Fighting Back: “Democrats are working to make sure that the CARES Act provides help for all businesses, not just the well-connected.”

 
 

The Weekly Democratic Party Address was delivered by Senator Ben Cardin of Maryland discussing plans to insure that under-served people and communities have access to the CARES small business loans.

(“In order for our small businesses to survive, Congress must find a way to work in a bipartisan fashion to enact solutions that serve everyone, especially those most in need due to this public health crisis we are facing.”)

Congress will have to provide additional funding in the future, there are other vital SBA relief programs that have ALREADY exhausted their funding, including the Economic Injury Disaster Loan program and the EIDL grant program.

Adding money only to the Paycheck Protection Program, as the Trump administration requested, will not help those still waiting to apply for urgently needed economic disaster loans and grants. Senate Democrats are working to add funds to those programs now, as well as the Paycheck Protection Program.

Our proposal would reserve $60 billion for financial institutions with strong relationships in under-served and rural communities, including community banks, credit unions and microlenders, to ensure that small businesses in every community have an opportunity to secure the economic relief they need.

(CSPAN link to Weekly Democratic Address: here)

Transcript: Senator Cardin Delivers Weekly Democratic Address

“I’m Ben Cardin, and I am proud to represent the State of Maryland in the United States Senate.

“Like all of you, I am practicing social distancing, so I am joining you from my home instead of a studio.

“As our nation unites to tackle the COVID-19 pandemic, social distancing is an important tool to flatten the curve of transmission and it has affected all parts of our society, especially our nation’s 30 million small businesses, which have experienced a dramatic reduction in revenues as much of our economy has come to a screeching halt.

“Democrats want to ensure that help gets to the small businesses most in need during this crisis. It’s why, as the top Democrat on the Senate Small Business Committee, I was proud to join a bipartisan Senate task force that reached an agreement on several new economic relief programs and secured $377 billion in funding for small businesses in the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act.

“One of those programs, the Paycheck Protection Program, also known as PPP, received $349 billion in funding to provide zero-fee forgivable loans to small businesses that keep their employees on the payroll for eight weeks.

“In the first days of the program, small business owners have been approved for more than $100 billion in loans, or about one-third of the funds Congress authorized so far. But I fear that when we see who eventually receives these vital loans, it may follow a very familiar pattern.

“Many banks are serving existing clients first, with some even prioritizing only those clients who have already taken out debt with that financial institution. That goes against the intent of the Paycheck Protection Program. Congress created PPP to partner with lenders around the country to quickly deploy capital to ALL small businesses, not just small businesses that have relationships with lenders.

“Underserved borrowers, including women, minorities, the military community, and those seeking small loans, have long struggled to access capital through traditional banks, leaving them with no or severely limited access to these funds.

“Without proactive and sustained outreach, and funding reserved for small loans through mission lenders and small community banks, we can expect that the underserved communities will be disproportionately harmed – just as they were during the Great Recession, when minority business enterprises suffered a precipitous decline in the proportion of SBA-backed loan approvals.

“Senate Democrats are committed to ensuring that history does not repeat itself.

“While the demand for Paycheck Protection loans is high, and there is bipartisan agreement that Congress will have to provide additional funding in the future, there are other vital SBA relief programs that have ALREADY exhausted their funding, including the Economic Injury Disaster Loan program and the EIDL grant program.

“Adding money only to the Paycheck Protection Program, as the Trump administration requested, will not help those still waiting to apply for urgently needed economic disaster loans and grants. Senate Democrats are working to add funds to those programs now, as well as the Paycheck Protection Program.

“Our proposal would reserve $60 billion for financial institutions with strong relationships in underserved and rural communities, including community banks, credit unions and microlenders, to ensure that small businesses in every community have an opportunity to secure the economic relief they need.

“The unanimous passage of the CARES Act was one of the most bipartisan moments I have been a part of since I entered the United States Senate.

“And while no one knows how long this public health crisis will last, we do know that in order for our small businesses to survive, Congress must find a way back to working in a bipartisan fashion to enact solutions that serve everyone, especially those most in need due to this public health crisis..

“Thank you. Please stay home and stay safe.”

Any bolding has been added.

~

Speaker of the House Nancy Pelosi’s weekly news conference from Thursday, conducted via telephone:

Transcript: Transcript of Pelosi Press Conference

Speaker Pelosi. Thank you. Thank you, all.

Good morning, if you’re out here. Good day, wherever you are.

In this Holy Week, Passover, approaching Easter Sunday and Ramadan, it’s an appropriate time for us to more deeply pray for those who have lost their lives and whose families are suffering and those who are sick with this virus.

It is a very, very sad time for our country, as we awaken this morning to see the totals that are there. We’re approaching 450,000 people infected. We’re approaching nearly 15,000 people who have lost their lives. That is the sad, sad part of it all. More than 17 million initial unemployment claims. Hundreds of thousands of jobs lost in the month of March and now millions more expected in coming months.

So, the assault on the lives and the livelihood of the American people is one of epic proportion and one that demands that Congress continue to take bold, urgent and effective action, bringing real, rapid relief to the health care workers, first responders and others who are suffering, to small businesses, hospitals, state and local government and the rest.

On Tuesday morning, Secretary Mnuchin called, that would be two days ago, Secretary Mnuchin called and asked for a quarter of a trillion dollars in 48 hours, with no data, just a quarter of a trillion dollars in 48 hours. This morning, Leader McConnell honored that request – I say ‘honored,’ really, dishonored the needs that we have – with a stunt on the Floor of the Senate, requesting that $250 billion, no data as to why we need it and the rest, when there are outstanding needs we should’ve been doing. And what we offered to do was to sit down and figure out what the numbers are that are needed most urgently.

And so you may have seen this morning that the stunt was performed by the Senate Leader, knowing that it would fail, and a good faith proposal to negotiate and address the immediate needs that we have, put forth by Senator Ben Cardin, the Ranking Member on the Small Business Committee, and Chris Van Hollen, proposing the Democratic – Ben objecting and saying why, and Chris Van Hollen proposing our plan.

And what our plan would have done would’ve been to give some money to the PPP. We are very proud of the CARES Act. We’re very proud of what we did to turn it from a corporate-down, trickle down plan to a workers, bubble up plan. So we want it to work. We want it to work.

An essential part of it was to honor entrepreneurship in America and recognize the role that small businesses play in the economic life of America. And we want all of them to be able to participate.

The banks are our friends in all of this. Under the plan that the Secretary proposed, that rather than waiting for the whole process of going through the SBA, that the banks would make the loans which the SBA would anoint. Further to that, the Fed has said we’ll take those loans off the books of the banks facilitating their participation.

However, with the large number of requests, the first come first served in this process, many people who do not have banking relationships were going to be last in line. And that’s why, when they asked for more money, we said, ‘Well, let’s help everybody here. Let’s help the banks do what they’re set to do. And let’s call upon some of our community development financial institutions to do what they can do to help many rural and small businesses, Indian country, women and minority owned businesses and the rest – farmers, again – to be able to have easy access to this, to the PPP.’

So if they were asking for $250 billion more, that meant the sum total of it all is $600 billion. That’s what the Leader said: ‘I just want to amend the CARES Act to say $600 billion.’ Well, we were asking for one tenth of that, $60 billion, for what we call community development financial institutions.

They are community based, like credit unions, the allocations for that, minority depository institutions, certified development corporations, microlending, which is a program of the SBA, in order to assist getting these resources to those small, small businesses that might not have, again, a relationship with one of the banks that were making these loans. It had other provisions to facilitate the work of community banks, et cetera, just to expedite the PPP.

In addition to that, in terms of small businesses – and that’s essential – we had two features that were in – one was in an earlier bill and one in CARES. In the earlier bill, we had the disaster loan program. We had a billion dollars in that, which would leverage to seven-plus billion dollars in these disaster loans. They are in great demand, to the tune of almost $300 billion of requests.

So, in our proposal today, we were saying – well, what we put forth yesterday, but on the Floor today – called for $50 billion in SBA disaster loans. And that would be leveraged to the $300 billion. If we want to help small businesses, this is a very fast way to do it. In the CARES Act, we had a grant program, a bipartisanly supported grant program, for grants to small businesses, $10 billion. Well, it’s already called upon beyond the $10 billion, so we put $15 billion additional there.

So, what we’re saying is we’ll have the same amount, $250 billion, to help small businesses, but we will have $125 [billion] of it to go directly to PPP, as we respect, and another $125 [billion] to be divided among the loans, what we call the disaster loans, a big ticket item used by all of the small businesses; the grants, the grants – they are grants, they are not loans; and $60 billion to have other financial institutions used to dealing with small businesses and the rest in the community to be facilitated to do this.

So, again, same thing, $250 billion for small business, but done in a way that really gets to where we see the data for the need.

Eventually, will we need more for PPP? Okay, let’s see the data. But, right now, they haven’t spent even a third of that. Say they have spent a third; they still have two-thirds of it left. So we have time to negotiate, to see how and where and when we should have more money there.

In addition to that, though, in our proposal, there’s the recognition of the needs for our health care workers and those in hospitals who are providing services, ministering to the needs of those who are sick and dying, and we want to have those hospitals to be funded and equipped. And we also want to have funds for state and local government, who are carrying a big burden of all of this. So we thought it would be a good opportunity to not only anticipate but reimburse states and local and hospitals and other health serving institutions for what they have already put out.

So let’s negotiate on the timing, the amount, and the rest. We know these are bare minimums that we need, in terms of other than the PPP. The PPP, let’s see the data, how that is working. Let’s consider the banks our friends. And let’s see how we can all help as many people as possible in this regard. And so this is a tragedy that has befallen our country, and we want to make sure that everyone participates.

One of the goals of the Administration and all of us is to keep people off of Unemployment Insurance if they can instead be running their businesses and keeping their workers employed. Wouldn’t that be another good way to address this economic challenge that we have?

Well, there’s so much going on. What we want to do is to make sure that it is done in the best way for the most people. It’s a lot of money, a tremendous amount of need. Everybody affected very directly – personally, health-wise, as well as financially health-wise. And as we do so, we must have the oversight to get that done, and I think it’s really important to make that point.

So, again, I’ll close as I began. As people of faith observe Passover and prepare to observe Easter and Ramadan, we pray with and for all who are weathering this threat, again, to their lives and livelihoods, and we pray for those entrusted with caring for them.

This is the prayer of Saint Francis – excuse me, I keep saying ‘Saint Francis’ – Pope Francis. Saint Francis is the patron saint of my city of San Francisco. But Pope Francis, a couple of weeks ago, put forth this world prayer that prayed that God would enlighten those responsible for the common good so that they may know how to care for those entrusted to their responsibility.

Let us hope that we all can have hearts full of love to receive that enlightenment, all of us, for the good – for the common good, as His Holiness references.

With that, I want to ask if you have any questions.

Press questioning followed (see transcript)

~

Speaker Pelosi conducted several interviews with the media this past week. Here are the links to the transcripts:
 
April 8th: Transcript of Pelosi Interview on NPR’s All Things Considered with Ari Shapiro and Kelsey Snell

Speaker Pelosi:Yesterday morning, I got a call from Secretary Mnuchin saying we need $250 billion more on top of the $350 [billion]. We are very proud of the program: the Paycheck Protection Program that is there. Our Chair of the Small Business Committee, Nydia Velázquez, is an expert on all of this and made her imprint on so many things that affect small business in the legislation.

What we said – what I said to the Secretary is, ‘I’ll have to get back to you,’ because one of the concerns that we have about the original 350 is that a lot of money – first come, first serve and many unbanked people who are under-banked are unserved on that basis. So, they don’t have banking relationships sophisticated in a way that others do.

So, we said for the next 250 we really need to have a percentage of that, $60 billion, that would go to something called community development financial institutions and that – that includes a number of things that they would open the way for others to participate.

It’s really important because we cannot solidify the inequalities in access to capital that exist in our economy at a time when we are addressing the coronavirus crisis.

More at the link.

~

April 9th: Washington Post: Pelosi urges GOP to ‘come to the table’ and continue talks on small-business funds

House Speaker Nancy Pelosi held her ground Wednesday and refused to buckle to the Trump administration’s demand for swift congressional approval of $250 billion in additional funds for small businesses, urging Republicans to continue negotiations on more relief to minority-owned companies and others struggling to secure loans during the coronavirus pandemic.

More at the link.

~

April 9th: Transcript of Pelosi Interview on CNBC’s Mad Money with [pile of human garbage] Jim Cramer
The interview is at the link.

~

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  1 comment for “Fighting Back: “Democrats are working to make sure that the CARES Act provides help for all businesses, not just the well-connected.”

  1. JanF
    April 11, 2020 at 7:37 am

    From Speaker Pelosi’s blog: Critical Small Business Needs Ignored in McConnell Bill

    April 10, 2020
    The coronavirus pandemic presents an existential threat to small businesses — and critical problems have emerged in the Small Business Administration’s relief programs that are endangering the survival of Main Streets across America. But while Democrats want to fix these issues in the interim relief package to prevent these small businesses from going under permanently, Senator McConnell’s bill does nothing for them at all.

    Main Street small businesses in underbanked communities and rural areas are being left behind by the Paycheck Protection Program. Democrats’ bill channels $60 billion of the Administration’s PPP funding request through community based financial institutions, which have a track record of lending to Main Street, rural, minority, women and veteran owned small businesses that are the lifeblood of American communities and essential to any recovery. McConnell’s bill only perpetuates the first-come, first-serve system that is threatening to leave underserved Main Street businesses hopelessly behind.

    Vox: Many small businesses are being shut out of a new loan program by major banks

    “After the launch of the Paycheck Protection Program, some businesses are just trying to find a lender that will consider their application.

    “…several of the large banks curb the types of applications they’re willing to consider. Bank of America has limited the businesses that could apply to the program to those with existing checking and credit accounts… Others like Chase, TD Bank, and Capital One, are limiting the applications they’re accepting to customers who’ve opened some type of account at that bank before.

    “This approach means that many small businesses could be shut out of the process by large, national lenders. If banks only serve their customers, then the very businesses that may need access to the PPP program most will be left out in the cold, no question,” Enhanced Capital Group CEO Michael Korengold told the Wall Street Journal. Minority-owned business are less likely to have existing accounts at these banks and could experience more obstacles in obtaining these loans as a result, the WSJ notes.

    The SBA Disaster Loan program is $300 billion short, slashing loan size for desperate small businesses. Democrats’ bill refreshes this critical program, with a $50 billion investment that will leverage the $300 billion in disaster loans that America’s small businesses have applied for. McConnell’s bill does nothing to address this shortfall.

    New York Times: Small Businesses Wait for Cash as Disaster Loan Program Unravels

    “Owners were supposed to be able to get up to $2 million. Now they’re being told the cap is $15,000 — if they can get any answers at all.

    “…But in the face of the pandemic, the loan program is drowning in requests. Many applicants have waited weeks for approval, with little to no information about where they stand, and others are being told they’ll get a fraction of what they expected. The program is supposed to offer loans of up to $2 million, but many recent applicants said the S.B.A. help line had told them that loans would be capped at $15,000 per borrower. That was backed up by a message from the agency that one applicant shared with The New York Times.

    The $10,000 SBA Disaster Grants are oversubscribed by 2 million applications, and SBA is cutting benefits for the smallest businesses. Democrats’ bill supplies a quick infusion of $15 billion to help meet the immense demand for these grants. McConnell’s bill does nothing to refill these funds desperately needed to tide over small businesses.

    New York Times: Small Businesses Wait for Cash as Disaster Loan Program Unravels

    “If every applicant received the maximum $10,000 grant, the funding would cover around one million businesses. But more than three million applied for disaster loans last week alone, Joseph Amato, the director of the S.B.A.’s Nevada office, told attendees at a webinar on Monday. His comments were reported earlier by The Washington Post.

    “In response to the demand, the S.B.A. appears to have also added an additional restriction on the grants: Dozens of business owners said they had been told that the grant, if they got it, would be limited to $1,000 per employee — meaning the smallest businesses could not receive the full amount.

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