprecedented federal relief program, with some banks including Wells Fargo & Co. saying they weren’t ready as lenders across the country grappled with lack of detailed guidelines from the government. JMorgan Chase & Co. started taking applications Friday afternoon after warning clients Thursday night it was still awaiting guidance and may not be ready the following day. Bank of America Corp. is accepting applications online but only from clients “with a business lending and a business deposit relationship” at the bank. Friday was the first day that U.S. small businesses hit by the fallout from the coronavirus pandemic could start applying for loans under a $349 billion program included in a $2 trillion stimulus package aimed at shoring up an economy. U.S. Treasury Secretary Steven Mnuchin tweeted early Friday that large banks were “expected to go live soon this morning” and that he received his first report that community banks had started processing loans. As of 11 a.m. New York time, 1,926 loans were originated totaling almost $757 million from 245 lenders, including Bank of America and community banks, according to a person familiar with matter.
- Politico -- Treasury, IRS Issue Guidelines On Tax Credits For Paid Leave The Treasury Department and IRS today provided more guidance to employers about federal reimbursements for paying employees for sick and family leave during the coronavirus emergency. The IRS website posted an explanation of the refundable tax credits available to small and midsize businesses that are required to provide the leave under a coronavirus-response package signed into law last month. The page also includes a long list of answers to anticipated questions. The legislation requires businesses with fewer than 500 employees to provide up to two weeks of sick leave and up to 10 additional weeks of family leave for reasons related to the coronavirus. Employers will get a payroll tax credit on qualified wages up to $511 per day for each employee who takes sick leave to self-quarantine or get a diagnosis. They would get a credit of up to $200 a day for workers caring for children or other family members who have been affected by the outbreak.
- U.S. Chamber Seeks One-Year Delay For Companies To Pay Taxes U.S. Chamber of Commerce is asking the IRS to delay the deadline for businesses to file and pay taxes for a full year, until April 15, 2021. IRS has already extended the deadline to July 15 amid concerns that the spreading coronavirus pandemic would make it logistically and financially difficult for companies to file and pay by the April 15 deadline this year. Group asked IRS in a letter to extend the deadline to Oct. 15 at a minimum. Business lobby also asks for more deadline relief for fiscal year taxpayers and for a deadline extension to request refunds.