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BPAA Federal Policy Update - June 4, 2021

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Latest on Small Business Funding

 

  • Some status updates on SBA economic aid:
    • PPP: Administrator Casillas Guzman issued a statement, the PPP now being officially closed.
      • Forgiveness: Approximately 63% of the PPP loans have completed the forgiveness process totaling approximately 54% of the total 2020 PPP loan volume. Across all loan sizes, over 99% of loan value has been forgiven on loans that have completed the forgiveness process.
      • State data: PPP weekly report (last updated May 31), COVID relief report (includes PPP & EIDL info; last updated May 24). As of the May 31, 2021, report following are the PPP totals for the Great Lakes region and respective states within:
    • Restaurant Revitalization Fund: As of 8 p.m. ET, Monday, May 24, the portal for the $28.6 billion Restaurant Revitalization Fund authorized by the American Rescue Plan Act closed. Overall, per the SBA Administrator’s testimony last week in Congress, the SBA received more than 372,000 applications totaling more than $76 billion in funds.
      • For the first 21 days the program was open, the SBA prioritized funding applications from small businesses owned and controlled by women, veterans, and socially and economically disadvantaged individuals.
      • The SBA has gotten relief into the hands of more than 63,000 food and beverage businesses owned by women, veterans, and socially and economically disadvantaged business owners. Over $15.5 billion are being distributed in the coming weeks.

 

  • The House Committee on Small Business held a hearing on May 27 called “An Examination of the SBA’s COVID-19 Programs.” The focus of this hearing centered on an examination of the Small Business Administration’s COVID-19 programs and the need for funds to be replenished to ensure businesses receive much needed relief.
    • There was a specific focus on the Paycheck Protection Program (PPP) and the Restaurant Revitalization Fund (RRF). Members of the committee agreed that each of these two programs needs improved efficiency, transparency, and resources to help business owners sustain through the next phase of the COVID-19 pandemic.
    • The witness, SBA Administrator Isabella Casillas Guzman, emphasized the need for continued collaboration between individual congressional offices and Congress as a whole, referenced new initiatives that will help the SBA reach more communities, and reiterated the SBA’s commitment to ensuring that businesses get relief.
    • Representative Troy Carter (D-LA-02) spoke about the fact that small businesses are facing issues accessing PPP resources rapidly compared to larger companies. Small businesses have smaller staffs which means fewer individuals who can dedicate adequate time to completing the necessary PPP documents in a rapid manner compared to larger companies who have entire teams working on PPP. He sought more information and clarification from the administrator on what plans SBA has to ensure small businesses get PPP funds rapidly and efficiently.
      • SBA Administration Guzman referenced the Community Navigators Program as an initiative that is forming to help reach small business more efficiently and to connect with more diverse business owners. She said the SBA is working to improve the RRF through simplifying the application process. The RRF is also using partners and technology alongside refined outreach initiatives to reach more diverse business owners  
    • Representative Angie Craig (D-MN-02) explained that some businesses are getting the recourses from the RRF while others are not and that the RRF simply does not have enough money to fulfill the needs of small business owners. She said there have been 362,000 + applications with $75 billion worth of resources request but only 28.6 billion is available to disperse to business owners. She pushed House leaders to replenish the fund to support more small businesses.
      • SBA Administration Guzman referenced the Community Navigators Program as an initiative that is forming to help reach small business more efficiently. SBA Administrator Guzman: Significant needs will go unmet at current funding levels $9.5 billion of the $28.6 billion allocated for the RRF has been set aside for smaller entities.

 

  • Missed Your Chance at A Restaurant Revitalization Fund Grant? Don’t Be So Sure Restaurants requesting aid from the $28.6 billion Restaurant Revitalization Fund may not be out of luck if the money runs out before their application is considered, a federal official revealed Wednesday. Testifying before a Senate committee, Small Business Administration (SBA) chief Isabel Guzman assured lawmakers that the applications in limbo would automatically be put in a queue for consideration of a grant if Congress re-ups the fund.
    • “If we received more funding we would be able to leverage those applicants so that we could speedily get these funds out to those who applied,” Guzman said in reply to a pointed question from Sen. Maria Cantwell, D-Wash. The SBA is the government agency administrating the fund.
    • The need to replenish the restaurant aid fund was addressed several times during the hearings by the Committee on Small Business and Entrepreneurship, along with positive assessments of the feasibility.
    • “We need to work on that,” said the committee’s chairman, Sen. Ben Cardin, D-Md. “We know we need additional funds for this program. He expressed optimism that a bipartisan agreement could be reached to allocate additional funds. Cardin noted that the Restaurant Revitalization Fund, or RRF, was itself a bipartisan creation.
    • Guzman left little doubt that the RRF will quickly be depleted. Her agency fielded requests for $76 billion in grants before the application process was ended May 24 because the demand so greatly exceeded the amount of money that was still available. 
    • Cardin recalled that early drafts of the legislative provisions creating the RRF had called for $100 billion in funding. “You’re not far off from that original estimate,” he said in an aside to Guzman. Read more at Restaurant Business Online.

 

  • Applications for a restaurant grant fund far exceed the money available. Many applicants to the government’s pandemic relief program for restaurants, bars, caterers and other food businesses will be left empty-handed unless Congress provides more money for the $28.6 billion grant program, the head of the Small Business Administration said on Wednesday.
    • The agency’s Restaurant Revitalization Fund received more than 372,000 applications, seeking $76 billion — far more than the fund has available, the administrator, Isabella Casillas Guzman, said at a House Small Business Committee oversight hearing.
    • “There will be significant demand unmet at the close of this program,” Ms. Guzman said. The agency stopped accepting applications for the grants on Monday. Congress created the restaurant fund in March and ordered the agency to prioritize applications from women and veterans, as well as minority business owners who meet certain income and asset limits. More than 208,000 applications met those requirements and will be funded first, Ms. Guzman said. Read more here at NYT.

 

  • Paycheck Protection Program Closes to New Applications The federal government’s Paycheck Protection Program closed to new applications Friday as funding was on track to be exhausted. That marked the end of a $961 billion emergency effort that helped millions of small businesses survive the pandemic but was dogged by fraud claims and criticism that it didn’t reach the neediest businesses.
    • The program had been scheduled to end on May 31, but the Small Business Administration on Friday said in a notice to lenders that “due to the high volume of originations today, the portal will be closing for new originations” that evening.
    • Created by the $2 trillion Cares Act that became law in March 2020, the PPP offered coronavirus aid in the form of loans that could be forgiven provided recipients used the funds to retain workers and on other allowable expenses.
    • The SBA as of May 23 had approved 11.6 million PPP loans totaling roughly $796 billion across the program’s first round, from April to August last year, and its second round, which began in January. Banks and other lenders issued the loans, which the SBA guaranteed. Read more at the Wall Street Journal.

 

Unemployment & Labor

 

  • From POLITICO’s Morning Shift on Unemployment Insurance: 'WHATEVER IT TAKES': Senate Finance Chair Ron Wyden (D-Ore.) is vowing to make sure that workers in GOP-controlled states continue receiving federally supplemented unemployment insurance — even if that means changing the law, he told Shift.
    • Of course, there is the small matter of having to get a legal change through Congress. But Wyden’s comments to your host underline how some two dozen governors’ refusal to distribute extra benefits — including an extra $300 a week for workers, payments to gig workers, and extended state benefits — to unemployed residents has touched a nerve among Democrats. “I’m going to do whatever it takes to make sure that people are not going to be forced into destitution,” he said.
    • Senate Democrats are “talking to [the Labor Department] constantly” to determine next steps, he added. “We originally thought they had the authority to make sure that the people would get their benefits. Now, they say they don't. If it takes changing the law, I'll change the law.
    • Though the agency had initially planned to release a formal decision on just what authority it has to force states to pay out UI benefits, an official later told your host it would not. Instead, staffers have been reaching out to lawmakers and advocates to decide how to proceed.
    • “We're going to be ready for both options,” Wyden said. “We're going to be ready, if [DOL says it does] have legal authority, to find ways to strengthen it, and then make sure that Republican governors can’t unravel it, because I suspect they probably will. And if they don't have the legal authority, we will act legislatively.”
    • “I’m going to let the lawyers keep going at it,” he added. “But my guess is, it will need strengthening, and it may take legislation and I'm committed.”

 

  • U.S. weekly jobless claims below 400,000; companies boost hiring in May The number of Americans filing new claims for unemployment benefits dropped below 400,000 last week for the first time since the COVID-19 pandemic started more than a year ago, pointing to strengthening labor market conditions.
    • That was underscored by other data on Thursday showing private payrolls increasing by the most in 11 months in May, spurred by robust demand amid a rapidly reopening economy. The data supported expectations that job growth accelerated last month, though shortages of workers and raw materials continue to loom over the labor market recovery. Read more here at Reuters.

 

  • Biden to Revive OSHA’s Stalled Infectious Disease Rulemaking (Bloomberg Government) – The Biden administration plans to revive a stalled occupational safety rulemaking that would protect workers against all airborne infectious diseases, not just Covid-19, raising the question of whether it will be developed in lieu of an emergency standard specific to the coronavirus. The Occupational Safety and Health Administration intends to offer a draft version of an infectious disease rule in fiscal year 2022 and seek public comment, according to an OSHA spending proposal released alongside the White House’s fiscal 2022 budget request last week. That means a proposal could be released as soon as October, when fiscal 2022 begins.
    • If enacted, the rule could require employers to protect workers from hazards such as tuberculosis, drug-resistant staph bacterial infections, and severe acute viral respiratory infections, according to OSHA’s summary of the rulemaking (RIN:1218-AC46)
    • The announcement comes as OSHA’s long-delayed Covid-19 emergency temporary standard—now in its sixth week of review by the White House’s Office of Information and Regulatory Affairs—faces increasing pushback from Republicans and other critics, who contend the widespread availability of vaccines has made a virus rule unnecessary. Still, worker advocates maintain the measures aren’t mutually exclusive.

 

Tax and Budget

 

  • Biden’s budget has a $6 trillion price tag President Joe Biden has released a $6 trillion budget request that stitches his most ambitious spending plans into one massive proposal, pitching historic investments in highways, child care and climate change. Assuming a federal budget gap of more than $1 trillion for the next decade, the long-delayed document focuses on lifting the middle class, expanding the social safety net and boosting American competitiveness across the globe. It combines Biden’s $2.3 trillion infrastructure plan, his $1.8 trillion families proposal and $1.5 trillion in discretionary spending to fund federal agencies for the upcoming fiscal year.
    • For now, Senate Democrats and the White House are still negotiating with Republicans on an infrastructure deal, with the goal of moving a bill in July — with or without GOP support.
    • Biden administration officials stressed on Friday that the president’s infrastructure and jobs plans would be paid for within 15 years through tax increases, rather than the traditional 10-year budget window. The president’s plans would also continue cutting the deficit after a decade, officials noted.
    • Democrats have been waiting for Biden’s fuller request to start drafting a budget resolution, a fiscal road map that sets overall funding levels for next fiscal year. House Budget Chair John Yarmuth (D-Ky.) predicts the resolution is unlikely to survive committee, however, since Democrats are split over thorny issues like military funding.
    • Here is the link to the Biden-Harris Administration’s FY 2022 Budget:  https://www.whitehouse.gov/wp-content/uploads/2021/05/budget_fy22.pdf. (The PDF copy is also attached.)
    • Here is the fact sheet:  https://www.whitehouse.gov/wp-content/uploads/2021/05/FINAL-FY22-Budget-Overview-Fact-Sheet.pdf

 

  • Parliamentarian: Democrats Only Get One More Chance To Sidestep GOP This Year Senate Parliamentarian Elizabeth MacDonough has effectively ruled that only one more automatic budget reconciliation is permissible this year, dealing a blow to Democrats who previously thought they would have two more chances to sidestep Republicans in advancing President Biden's agenda. MacDonough ruled that a revision to the 2021 budget resolution cannot be automatically discharged from the Senate Budget Committee, meaning Democrats would need at least one Republican on the 11-11 panel to vote with them. The bombshell ruling effectively means Senate Majority Leader Charles Schumer (D-N.Y.) will be able to use only one more reconciliation vehicle to pass Biden's key legislative priorities this year. He will not be able to divide up the $2.3 trillion American Jobs Plan and the $1.8 trillion American Families Plan, as well as Biden's calls to expand Medicare and lower the price of prescription drugs, into multiple reconciliation packages, as was envisioned only a few weeks ago. Read More at The Hill

 

  • Biden Tax Plan Forecast to Bring in $3.6 Trillion in Decade President Joe Biden’s proposed tax hikes are forecast to bring in $3.6 trillion over the next decade, the Treasury Department said Friday, a key funding source for the $4 trillion he hopes to spend remaking the American economy and social safety net. The figure, representing the sum of all tax increases if enacted by Congress, came as is part of the “Greenbook” report that accompanies the White House’s $6 trillion 2022 budget request, also released on Friday. It effectively serves as the revenue side of the ledger, against Biden’s spending priorities in the budget. Read More at Bloomberg

 

  • Biden proposes 15% corporate minimum tax, $1 trillion new infrastructure spending U.S. President Joe Biden offered to scrap his proposed corporate tax hike during negotiations with Republicans, two sources familiar with the matter said on Thursday, in what would be a major concession by the Democratic president as he works to hammer out an infrastructure deal.
    • Biden offered to drop plans to hike corporate tax rates as high as 28%, and instead set a minimum tax rate that companies should pay instead at 15%, sources said. Biden's new proposal, worth $1.7 trillion, would allow some $75 billion in unspent COVID-19 relief funds to be repurposed for the bill, one source said.
    • It assumes that increased tax revenues from stepped-up enforcement would raise $700 billion over a decade, drops subsidies on fossil fuels to raise additional funds, and would impose a new vehicle-miles-traveled fee on commercial trucks. Read more at Reuters.
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