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HOUSE PASSES PROBLEM SOLVERS CAUCUS ENDORSED LEGISLATION TO ASSIST SMALL BUSINESSES

May 28, 2020

WASHINGTON – Today, the House of Representatives passed the Problem Solvers Caucus-endorsed H.R. 7010,the Paycheck Protection Program Flexibility Actof 2020, a bill designed to help small businesses weather today's economic storm.

The bipartisan bill was led by Caucus Members Reps. Dean Phillips (D-MN) and Fred Upton (R-MI).

"Small businesses are the backbone of our communities and neighborhoods, providing jobs and critical services to millions of Americans," said Problem Solvers Caucus Co-Chairs, Reps. Tom Reed (R-NY) and Josh Gottheimer (D-NJ). "We applaud the Problem Solvers Caucus for their bipartisanship in ensuring our small businesses and entrepreneurs are protected and have the support they need to get through these challenging times."

The Paycheck Protection Program Flexibility Act, revamps some of the rules within the current Paycheck Protection Program to better assist small businesses including:

  • Allowing forgiveness for expenses beyond the 8-week covered period
    • The 8-week timeline does not work for local businesses that are prohibited from opening their doors or will only be allowed to open with restrictions. Businesses should have the flexibility to spread the PPP loan proceeds over the full course of the crisis until demand returns. Otherwise, employees will simply be furloughed at the expiration of the 8 weeks, defeating a major goal of the program.
  • Eliminating restrictions limiting non-payroll expenses to 25% of loan proceeds
    • In order to survive, businesses must pay fixed costs. For many businesses, payroll simply does not represent 75% of their monthly expenses and 25% does not leave enough to cover mortgage, rent, and utilities. Retaining employees is not possible if a business cannot retain their physical location
  • Eliminating restrictions that limits loan terms to 2 years
    • According to the American Hotel and Lodging Association, full recovery for that industry following both the September 11, 2001 terrorist attacks and the 2008 recession took more than two full years. This is the same for many other industries: it will take many businesses more than two years to achieve sufficient revenue to pay back the loan.
  • Ensuring full access to payroll tax deferment for businesses that take PPP loans
    • The purpose of PPP and the payroll tax deferment was to provide businesses with capital to weather the crisis. Receiving both should not be considered double- dipping. Businesses need access to both sources of cash flow to survive.
  • Providing a rehiring safe harbor for businesses unable to rehire employees
    • To receive loan forgiveness under PPP, a business must rehire employees by a deadline of June 30, 2020. However, due to stay at home orders and other issues, this is not feasible in many cases. To mitigate this unintended consequence, businesses that make a good faith attempt to rehire employees, but are unable to, should still be able to receive loan forgiveness.

The Problem Solvers Caucus came together to endorse the Paycheck Protection Program Flexibility Act earlier this week when more than 75 percent of the 50-Member Caucus agreed to support the legislation.

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The Problem Solvers Caucus is a bipartisan group in Congress comprising 50 members – equally divided between Democrats and Republicans – who are committed to forging bipartisan cooperation on key issues. It is co-chaired by Congressman Josh Gottheimer (D-NJ) and Congressman Tom Reed (R-NY).