WASHINGTON – The U.S. Chamber of Commerce on Monday called for sweeping amendments and expansion of federal rules for payroll tax collection and lending to prop up American businesses during the coronavirus crisis.
The viral pandemic has created a "temporary period of revenue disruption" that has halted commerce in a nearly unprecedented way, said Neil Bradley, the chamber's senior policy officer.
The chamber, the trade group for tens of thousands of businesses of all sizes, wants the government to suspend collection of Social Security, Medicare and other payroll taxes for three months to save businesses $300 billion to deal with loss of income and disruption of business because of the spread of coronavirus in the U.S.
The chamber also wants the Small Business Administration (SBA) to quickly qualify companies for certain kinds of loans.
It wants the government to suspend a policy of local certification of disaster loan borrowers before submitting their requests to the SBA. The chamber also said small businesses should not be forced to prove that they could not get private loans before turning to the SBA, which guarantees that lenders will recover at least 75% of what they lend if borrowers default.
One local banker agreed streamlining was necessary to get money to stressed businesses faster than usual.
"We still have to do what's prudent, but it makes sense to help people at this time," said Christine Young, SBA program director for Choice Bank in Golden Valley.
Young said Choice Bank is already working with business borrowers of all types to adjust existing loan repayments because of the coronavirus, especially companies in the trade show, restaurant and entertainment industries.
Following what it said was the practice after the 9/11 terrorist attacks and the Great Recession in 2008, the chamber further called for creation of a federal lending and loan guarantee program for companies with over 500 employees.
The proposal envisions "a set of credit facilities" where big companies can borrow from the government or with government loan guarantees to stay afloat and maintain employment.
"Loans and loan guarantees are not a bailout," said chamber executive vice president Tom Quaadman.
Whatever must be done, Democratic U.S. Sen. Tina Smith of Minnesota stressed the need to act quickly.
"I believe Congress must provide prompt relief to business and workers hurt by the coronavirus outbreak," Smith said in a statement reacting to the chamber proposals. "We need to respond with urgency, and our top priority must be supporting people directly impacted by the coronavirus pandemic."
Bradley singled out importation of medical devices as needing to be guaranteed.
A massive economic stimulus program is necessary to protect businesses and workers, chamber officials told journalists.
The speed with which Congress and the White House might implement any of the chamber's policy recommendations or its 30 other detailed suggestions remained unresolved. The House passed a bill last week to address the virus pandemic. Senate debate on that bill and alternatives are up for consideration this week.
The employer payroll tax suspension is not part of the House bill. Bradley called it a necessity to keep businesses functioning and workers employed. Payroll taxes go mostly to fund Social Security retirement benefits and Medicare, health insurance for Americans 65 and older.
It is unclear how or when the $300 billion lost to the hiatus in payroll-tax collection would be repaid. But Bradley said he anticipated that Congress would "make Medicare and Social Security whole eventually."
For the moment, the chamber is hoping for big changes very soon to minimize the economic pain. The business group thinks it will get them.
Based on conversations with congressional and White House officials, Bradley said, there is "an intense sense of urgency on the part of Democrats and Republicans that is growing daily, if not hourly."
Jim Spencer • 202-662-7432