Congress approves measure to replenish halted coronavirus small-business loan program
The Senate approved a measure Tuesday that would revive a program geared to keep small businesses from shuttering and their employees from going on unemployment because of the economic impacts of the coronavirus pandemic.
The nearly half-trillion-dollar measure, which was approved through voice vote, would provide more funds to the Paycheck Protection Program, which was halted last week after it ran out of money.
The $484 billion bill would inject the program, which provides loans to small businesses, with more than $320 billion. Of that, $60 billion would be set aside for community-based lenders, smaller banks and credit unions to assist smaller businesses that don’t have established relationships with big banks and had a harder time accessing the funds in the first round of loans. About $10 billion of that would also be allocated for administration fees. The measure would also bolster the Small Business Administration’s disaster loan and grant programs, which dried up during the coronavirus crisis.
‘Life may change for us all’: How we respond to the coronavirus crisis will be defining, historians say.
Is this like the 2008 financial crisis, 9/11, World War II? Or perhaps, as some economists predict and news that 3.3 million people applied for unemployment last week suggests, will this be remembered as a period of deep loss and poverty, something like the grim 1930s when unemployment hit 25%?
“This will be very economically disruptive, and an analogy to the Great Depression is the closest to what we may face,” says Stanford University economics professor Matthew Jackson. “These huge events can have profound changes on the views and beliefs people have.”
That we are in for difficult months and perhaps years ahead seems commonly accepted, as virus deaths mount, hospitals are overwhelmed and a decimated service-based economy spurs a $2.2 trillion wartime-scale bailout package in Washington, D.C.
But if there is cause for optimism in these bleak times, historians, economists and writers say, it is born out of the fact that we as a nation can choose to seize this moment to create an even greater society better poised to protect its citizens from future crises.
There are precedents for bold responses to watershed American events. The Depression gave rise to the Social Security Act, which promised citizens financial safety in their later years. World War II drew women into the workforce and minorities into the military, leading to the equal and civil rights movements. And the 2008 financial meltdown gave rise to banking regulations and renewed scrutiny of illicit financial tools.
A report from Deloitte and Salesforce released this month presents four scenarios for the “New Normal” the next three to five years
The end result: An intentionally fuzzy picture of several possible futures, varying based on how several unknowns — such as the duration of the pandemic — unfold. Those possible futures highlight trends that may soon define our times.
On one end of the spectrum: A short-lived pandemic that will batter small and medium-sized businesses. It leaves consumers — grateful to once again gather with friends, loved ones and coworkers in person — reevaluating some of their pre-pandemic habits. On the other end: A prolonged, nearly impossible to contain virus that leaves the world isolated, distrustful and suffering.
What might life be like in this future? Corporations would play an even bigger role in our lives than they currently do — and Blau suspects we would come to embrace that, since those companies helped us through the crisis. The report says this future could lead to an era of greater corporate responsibility and trust.
It’s an expansion of a trend seen to some extent in the today — public-private partnerships where big corporations step in when governments can’t handle the crisis alone. There’s threads of this in the daily news of today: Tech companies fixing broken ventilators for the government; Apple and Google developing apps to help fight the pandemic.
Lone wolves. This is the future “no one wants to happen,” Blau said. This scenario could happen if the virus proves impossible to contain and spreads in long-lasting waves around the globe.
“Mounting deaths, social unrest, and economic freefall become prominent,” the report says. Nations turn inward and limit contact with the outside world in the interest of national security. It’s a future where even allies feel like they cannot trust each other.
The good news: The future isn’t written yet, and we have a say in how it plays out. Report authors listed how citizens of nations responded to the crisis as one of their top unknowns. Nations that work together and “think big and act fast” will fare better, they predicted.
While our local entrepreneurs and small businesses are struggling, we hope there is a light at the end of the tunnel. We have a greater opportunity than ever before to get policymakers to listen to what entrepreneurs need to start and grow their businesses. Doing so will not only stabilize the economy in the short term, but it could also help bring down unemployment rates in the long term, granting greater access to entrepreneurship than we’ve ever seen.
So that malaria drug Trump has repeatedly touted as a treatment for the coronavirus? The one made by a pharmaceutical company in which several Trump allies, and Trump himself, reportedly have a financial stake? A panel of medical experts convened by the U.S. National Institutes of Health recommended against its use by Covid-19 patients as part of a drug combination. Also, the Food and Drug Administration advised there’s yet another reason to quit smoking: It makes you more vulnerable to Covid-19, both getting it and dying from it.