Finance

Senate GOP mulls forgivable loans to businesses to halt layoffs, bankruptcies

Greg Nash

Sen. Marco Rubio (R-Fla.) said Tuesday that Senate Republicans are crafting a plan to provide forgivable loans to businesses derailed by the coronavirus outbreak through a $1 trillion economic rescue plan.

In a series of Thursday tweets, Rubio detailed how GOP senators plan to support companies that could be forced to lay off workers as the measures to slow the coronavirus pandemic shut down entire industries across the U.S.

Rubio said that the loans would be issued through banks, credit unions and other private-sector financial firms to help speed the process of distributing funds. If a business uses the loan to keep workers on payroll, pay their rent or handle other necessary expenses, Rubio added, they would not be forced to pay back the loan.

The overall goal was to “Get cash to small business [as] fast & easy as possible so they don’t have to lay people off,” tweeted Rubio, who is spearheading the Senate GOP’s deliberations on business aid. “If they use it for that purpose doesn’t have to be paid back.”

President Trump and lawmakers are scrambling to get ahead of a likely flood of layoffs and business failures driven by the coronavirus pandemic and the drastic measures needed to slow its progress.

Claims for unemployment insurance spiked by 70,000 in the week between March 8 and March 13, with numbers almost certain to soar as a rising number of restaurants, bars, entertainment venues, hotels and other businesses are forced to close or limit service for weeks, if not months.

“There are a lot of enterprises that are hurting right now, and they’re going to start laying off people unless we get some money to them,” said Sen. Mitt Romney (R-Utah) on the “The Hugh Hewitt Show” Thursday. “We’d rather have the employers paying those people than have them show up to the unemployment office.”

The Trump administration and lawmakers are also seeking ways to help workers who’ve already been laid off or may be forced to miss work if they or a loved one contracts the coronavirus.

Trump on Wednesday signed a bill negotiated by House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin to bolster unemployment insurance, paid sick leave and provide free coronavirus testing. 

Mnuchin also told Fox Business Network that the administration is proposing to send every U.S. household $1,000 for each adult and $500 for each child within three weeks of the stimulus bill passing with another round to come six weeks later if the economy is unable to rebound.

Lawmakers in both parties support emergency direct payments to U.S. households, which were deployed by former President George W. Bush during the 2001 and 2008 recessions. 

The proposals differ greatly from the universal basic income plans supported by a slew of progressives, including former Democratic presidential candidate Andrew Yang, that would provide each U.S. adult with a steady, monthly income regardless of the state of the economy.

Jordain Carney contributed.

Tags Andrew Yang Coronavirus Donald Trump Donald Trump Marco Rubio Marco Rubio Mitt Romney Nancy Pelosi Steven Mnuchin Steven Mnuchin Unemployment Unemployment benefits
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