According to a report by the Wall Street Journal, a bipartisan group of senior lawmakers are preparing to make significant changes to the Paycheck Protection Program.
What the Bipartisan Backers of the Changes are Seeking
- Giving businesses more flexibility on how the money is spent.
- An extension in the time between when the money was lent and when it is spent.
Both changes follow complaints from restaurants, hair salons and others who say they can’t hire back staff while they are closed during the coronavirus pandemic and need more money to cover their overhead costs.
Why are the changes needed?
“When we conceived the program, we thought businesses would be able to get up and running after eight weeks, but we know now that’s not the case,” Sen. Ben Cardin of Maryland, the top Democrat on the small business panel, said in a statement.
Senator Marco Rubio of Florida, the Republican chairman of the Senate’s small business committee, said lawmakers need to move fast to extend the length of time the business owners have to make the changes.
The Paycheck Protection Program, established by Congress and the President in late March, was aimed at helping businesses keep making payroll for eight weeks, despite orders to shutdown because of the coronavirus pandemic.
The Wall Street Journal reported earlier on Sunday that revisions were expected to be made to the program by both lawmakers and administration officials.
The steps being considered will mean a shift in the program’s focus—from one that was primarily aimed at keeping employees on the payroll, to also helping to keep small businesses from failing.
“Liberalizing the rules by lowering the requirement to spend 75% on payroll-related costs and/or extending the time frame that funds can be used is critical for the survival prospects of millions of small businesses, and the ultimate success of this program,” said Ann Marie Mehlum, a former top SBA official.
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