Sens. Marco Rubio and Susan Collins said Wednesday they want the government to provide grants to small businesses for six to eight weeks to keep their employees on the payroll through the shock of the coronavirus pandemic.
Rubio, a Florida Republican who is chairman of the Senate Small Business Committee, is working on the small business portion of the forthcoming pandemic bill that is meant to move through the Senate at “warp speed.” He said Wednesday that the proposal would entail the Small Business Administration providing loans that would be forgiven if recipients could show the money was used to maintain payroll.
“The alternative is to send everybody money through the unemployment system, but now, you’re disconnecting them from employment,” Rubio said on CNBC. “I think the last thing we need here is disconnecting people from the security of knowing they have a job to go back to even when this ends.”
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The proposal would cost approximately $300 billion, based on Treasury Department estimates, said Collins, a Republican who represents Maine.
Rubio said that the loans would become grants to the extent that the business maintained payroll. For example, if a company borrowed $15,000 and subsequently showed that it maintained $10,000 in payroll, the $10,000 would be forgiven. The $5,000 not used for employee costs would become a “traditional small business loan.”
The small business proposal is separate from the idea, backed by the Trump administration and many in the Senate, of sending all adults a check. As a result, the federal government could, in theory, pay for some small business employees to remain on the payroll and give them $1,000 checks at the same time, if they qualify. Rubio said the definition of small business is based on SBA regulations that are already in place.
He also said he liked the fact that his proposal is not “a government interaction,” since the money would be distributed by preferred lenders from across the country through SBA programs, including big banks, smaller community banks, and credit unions.
“We need to get money to small business in America swiftly, so they don’t have to lay off millions of workers due to government not allowing them to operate,” Rubio said on Tuesday.
He said the alternative to such federal grants would be sending workers money through the unemployment system, which Rubio said would disconnect people from their jobs even after the coronavirus outbreak ends.
The Florida senator justified such a government assistance program because the country is facing “historic health and economic challenge,” which requires “bold temporary government measures many of us would never support under any other scenario.”
