During Friday’s Democratic Weekly Address, Sen. Ben Cardin (D-MD) argued that the Trump administration’s request to add money to the Paycheck Protection Program “will not help those still waiting to apply for urgently needed economic disaster loans and grants.” Because the Trump administration is only adding money to PPP and not other programs as well.
Transcript as Follows:
“I’m Ben Cardin, and I am proud to represent the State of Maryland in the United States Senate.
Like all of you, I am practicing social distancing, so I am joining you from my home instead of a studio.
As our nation unites to tackle the COVID-19 pandemic, social distancing is an important tool to flatten the curve of transmission and it has affected all parts of our society, especially our nation’s 30 million small businesses, which have experienced a dramatic reduction in revenues as much of our economy has come to a screeching halt.
Democrats want to ensure that help gets to the small businesses most in need during this crisis. It’s why, as the top Democrat on the Senate Small Business Committee, I was proud to join a bipartisan Senate task force that reached an agreement on several new economic relief programs and secured $377 billion in funding for small businesses in the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act.
One of those programs, the Paycheck Protection Program, also known as PPP, received $349 billion in funding to provide zero-fee forgivable loans to small businesses that keep their employees on the payroll for eight weeks.
In the first days of the program, small business owners have been approved for more than $100 billion in loans, or about one-third of the funds Congress authorized so far. But I fear that when we see who eventually receives these vital loans, it may follow a very familiar pattern.
Many banks are serving existing clients first, with some even prioritizing only those clients who have already taken out debt with that financial institution. That goes against the intent of the Paycheck Protection Program. Congress created PPP to partner with lenders around the country to quickly deploy capital to ALL small businesses, not just small businesses that have relationships with lenders.
Underserved borrowers, including women, minorities, the military community, and those seeking small loans, have long struggled to access capital through traditional banks, leaving them with no or severely limited access to these funds.
Without proactive and sustained outreach, and funding reserved for small loans through mission lenders and small community banks, we can expect that the underserved communities will be disproportionately harmed – just as they were during the Great Recession, when minority business enterprises suffered a precipitous decline in the proportion of SBA-backed loan approvals.
Senate Democrats are committed to ensuring that history does not repeat itself.
While the demand for Paycheck Protection loans is high, and there is bipartisan agreement that Congress will have to provide additional funding in the future, there are other vital SBA relief programs that have ALREADY exhausted their funding, including the Economic Injury Disaster Loan program and the EIDL grant program.
Adding money only to the Paycheck Protection Program, as the Trump administration requested, will not help those still waiting to apply for urgently needed economic disaster loans and grants. Senate Democrats are working to add funds to those programs now, as well as the Paycheck Protection Program.
Our proposal would reserve $60 billion for financial institutions with strong relationships in underserved and rural communities, including community banks, credit unions and microlenders, to ensure that small businesses in every community have an opportunity to secure the economic relief they need.
The unanimous passage of the CARES Act was one of the most bipartisan moments I have been a part of since I entered the United States Senate.
And while no one knows how long this public health crisis will last, we do know that in order for our small businesses to survive, Congress must find a way back to working in a bipartisan fashion to enact solutions that serve everyone, especially those most in need due to this public health crisis..
Thank you. Please stay home and stay safe.”
Follow Ian Hanchett on Twitter @IanHanchett
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