Coronavirus Small Business Impact Update From U.S. Congressman Andy Barr

Coronavirus Small Business Impact Update From
U.S. Congressman Andy Barr

As our medical professionals, health care workers, first responders and public servants continue their heroic fight against the COVID-19 coronavirus pandemic, American businesses and workers face an increasing array of serious and growing challenges. To be sure, our country is responding to an unprecedented public health emergency, and our focus should be on the health and well-being of the American people. After all, the economic recovery cannot begin in earnest until the public health crisis recedes. But we cannot ignore the enormous and devastating impact the virus is having on our global and domestic economy right now.

Top officials at the Federal Reserve have encouraged me to explain to my constituents that what we are experiencing is not a recession in that recessions are business cycle phenomena. This crisis is not a faze of the business cycle. This is a temporary, partial and voluntary shutdown of the U.S. economy for the purpose of confronting a short-term public health emergency.

Fortunately, the U.S. financial system is the strongest in the world, after enduring ten years of stress testing, a massive buildup of capital and liquidity, and bank access to the Fed discount window. Unlike the events of 2008 and 2009, this is not a crisis of the nation’s banking system, which today is capable of supporting our economy with backing from the Federal Reserve, regulators and Congress.

Nevertheless, as is evident to all, our financial markets are being severely tested. While the “plumbing” of our financial system is operating reasonably well, and although bank resiliency is vastly improved, distress is developing in the fixed income, money market mutual fund and short-term funding markets. Regulators and market participants report that we can expect markets to remain extremely volatile throughout the duration of this crisis given the scale of the economic shutdown.

That is why I welcome the bold actions of the Federal Reserve, including lowering the fed funds rate to between 0.0% and 0.25%, a $700 billion asset purchase program to stabilize the Treasury and mortgage-backed securities markets, issuing a statement encouraging banks to use the discount window, announcing an interim final rule to give banks greater flexibility complying with existing capital and liquidity requirements, and invoking its emergency powers to activate a commercial paper funding facility and primary dealer credit facility. This has alleviated some, but certainly not all, of the stress on our markets.

Since the onset of this public health crisis, I have received countless calls from small business owners and workers in the Sixth District and across the country, and I continue to listen to their concerns and feedback. I have proactively convened multiple conference calls with Kentucky business owners, community banks, credit unions, chambers of commerce, financial consultants and investment advisors. I have taken these opportunities to update my constituents on the ongoing federal response and solicit their ideas on how the federal government can mitigate economic dislocation and business interruption during this time.

The following are a few of the actions my office has taken in recent days to advance a forceful and aggressive fiscal response to the pandemic-related shutdown of the economy to supplement the Fed’s monetary support:

Voted for H.R. 6074, the bipartisan Coronavirus Preparedness Response and Supplemental Appropriations Act which, among other provisions, allows $1 billion in loan subsidies to be made available to help small businesses, small agricultural cooperatives and non-profit organizations which have been impacted by financial losses as a result of the coronavirus outbreak. This funding will enable the U.S. Small Business Administration (SBA) to provide an estimated $7 billion in loans to these entities. In addition, it provides $20 million to administer these loans.

Coordinated with the SBA and the Kentucky Cabinet for Economic Development to request and secure a disaster designation to enable Kentucky small businesses to access the SBA Economic Injury Disaster Loan Program, which will provide low interest loans for working capital to small businesses suffering economic losses as a result of the COVID-19 pandemic.

Fought for changes to H.R. 6201, the bipartisan Families First Coronavirus Response Act to include a hardship exemption for small businesses with less than 50 employees and to reimburse employers with less than 500 employees dollar for dollar for costs incurred due to paid sick and family medical leave related to COVID-19 through payroll tax credits and Treasury advances to small businesses with insufficient cash deposited with the IRS.

Notified Governor Andy Beshear of the U.S. Department of Labor’s announcement of National Health Emergency Dislocated Worker Grants in response to the COVID-19 outbreak and encouraged the Governor to apply for these grants to address the workforce-related impact.

Participated in multiple meetings and conference calls with U.S. Secretary of the Treasury Steven Mnuchin, top Federal Reserve officials, financial regulators and colleagues in Congress to discuss fiscal stimulus proposals in response to the pandemic-related shutdown of the economy.

Accepted an invitation by House Minority Whip Steve Scalise to join a small business task force to advise Secretary Mnuchin on additional measures needed to assist small businesses through this economic shutdown.

Advocated for the creation of a temporary, emergency small business interruption loan program to enable U.S. financial institutions to provide low interest bridge loans to employers to cover payroll, rent and other expenses during the pendency of the national emergency.

Worked with colleagues on the House Financial Services Committee to support changes to financial regulations and accounting guidelines which are impeding community financial institutions from offering loan forbearance, modifying the terms of loans, extending lines of credit or restructuring debt for their small business customers negatively impacted by the pandemic-related shutdown of the economy.

I recognize this economic shutdown is creating significant hardship for Kentucky’s businesses, farmers and workers. That’s why I continue to seek your feedback and ideas as Congress works on a bold and historic fiscal stimulus package to provide relief to America’s employers and employees during this extremely painful interruption to economic activity.

Should you be interested in providing feedback on any federal legislative or regulatory actions, please contact my Financial Services Committee Policy Advisor Dan Taylor in my Washington, D.C. office at (202) 225-4706. If you want more information about short-term assistance for your business or employees, or if you have lost your job or need help navigating federal resources, please do not hesitate to contact my Director of Economic Development Anthony Allen in my Kentucky office at (859) 219-1366.

Finally, if you would like to stay informed on what is happening in Washington, D.C. and around the Sixth Congressional District, I encourage you to sign up to receive my e-newsletter by visiting https://barr.house.gov/newsletter-subscription.

Thank you for giving me the privilege of fighting for you and your family.

Sincerely,

Andy Barr
Member of Congress