On Thursday, the House is voting on not one, but two of Rep. Dean Phillips’ bills related to the Paycheck Protection Program (PPP), Federal loans established to help small businesses pay for payroll, rent, and utilities during the COVID-19 pandemic.
The reasoning for the first bill, Phillips said on the floor of the House, is that he’s heard from small business owners around Minnesota that the current PPP loan program is too inflexible and confusing.
“For more than 43 years Minnesotans have celebrated birthdays and little league wins of cheese curds at Lion’s Tap,” Phillips said of the restaurant in Eden Prairie. When his office asked for feedback on PPP loans, Phillips said Burt, the owner, was specific with his critique: Because Lion’s Tap is a restaurant closed during the state’s shutdown, they couldn’t hire back their staff on time to receive loan forgiveness.
The first bill, The Paycheck Protection Program Flexibility Act, responds directly to that, loosening the conditions for loan forgiveness and making it easier to apply. The bill would extend the eight week loan forgiveness period to 24 weeks and allow employers to rehire employees after June 30 and still receive loan forgiveness. It also would also loosen a provision that required 75 percent of the loans to be spent on payroll, lowering it to 60; get rid of a provision that required the loans to be paid off in two years, and remove a provision that would allow businesses to receive both payroll tax deferments and PPP loans, which they cannot receive concurrently.
“I am hearing from too many Minnesota small business owners who have received PPP loans but are afraid to use the money because of the inflexible, one size fits all rules — and others who are not applying for aid at all out of fear and confusion,” Phillips said in a statement.
Phillips introduced the bill with Republican Rep. Chip Roy of Texas. “I don’t want to see another local institution go out of business because Congress is more focused on politics than helping Americans who need it,” Roy said in a statement. “Fortunately, this bipartisan bill puts Americans first and will ensure our favorite small business[es] are around on the other side. I look forward to its passage with bipartisan support.”
Its three other original cosponsors (the bill has since been updated and released again) were all Republicans: Rep. Tom Emmer of Minnesota’s Sixth, Fred Upton of Michigan, Brian Fitzpatrick of Pennsylvania, and Andy Harris of Maryland. Phillips also secured public endorsements from the Problem Solvers Caucus, a bipartisan group of House members; and the New Democrat Caucus, self-described “fiscally responsible” Democrats.
The second bill, The Transparency and Reporting for the Underbanked and Taxpayers at Home (TRUTH) Act, responds to concern that the Trump administration isn’t adequately monitoring how small business funding is being distributed. That bill would direct the Small Business Association to publicly disclose small businesses that receive over $2 million in assistance.
While Republican leadership is amenable to legislation that makes it easier to obtain PPP loans, they are not comfortable with imposing additional reporting requirements for businesses.
As Rep. Steve Chabot of Ohio, the ranking Republican on the Small Business Committee, put it during a floor debate on the bill: “Publicly naming them will do little to increase transparency.”
Phillips shot back: “We cannot accept a situation in which bigger businesses with access to other sources of liquidity are pushing to the front of the line at the expense of those with the greatest needs,” Phillips said. “I won’t accept that.”
While other members in the delegation (and Phillips himself) have often been able to work their proposed legislation into larger bills, if signed into law by the President, either bill would become the second standalone bill introduced by a member of the Minnesota congressional delegation to be enacted. The only other bill, the Payment Integrity Information Act of 2019, was written by his colleague, Rep. Angie Craig.