The bill introductions come as Congress and the White House are expected to negotiate a potential fourth round of stimulus next month for a U.S. economy still battered by the pandemic, with applications for unemployment benefits last week showing only gradual improvement and millions still out of work. Officials have said the next stimulus measure would include additional aid for small businesses that were left out of earlier rounds or are still trying to re-open and recover.
“Many small businesses will continue to struggle in the weeks and months to come,” said Democratic Senator Ben Cardin of Maryland, the top Democrat on the Small Business & Entrepreneurship Committee, in a statement. “Congress must once again act urgently to support our most vulnerable small businesses through this crisis, so our economy can recover as quickly as possible after the pandemic.”
Cardin and Democratic Senators Chris Coons of Delaware and Jeanne Shaheen of New Hampshire introduced the “Prioritized Paycheck Protection Program (P4) Act” that would extend the June 30 deadline to Dec. 30 or longer to apply for a forgivable PPP loan while creating a new option for a second loan for borrowers with 100 employees or fewer that have lost at least half their revenue due to the pandemic. A companion bill is also being introduced in the House.
The PPP, which offers loans of as much as $10 million that can become grants if the proceeds are spent mostly on payroll, is set to expire June 30. As of June 12, the program still had almost $130 billion in funds remaining. Any unused funds would be sent back to the Treasury unless Congress approves another use. The Democrats’ bill would use existing PPP funding to make additional targeted loans.
The Small Business Administration has already approved more than 4.6 million loans totaling more than $513 billion. But lawmakers and groups representing small businesses say firms need more help or were unable to tap relief funding, especially independent contractors, the self-employed and minority-owned and other disadvantaged businesses.
The next phase of assistance for small business is going to be very targeted, particularly at minority firms that are struggling more than white-owned businesses, Republican Senator Marco Rubio of Florida, chairman of the Small Business Committee, said in a video posted on Twitter on Tuesday.
There was a 41% decline of Black business owners from February to April, and the number of Latinx owners declined by 32% during that time compared with a 17% drop for White owners, according to a study released earlier this month by the National Bureau of Economic Research.
“These disparities can’t stand,” Rubio said. “We have to confront them because what we cannot afford as a nation, especially right now but in general, is an uneven recovery, a recovery that leaves behind people in many cases along the lines of ethnicity and race.”
The PPP has been successful but didn’t adequately meet the need of restaurants, said Republican Senator Roger Wicker of Mississippi, who’s offering a measure with Democratic Representative Earl Blumenaur of Oregon and other lawmakers. The bill, unveiled in a conference call with the Independent Restaurant Coalition, would create a $120 billion “Restaurant Revitalization Fund” in the Treasury Department to provide grants to food service or drinking establishments through Dec. 31.
Wicker said the proposal has bipartisan support that extends to the White House, and that there is a “strong likelihood” of the legislation to be part of the next phase of stimulus being considered next month.
“Saving restaurants is not only key to saving our towns but also reviving our economy,” Wicker said on the call with reporters.
The trade group for independent U.S. restaurants released a study last week saying a $120 billion industry stabilization fund could generate more than $270 billion in economic activity through savings of as much as $57 billion on government programs for the unemployed, as well as additional sales and payroll taxes, benefits in the supply chain and tourism spending.
The industry, which says it employs 11 million workers directly, has faced millions of job losses during the shutdowns, severe hits to revenue and the likelihood that occupancy restrictions will imperil firms for months more even as the economy reopens.
Restaurants are trying to make ends meet when they are only allowed to fill 25% to 50% of their seats while owing rent with invoices for food that are past due, said National Restaurant Association Executive Vice President Sean Kennedy. They’re also paying high prices for safety measures in dining rooms for workers and patrons and “wondering how they will ever find the money to pay for it all,” he said in a statement.
Treasury Secretary Steve Mnuchin said last week the U.S. needs additional fiscal stimulus even as the economy starts to rebound, and that a fourth round of fiscal stimulus should include help for restaurants and travel, retail and leisure businesses, as well as possibly more cash for American families.
Federal Reserve Chairman Jerome Powell urged Congress on Wednesday not to pull back too quickly on federal relief for households and small businesses from the pandemic.
(Updates with Wicker comments from 11th paragraph.)
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