Small businesses oppose clawback of Covid-19 aid

This is about $5 billion that Congress has appropriated for three small business relief programs, but has yet to be spent. Some lawmakers want to reallocate these existing funds to health care, rather than allocating new funds, as they increasingly focus on containing the federal deficit and spending amid soaring inflation, which is reaching its highest level in 40 years.

The debate underscores the struggle to meet demands made by the Biden administration to meet the needs of the pandemic, while meeting Republican demands not to spend new money. Lawmakers have been forced to make tough choices about where to draw funds, including from widely supported causes such as support for small businesses.

The funding clawback proposal is “out of line with the stated need of small businesses and the stated desire on both sides of the aisle to help small businesses,” said John Arensmeyer, chief executive of Small Business Majority, a defense group.

Small businesses face many challenges, including managing supply chain bottlenecks and rising prices. The overall economic recovery from the pandemic-induced slowdown shows continued signs of momentum, but small business optimism deteriorated in March due to inflation concerns, according to Federation survey data. National Independent Business.

Congress is expected to continue debating the Covid-19 funding measure when it returns from recess later this month. The White House in March asked Congress to provide $22.5 billion for pandemic-related health needs. Republicans have been reluctant to appropriate any new spending. Instead, Senate lawmakers negotiated a bipartisan deal earlier this month that relies on reallocating unused funds to provide $10 billion.

Since the start of the pandemic, Congress has appropriated more than $5 trillion for the federal response to Covid-19, according to the Pandemic Response Accountability Committee, a group of inspectors general across government.

Mr. Arensmeyer said he was very concerned about the $2.13 billion in budgetary authority that the agreement proposes to cancel from the State Small Business Credit Initiative, a Treasury Department program that Congress had originally provided $10 billion through a coronavirus relief package passed last year. The initiative is designed to direct the money in three tranches to states, territories and tribal governments for programs that provide venture capital or encourage private lenders to lend to small businesses.

The clawback would come from money intended to be distributed in the program’s third tranche and funds intended to provide technical assistance to participating companies, according to a preview of the agreement from Senate Democrats.

Sen. Mitt Romney (R., Utah), one of the deal’s lead negotiators, insisted that new Covid-19 funding would come from reallocated money. “It is important to note that this bill includes dollar-for-dollar offsets and will not cost the American people a single additional dollar,” he said earlier this month.

Lawmakers decided on the size of the deal after considering what compensation for lapsed funds was acceptable to the Republicans and Democrats involved, according to a GOP aide familiar with the negotiations.

The White House says it is urging Congress to act quickly.

“We have called on Congress to provide the urgently needed funds for treatments, tests and vaccines without any compensation, just as lawmakers have done on a bipartisan basis repeatedly under the previous administration,” he said. said Abdullah Hasan, spokesman for the White House Office of Management and Management. Budget. “Senate Republicans insisted they would only offer vital protections to Americans with offsets.”

The deal would also repurpose a combined $2.83 billion from two Small Business Administration pandemic programs: Shutdown Site Operator Grants and Economic Disaster Loans. The programs are no longer accepting applications, but some small businesses hoped lawmakers would reallocate unused funds to help with their recovery.

The Closed Venues Program has authorized $16 billion in grants to support small independent venues, developers and agents whose businesses have been disrupted by the pandemic. The program closed to new applications last August and awarded about $14.3 billion in grants, according to SBA data.

“People say ‘business is open again, why would you need the money now?’ We’ve been closed for 16 months and those of us who remain are carrying a phenomenal amount of debt,” said Michael Strickland, founder of Bandit Lites, a lighting company in Knoxville, Tennessee.

Aid concerns come as the live events industry ramps up for what concert executives say will be a banner year for the company with more acts on the road, adding pressure on the supply of labor and materials.

Although Mr. Strickland has been able to retain his roughly 300 full-time employees during the pandemic, he typically contracts out another 200 jobs during peak periods. Now he says he can only find about 80 contract workers. The company, which has the equipment and the time to service 60 circuits, can only do about 40 because of the staff.

“For the support and service people who have been left behind, this is a blow,” Mr Strickland said. “These companies have hung on with the belief that the government is going to do the right thing.”

Garth Brooks is among major touring artists who have lobbied Senate Majority Leader Chuck Schumer (D., NY) to help live event companies.

“The funds were already in the system, they just need to be directed to those who deserved the help,” Mr Brooks said. “The real workers in this company aren’t the people you see, they’re the people you don’t see.”

A spokesperson for Mr. Schumer declined to comment.

Finding additional help for Covid-19 has been a daunting task for lawmakers since the White House first asked it to pay for additional vaccines and treatments. Some lawmakers sounded the alarm about the $10 billion deal because it lacked money for global vaccines, but it seemed likely to pass when it was first announced.

However, the additional aid quickly bogged down Republican efforts to amend the bill to expand a pandemic-era immigration policy called Title 42, which allows Border Patrol agents to quickly turn back migrants at the southern border.

Senators ran out of time to strike a deal on the issue before Congress leaves for its two-week Easter recess, meaning a final comprehensive deal is unlikely to be reached before May.

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