June 1, 2020 - Issue: Vol. 166, No. 101 — Daily Edition116th Congress (2019 - 2020) - 2nd Session
PAYCHECK PROTECTION PROGRAM; Congressional Record Vol. 166, No. 101
(Senate - June 01, 2020)
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[Pages S2627-S2628] From the Congressional Record Online through the Government Publishing Office [www.gpo.gov] PAYCHECK PROTECTION PROGRAM Mr. CORNYN. Madam President, on to another matter, I was glad to be able to get back home to Texas this last week, where our communities are slowly coming out of a coronavirus shutdown. Churches have begun safely welcoming worshippers, restaurants are beginning to safely seat customers, albeit with the appropriate social distancing, and retailers are now beginning to safely reopen their doors. After weeks and in some cases months of hunkering down, it is a welcome sign of our progress in the fight against the coronavirus and the first step in our economic recovery. When stay-at-home orders were first put in place, small business were worried--understandably so--about their ability to survive. Many said they couldn't survive more than a couple of weeks under those circumstances. Back in March, Fort Worth chef Tim Love described the situation as ``Armageddon.'' He said: It's worse than a tornado, it's worse than a hurricane, it's worse than a fire. This is going to destroy everything that I have built. But the restaurants weren't alone; I heard similar concerns from countless other small business owners across nearly every sector of the economy--hospitality, tourism, retail, manufacturing, and the list goes on. Keeping our small businesses open means much more than having another restaurant to eat in or a shop to buy from on Main Street; it is one of the most effective ways to support our economy, by protecting those jobs. Across the country, small businesses have employed nearly half of all U.S. workers. They are the lifeblood of our local economies and provide critical services to each of our communities. Without customers coming through the front doors each day, it is hard to cover your business expenses and keep employees on the payroll. In fact, it is not just hard, it is impossible. Whether you are a new business just starting out or a decades-old community staple, the financial squeeze caused by this virus and the mitigation efforts that ensued are unavoidable. As we worked on coronavirus response legislation here in March, we knew that small businesses needed our support. That is why we established the Paycheck Protection Program and initially funded it with $350 billion. This funded loans that were available for these businesses to keep their employees on their payrolls and cover other necessary expenses, and if they did so, that loan would turn into a grant. It was so popular--and it's not hard to see why--and the need was so great that that initial funding ran out in about 2 weeks, so we wisely, in my opinion, decided to replenish it with another $320 billion. An IT and document management company in Sugar Land, TX, called Function 4 was one of the recipients of one of those PPP loans. One of the partners, Bill Patsouras, said that if it wasn't for the PPP, they would ``absolutely have to start letting people go.'' But instead of layoffs, all 89 employees of Function 4 are still employed and still working. This is a familiar story, I am sure, not just in Texas but elsewhere. As of May 23, small businesses in Texas have received more than 350,000 PPP loans totaling more than $40 billion. That is an average loan size of less than $115,000. These are for small and medium-size businesses. In speaking to my community bankers last week, I learned that one bank had approved a loan request for as little as $300. So while the average loan was $115,000, some businesses needed far less than that, including this one loan for $300. No matter how large or small, these loans have allowed businesses, churches, nonprofits, and some of our most [[Page S2628]] valuable community institutions to survive. That is not to say, though, it was perfect--at least to start with. When it was first established, no one expected the rollout to be perfect. I think that would be an exercise in hope over experience because no government program this big and created this fast--and we knew both of those were important. We needed to go big, and we needed to deal with the need urgently. We knew there would be some problems. A brand-new loan program drafted and passed in such a short timeframe is bound to have some hiccups. So over the last several weeks, I have been working and talking to my constituents--as we all have--to identify what needs to be fixed or improved, what gaps need to be filled; figure out what is working, what isn't, and how we can make it even more effective. Well, I heard repeatedly that the biggest need was for flexibility in the use of those funds, and that is where they are needed the most. The main goal of the Paycheck Protection Program is right in the name--protecting paychecks. That is why we said that 75 percent of the money needed to be used for payroll; otherwise you were going to have to pay the money back. We said originally that the remaining 25 percent could be used for a range of other expenses, like rent or utilities. But based on the feedback I have gotten--and I am confident that I am not alone--we missed our mark by establishing that 75-percent requirement. For many who had no business because they were shut down as part of the mitigation efforts, their payroll expenses--they couldn't use the three-quarters of the loan for payroll--at least not in the short timeframe we allowed for. They needed to be able to spend more on other expenses, like rent and mortgage. The company owned by Tim Love, whom I mentioned a moment ago, who described this crisis as Armageddon, received a PPP loan and so far has been able to hire back 80 percent of their 490 employees. A couple of weeks ago, he participated in a roundtable at the White House, and he asked for adjustments to give businesses more flexibility. He said: We're not asking for more money. We're just asking for the opportunity to spend it the way that you want us to spend it, the way it was intended; to take care of our employees when we're able to open up. That is precisely what we are working to do, and I hope we can get legislation to the President's desk this week to make those needed changes. Last week, the House passed a bill to provide that flexibility for small businesses to use these funds where they are needed most. This effort was spearheaded by a fellow member of the Texas delegation, Congressman Chip Roy, and it passed by a vote of 417 to 1--a rare feat these days in the House of Representatives. The bill will reduce the level of funds that must be used on payroll from 75 percent to 60 percent. This will make sure that the bulk of the funding continues to protect jobs and support workers, while giving businesses the flexibility they need to stay viable. This legislation also gives borrowers another valuable asset, and that is the asset of time. The PPP as originally written gave borrowers 8 weeks to use these funds, and I have repeatedly heard from my constituents that 8 weeks is simply not enough. For those who received these loans at the outset in early April, their window to use the PPP loan is quickly closing, and although businesses are now just starting to safely reopen, it is going to take some time before we find our new normal. I don't think we want a situation where, after being back at work for 8 weeks, employees are let go because of an administrative policy that makes no sense. It is completely arbitrary, and that is exactly what could happen if we don't act. The bill passed by the House would extend that period of time to 24 weeks for borrowers to use those funds. It will ensure that businesses and nonprofits have the time to safely reopen and rebuild their operations while using the PPP to help cover payroll and other business expenses. This would be a win-win. I rarely have heard from my constituents back home that we have done anything that has been so universally appreciated as the PPP program, or the Paycheck Protection Program. This legislation that has passed the House and I hope we will take up and pass this week extends the benefits of this incredible program and provides more stability for small businesses without spending anymore taxpayer dollars. It doesn't cost us anything. Giving small businesses and nonprofits more flexibility to use this money when and where it is needed is important to our long-term recovery. I have heard very positive feedback about these changes from the small business owners I represent, and I am eager to support the passage of the latest House bill here in the Senate. I yield the floor. The PRESIDING OFFICER. The Democratic whip. ____________________