Joint Coalition US Chambers Letter to the President
Dear Mr. President, Speaker Pelosi, and Majority Leader McConnell:
The U.S. Chambers of Commerce and its members applaud the Administration and Congress for their recent actions to protect the American people from the spread of the Coronavirus and mitigate its direct and indirect economic effects. The national emergency declaration and the strong, bipartisan relief legislation providing targeted relief will deliver needed support for workers and their families.
The need to curtail and even suspend many aspects of commerce to reduce transmission of the virus are unprecedented, but now necessary. As a result, businesses of all sizes across the nation and across most every industry are experiencing a significant drop in revenue. Without revenue, many businesses are unable to pay their employees or meet other financial obligations. The Chambers believe that, for almost all businesses, this is a temporary event. Much of the spending and investment forgone today will take place when the pandemic subsides. It is critical at this moment that the federal government assists individuals, families, and businesses as they traverse this period of lost income. No family and no business should go bankrupt just because of the temporary disruption in income caused by the Coronavirus.
The Administration and Congress are in the process of providing meaningful support for employees in the form of paid sick and family leave and streamlined availability of unemployment benefits. The Chambers support these efforts.
Now, the Chambers call on the Administration and Congress to take critical steps to support America’s employers during this period. Supporting employers is key to supporting employees. Specifically, we call on Congress and the Administration to consider enacting the following three proposals in addition to the detailed actions identified.
Each month, employers remit more than $100 billion to the federal government in the form of Social Security, Medicare, and unemployment taxes. Collectively, these taxes add just over 15% to the cost of employing the average employee. Temporarily cancelling the collection of these taxes will reduce the cost for employers for continuing to pay employees regardless of whether they are working or on sick leave and increase liquidity for employers to help them respond to losses in revenue. Further, for employers with fewer than 500 employees, cancellation of the taxes combined with the refundability for paid sick and family leave included as part of the Families First Coronavirus Response Act will provide meaningful additional financial support.
The Small Business Administration (SBA) disaster loan program for those impacted by the Coronavirus should be immediately made available nation-wide, eliminating the state-by-state and county-by-county certification process. Additionally, we recommend giving SBA the authority to streamline its disaster loan approval process for amounts below $350,000 in order to provide emergency capital more quickly to small businesses in need. This should include removing the requirement that small businesses demonstrate that they cannot access credit elsewhere before receiving a SBA-disaster loan.
Specifically, legislation should expand the use of the Federal Reserve Discount Window through the liberalization of the restrictions of Section 13-3 of the Federal Reserve Act. Then the U.S. Treasury, Federal Reserve, Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) should work in combination with banks to establish a system of credit facilities, to provide loans and loan guarantees that can be accessed by businesses with more than 500 employees to address disruptions created by the Coronavirus emergency. Banking regulators should temporarily suspend and review requirements such as the Liquidity Coverage Ratio and provide flexibility in their supervisory expectations for banks extending credit to businesses. These actions should allow for an orderly operation of a program of loans and loan guarantees.
Taken together, these three steps, in addition to the other actions, will ensure that businesses of all sizes and across all sectors have increased liquidity and access to necessary financing to help them weather the temporary loss in revenue caused by the Coronavirus.
Thank you all for your leadership. The Chambers look forward to continuing to work with you to help our nation as we confront this challenge together.
Joint Coalition of Chambers of Commerce
Members of the United States Congress
Secretary of the Treasury Steven Mnuchin
Chairman of the Board of Governors of the Federal Reserve System Jerome Powell