The U.S. Chamber of Commerce today called for additional swift, aggressive action to ensure American businesses of all sizes can mitigate the potentially devastating economic effects from the spread of the Coronavirus, starting with three key steps.
Taken together these three steps, in addition to other actions recommended by the U.S. Chamber and those already initiated by the federal government, will ensure that businesses have increased liquidity, access to financing, and the ability to pay their employees as they weather the temporary loss in revenue from the virus. The biggest issue facing businesses now is a lack of revenue due to a sudden and sharp drop in demand. Without assistance, that likely will force some businesses to choose among difficult options: pay workers less, not at all, or shut down altogether.
“We are pleased that Congress has taken some steps in the right direction. Let’s keep going. No business or family should go bankrupt from the temporary but significant disruption caused by the Coronavirus,” said Tom Donohue, CEO of the U.S. Chamber of Commerce.
“We need big, bold policy moves now to ensure businesses continue to function, meet payroll, and keep American workers employed,” Donohue said. “Similar to major natural disasters of the past, the Coronavirus will have a significant economic impact—and we must act accordingly. We must not let this public health emergency leave a lasting, permanent impact on our economy, small businesses, and American workers. We urge Congress and the president to move swiftly to enact these three solutions to help American businesses respond to the virus so they can continue to support their workers and serve their communities.”
In a letter sent to President Trump and congressional leadership, the U.S. Chamber called on Congress and the administration to enact, as swiftly as possible, the following three proposals:
1. Legislation canceling payment of all payroll taxes paid by employers for the months of March, April, and May. Employers send more than $100 billion to the federal government monthly in the form of Social Security, Medicare, and unemployment taxes. Collectively, these taxes add just over 15% to the cost of employing the average employee. Temporary relief from these taxes would give businesses more breathing room and operating capital to keep paying their employees and avoid layoffs.
2. Legislation expanding and streamlining loan programs for small businessesexperiencing revenue loss from Coronavirus. The Small Business Administration (SBA) disaster loan program for those impacted by the Coronavirus should be immediately made available nationwide, eliminating the complex and time-consuming local certification processes. The SBA also should be given the authority to streamline its disaster-loan approval process for amounts below $350,000 in order to provide emergency capital more quickly. This should include removing the requirement that small businesses demonstrate that they cannot access credit elsewhere before turning to the SBA. These loans may be used to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the virus’s impact. The interest rate is 3.75% for small businesses and 2.75% for non-profits.
3. Legislation enabling the creation of credit facilities to provide loans and loan guarantees to employers with more than 500 employees experiencing significant revenue loss from the Coronavirus. Specifically, legislation should expand the use of the Federal Reserve Discount Window through the easing of restrictions of Section 13-3 of the Federal Reserve Act. The U.S. Treasury, the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation should also work in combination with banks to establish a system of credit facilities to provide loans and loan guarantees that can be accessed by businesses with more than 500 employees to address disruptions from the Coronavirus.
In addition to these steps, the U.S. Chamber calls for a series of measures to help businesses weather supply chain disruptions, support business operations, assist employees, and protect small and midsize businesses. The U.S. Chamber also approves of action taken in recent days by the government to respond to the outbreak, including the Federal Reserve’s move on interest rates on Sunday and Coronavirus relief legislation currently under consideration in Congress.
In the coming days, the U.S. Chamber will release additional recommendations policymakers should enact to help businesses mitigate, work through, and recover from the impact of the Coronavirus.
The U.S. Chamber of Commerce is committed to helping American businesses respond to the Coronavirus so they can support their employees, customers, and communities. Our members and the state and local chambers, who are on the front lines of this pandemic, need us now more than ever to help them through this temporary but significant disruption. We will continue working every day to help our country’s people, businesses, and economy weather this storm and emerge stronger—just as we have at other challenging times in our nation’s history. Visituschamber.com/Coronavirusfor more information.