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[Page S4414]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CORONAVIRUS
Mr. LEAHY. Mr. President, the Congress, our States, and the
administration talk about ways to handle the immediate consequences of
COVIV-19. We must also talk about the aftermath, and Steve Case has
written a provocative op-ed about the future.
Those of us in Congress should read and discuss it It has to be
considered in future planning.
I ask unanimous consent that the text of this article be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Washington Post, July 19, 2020]
There's No Going back to the Pre-Pandemic Economy--Congress Should
Respond Accordingly
(By Steve Case)
This week, Congress will likely take up the next steps in
the economic response to the covid-19 pandemic. If the
package is like previous efforts, it will focus on trying to
turn back the clock to February 2020: treating the economy as
if it were Sleeping Beauty, merely needing to be awakened to
be fully restored. This strategy is a mistake: Congress needs
to stop solely backing efforts to restore the old economic
reality and focus on how to develop a new one.
Most of the $1 trillion that Congress has put into business
support so far during the pandemic has been directed to
preserving existing firms through the Paycheck Protection
Program and the Main Street Relief Fund. Helping those
businesses and their workers is vital, but that alone won't
fuel the economic recovery the country needs.
The problem is that many of the businesses backed by PPP or
Main Street are going to wind up shutting down. Even when
they aren't facing a global pandemic or economic crisis,
about 100,000 small and medium-size businesses fail in the
United States every year. New businesses will be needed to
replace the ones that permanently close. Moreover, the
failure rate is likely to be higher, as many firms were on
the wrong side of trends--such as the move to online
shopping, convenient food delivery or watching streaming
content at home--that the pandemic lockdown has accelerated.
Another consideration: The protests stirred by the killing
of George Floyd in Minneapolis police custody have made clear
how many Americans were left behind in the pre-coronavirus
economy; restoring the way things were before the virus hit
won't address these needs.
Here are three ways Congress can help launch a new, more
equitable era of entrepreneurship.
First: Make it easier for the earliest-stage start-ups to
receive PPP dollars and for all start-ups to access the Main
Street Relief Fund. PPP loans go to existing businesses to
maintain jobs but not to new businesses that want to create
them. Main Street loans go only to companies that are already
profitable; most start-ups are not. That approach is
backward: Studies show that nearly all net new job creation
comes from start-ups, not established businesses.
A PPP revision should allow start-ups to obtain loans based
on their plans to create jobs--with loan forgiveness granted
only if those jobs materialize. If they don't, the start-ups
should be required to repay the loans before any other
obligations. And the barrier in the Main Street lending
program that makes businesses ineligible for aid if they were
not profitable in 2019 should be removed.
Second, the government needs to be a counterweight to
private capital that exacerbates geographic disparities in
opportunity as the country responds to the crisis. The
pandemic is a devastating tragedy, but adversity tends to be
met by the creation of new industries and new businesses.
This crisis will stir innovations in medicine, goods and
services delivered at home, remote work and learning, and
more. Where will these new firms grow? If the decision is
left to the private sector alone, almost all of them will be
in three states: New York, California and Massachusetts,
which attract 75 percent of all venture capital.
Great ideas to respond to this crisis are spread widely
across the country--but capital is not. Business assistance
programs created by Congress should have a special focus on
getting startups off the ground in places that have lacked
venture capital backing in the past. Sen. Amy Klobuchar (D-
Minn.) and others have already proposed such legislation;
members of Congress from these neglected areas should insist
it is part of any Phase 4 bill.
Finally, lawmakers should step in to address unintended
inequalities of opportunity for female and minority
entrepreneurs caused by the earlier relief bills. Because
these programs fund only existing businesses, they reinforce
opportunity gaps. Communities with thriving businesses get
more PPP and Main Street aid; those that have lacked capital
to get businesses off the ground in the past see little help
now.
The solution would be for Congress to direct unused PPP
funds to start-ups led by female entrepreneurs and
entrepreneurs of color, creating opportunities where they
have not existed before. The Main Street Lending program
could be modified to extend special debt options to community
development groups and minority-focused accelerators to back
a new wave of startups founded by historically
underrepresented entrepreneurs.
There's no going back to the pre-pandemic U.S. economy. Too
much has changed; too many new needs exist. This is a rare
opportunity to break with the past and create a better
future. Congress should grab it.
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