7 industries lobbying for more stimulus
Congress is already looking at a phase four coronavirus relief package that would build on the $2 trillion in aid already approved.
The relief bill signed by President Trump last week was the largest aid package in U.S. history and provides stimulus funding to a range of major industries affected by the pandemic.
But trade associations say those funds are only a first step and that more help will be needed as the outbreak and its economic fallout extend.
The new bill will face additional hurdles, with Republican leaders already tapping the brakes on new aid before the current package is implemented.
Industries, however, are already pressing Congress with their wish lists for the next bill. Here’s what some major industries want in the next round of stimulus.
The U.S. Travel Association, which represents the travel industry, is seeking more help on loans to keep businesses and groups afloat. The association is asking Congress to extend eligibility for loan guarantees to cover conventions and visitor bureaus as well as travel marketing groups.
They also want the maximum loan amounts increased and for recipients to be eligible for loans for a longer period of time.
The administration on Tuesday released guidance on how businesses can use funds from Small Business Administration’s (SBA) Paycheck Protection Program for payroll expenses and interest on mortgages and rent. But the group worries that doesn’t provide enough flexibility.
“We don’t feel like organizations can optimize the loans in real meaningful ways,” Tori Emerson Barnes, U.S. Travel executive vice president of public affairs and policy, told The Hill.
The group also wants Congress to go beyond immediate relief to explore ideas to encourage people to begin traveling again once the pandemic ends, floating credits or promotions to boost domestic travel.
“Anything we can do to try to get folks moving, we need to consider,” Barnes said.
The National Restaurant Association, whose member companies will benefit from loans in the current stimulus, is asking lawmakers to take a look at another challenge for the industry: insurance claims.
Restaurants in the U.S. have insurance policies to cover unexpected instances when they may be forced to close their doors.
But the industry says that insurers are balking at paying out claims because they view the closures as based on fear of the virus, rather than its actual damage to restaurant operations.
For many restaurants, closing temporarily is not a sustainable option because they need the cash flow that takeout orders can help provide. The average restaurant has about 16 days of liquidity to cover its expenses, according to the group.
Industry advocates want Washington to step in.
“We were the first businesses to be shut down by state and local governments, as it’s a health crisis. But this is absolutely something that needs to be resolved by the Trump administration or Congress,” Sean Kennedy, the association’s executive vice president of public affairs, told The Hill.
Kennedy said addressing the insurance issue is critical to making sure that more restaurants reopen after the pandemic.
“Congress needs to get this one right. The restaurant industry is cash strapped even in the best of times. How do we minimize the number of restaurants that are never going to reopen? That’s where Congress can be the most helpful,” Kennedy said. “We’re not looking to profit, we’re just looking to survive.”
The U.S. mortgage industry is lobbying for loan guarantees because the relief package left the government and mortgage servicers on the hook for potential losses. The current package allows any homeowner with a federally backed home loan to apply for 180 days of loan forbearance, which could mean that a large portion of federally guaranteed mortgages could stop for at least six months.
If one-quarter of homeowners, about 12.5 million households, seek forbearance for six months, servicers could owe between $75 and $100 billion to investors, according to the Mortgage Bankers Association.
The hotel industry, represented by the American Hotel & Lodging Association (AHLA), is lobbying for changes to how the SBA administers loans, and for more time for companies to use them.
Hotels that receive loans to help keep employees and cover costs have a June deadline to get back to payroll levels from before the pandemic. With the U.S. still facing weeks of social distancing measures, the industry argues that is not enough time.
There are also limits on the loans hotels can receive, but the industry says that the amount is not enough to cover other costs beyond payroll.
“The legislation limits an SBA loan to 250% of average monthly payroll. This limit will not allow a business owner to meet both payroll and debt service obligations beyond an estimated 4 to 8 weeks. Consequently, it will result in furloughing the very workers the bill seeks to protect,” AHLA CEO Chip Rogers said in a statement last week.
AHLA is pushing for the limits on SBA loans to increase to 400 percent of average monthly operating costs, which would help cover costs for payroll, mortgages and utilities.
The group said it is grateful for the $350 billion in loans but believes hotels will need more funding until travel resumes.
U.S. airlines are also pleading for more relief from the federal government and arguing that the stimulus package was not big enough. The package included language that prohibits airlines from furloughing workers or cutting benefits before Sept. 30 but United Airlines CEO Oscar Munoz warned on Friday that deadline may need to be extended.
Airlines for America (A4A), which represents the U.S. airline industry, also noted that the Direct Payroll Assistance provisions in the package, aimed at helping companies keep paying workers, needs to be implemented more quickly
“We remain hopeful that the federal government will expeditiously release these funds with as few restrictions as possible to ensure airlines are able to utilize these provisions and meet our payroll,” A4A CEO Nicholas Calio said in a statement last week.
The International Franchise Association (IFA), which represents corporate brands and small business owners who run their franchises, is pushing for more capital for employers to cover their costs.
While the small-business component of the relief package allows employers to take out loans up to two-and-a-half times payroll costs, that will only cover about 30 percent of total costs, according to the IFA. The group is pushing for legislation to allow small businesses to take out loans equal to four times total operating expenses.
The alcohol industry is getting some relief from governors and mayors who are easing rules on alcohol sales, temporarily allowing takeout and delivery. But the Distilled Spirits Council of the United States (DISCUS) says the phase four stimulus needs to include federal excise tax relief and waive interest on late payments from companies through the end of the year.
They are pressing lawmakers to include the Craft Beverage Modernization and Tax Reform Act in the next package. That bill would reduce federal excise taxes for a range of alcohol producers.
DISCUS is also looking to have tariffs on distilled spirits suspended, cash advances for small businesses to keep them operating and more help to provide no- and low-interest loans.