In the wake of statistics that show one in four small businesses have already shut down and more than 40 percent of all small businesses in the United States are expected to close permanently in the next six months, the U.S. Senate has unanimously passed a bipartisan coronavirus relief package.
The package pumps $310 billion into the Paycheck Protection Program, including $60 billion for women-owned businesses, minority-owned businesses and businesses in rural areas. The bill also includes $60 billion for economic injury disaster loans, $75 billion for health-care providers and $25 billion for testing.
The legislation also includes funding to help modernize and strengthen public health data infrastructure, which Virginia Sen. Tim Kaine has long championed.
Kaine and fellow Virginia senator Mark R. Warner released a statement after the bill’s passage that said, “This legislation will provide urgently needed funding to small businesses so they can keep their workers on the payroll and to our health care providers on the front lines of this pandemic. And it will help ramp up testing capacity, which will be critical to reopening our economy.
“Today’s legislation also ensures more resources get delivered to underserved populations, our community development financial institutions, and businesses that are truly small. As we hear every day from Virginians, this massive public health emergency is having devastating health and economic impacts. We’ll continue supporting efforts to provide financial relief and to ensure we’re getting the public health response right.”
Warner had joined with other senators last week in releasing a proposal to provide more assistance for small businesses, including a paycheck security program that would cover the wages and benefits of employees of affected businesses and non-profits until the economic and public health crisis is resolved.
At the time Warner floated his proposal, he said in a prepared statement, “The health and economic crisis brought on by COVID-19 is unprecedented in American history. More than 22 million people have already filed unemployment claims, and projections suggest that the unemployment rate could top that of the Great Depression by this summer if Congress does not do more to help businesses and workers stay afloat.
“While Congress quickly took some steps with the Paycheck Protection Program and expanding access to disaster relief loans, these early lifelines will not be enough on their own to prevent more job losses and alleviate the economic uncertainty. It will be much less costly to our economy and our country in the long run if we can offer direct grants to businesses facing heavy losses so that they can keep workers on payroll and benefits through the next several months of this crisis,” the senator said.
“Otherwise, we could see millions more businesses go bankrupt, leaving millions more Americans out of work, and making it that much harder to get our economy going again once we get through this public health emergency.”
Under the terms of the senators’ paycheck security proposal: 1) All employers who have suffered a month-over-month drop in revenues of at least 20 percent will be eligible to receive grants covering a portion of payroll and benefits for at least the next six months. 2) Grants will cover salaries and wages up to $90,000 for each furloughed or laid off employee, plus benefits, as well as up to an additional 20 percent of revenues to cover fixed operating costs such as rent, utilities, insurance policies, and maintenance. 3) Employers and non-profits of all sizes will be eligible if they can verify revenue losses and don’t otherwise have more than 18 months of their payroll available in cash. 4) Businesses that have received a Paycheck Protection Program loan or an Economic Injury Disaster Loan, or have otherwise accessed the Federal Reserve 13(3) facilities, will be ineligible unless they exhaust these other programs or use the Payroll Security Program grant to pay back their existing loans.
“We are headed toward catastrophic levels of unemployment — 20% or higher — and we must act to ensure that millions more workers are paid for as long as this crisis endures by making support for employers who keep workers on payroll simpler, faster and more universal. The Paycheck Security Act does just that,” said Richard L. Trumka, President of the AFL-CIO union.
“The Paycheck Security proposal is the right solution at the right time. It supports workers, keeps businesses afloat, and plays an oversized role in saving the American economy,” said John Bridgeland, former Director of the White House Domestic Policy for George W. Bush. “These senators recognize that Congress should be supporting employment, not massive unemployment.”
