Corporate Finance

Businesses Need Swift, Aggressive Action: U.S. Chamber of Commerce

Congress, President must act quickly to combat the economic disruption of the COVID-19 outbreak, says the business group.
Vincent RyanMarch 16, 2020
Businesses Need Swift, Aggressive Action: U.S. Chamber of Commerce

“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, on Monday morning.

In a letter to President Donald 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,” the U.S. Chamber said. “Collectively, these taxes add just over 15% to the cost of employing the average employee.” Temporary relief from these taxes would give businesses operating capital to keep paying their employees and avoid layoffs.

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2. Legislation expanding and streamlining loan programs for small businesses experiencing revenue loss from the COVID-19 outbreak. The Small Business Administration (SBA) disaster loan program for those impacted should be immediately made available nationwide, eliminating the complex and time-consuming local certification processes, the U.S. Chamber said. In particular, 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.” The interest rate is 3.75% for small businesses and 2.75% for non-profits, the U.S. Chamber noted.

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. The chamber asked for legislation that would expand the use of the Federal Reserve discount window. “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,” said the chamber.

The U.S. Chamber said it will release additional recommendations policymakers should enact to help businesses mitigate, work through, and recover from the impact of COVID-19.

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