Madam President, I ask unanimous consent that the order for the quorum call be rescinded. Madam President, I will take this time, as the incoming chairman of the Small Business and Entrepreneurship Committee, to just go over with our…
Madam President, I ask unanimous consent that the order for the quorum call be rescinded.
Madam President, I will take this time, as the incoming chairman of the Small Business and Entrepreneurship Committee, to just go over with our colleagues the importance of this budget resolution as it relates to the small business community.
I think Members of this Chamber know that small businesses represent the growth engine of America. That is where job creation occurs at the greatest numbers. Almost half of the jobs in America are in small companies. Just as importantly, when we look for innovation, we see innovation in small businesses. They are the ones that figure out how to do things more efficiently and better, and that has also been true during COVID-19.
As we have seen small businesses around the Nation struggle, we have seen how creativity among small business has saved so many small businesses in America, where they figure out a better way to deal with the food service because they can't have in-restaurant service, in how they have dealt with the service industries generally, in how they have dealt with retail sales, safety with COVID-19 and delivery and internet. They have come up with better ways to do things, and that is why our economy is performing at the level it is--not the level we want it to be--because small businesses have figured out ways to do things better.
But there is another characteristic of small business I think we all understand. They don't have the same degree of resiliency. They don't have the deep pockets. They don't have the outside financiers. So they don't have the big reserves. So when we hit a bump in our economy, small businesses really suffer.
In every economic downturn, we know that small businesses are going to do worse than larger companies, and during this pandemic, it was particularly important for us to respond to help our small businesses so that when we get out of this pandemic, when our economy returns, the small business community is healthy and our economy can continue to grow.
This has been made even more challenging because we have imposed restrictions, as government, on the operations of small businesses during COVID-19. We have told restaurants they couldn't serve in- restaurant. We limited the number of people who can gather. All that has affected the economic strength of small businesses in America.
So Congress has responded. We have responded. We need to do more. Our first major response was in the CARES Act. Let me remind the Presiding Officer and the Senate and all that that bill was passed in mid-March. It was a bipartisan bill, and it was bold. It was a major effort to deal with the pandemic as we understood it in March of last year.
So we recognized that the first thing we had to do if we were going to help rebuild our economy, if we were going to help small businesses, the very first thing we had to do was get the virus under control. That is why the CARES Act in March had what we called the Marshall Plan for healthcare, to put money into the development of a vaccine, to put money into protective equipment, to put money into testing, to put money into public health--because we recognized that, yes, we have a responsibility as the Federal Government to control this pandemic, and by the way, it will also help our economic recovery because we knew that consumers could not go out until the virus--in right numbers-- until the virus was under control.
But we also knew we had to do things for small businesses directly, and we acted in a bold manner. We passed the Paycheck Protection Program, the PPP program, a new program. We did this in a bipartisan manner. We did it to keep employees on the payroll.
We recognized at that time that, yes, you can lay off workers and they can collect unemployment, but wouldn't it be better if we could keep them on the payroll? And the Paycheck Protection Program was an immediate influx of help for small businesses to keep their payrolls strong--and it worked--by these forgivable loans that, when used for that purpose, the entire loan could be forgiven.
In mid-March when we passed this, we didn't know the demand. We didn't know how much would be needed, and we certainly thought that by sometime, we hoped, during the summer of last year, the pandemic would have been behind us. Well, we were wrong on both accounts. There wasn't enough money in the program, and we needed to recognize that more help was needed than what we just did in the CARES Act. So we replenished money, put more money into the PPP program. We made it more flexible for small businesses, recognizing that it was going to be a longer period of time during the pandemic.
If you look at the numbers on how the Paycheck Protection Program has been used, through January of this year, 6 million loans--forgivable loans--6 million to the small business community, representing $595 billion of Federal help. That is a significant amount of funds.
But we recognized last March and we have continued to realize that one size does not fit all for all small businesses, and where forgivable loans work for some small businesses, they don't work for others. That is why we enhanced the Economic Injury Disaster Loan Program, the EIDL Program. The EIDL Program consists primarily of disaster loans that are given out during natural disasters.
The very first bill we passed after COVID-19, for the pandemic, was to make those who were suffering as a result of COVID-19--those businesses--eligible for EIDL loans. Normally it is natural disasters, but we included this pandemic. Now, why is that important? Well, yes, forgivable loans equal to 2 months of your payroll, plus some additional expenses, help keep your payroll, but small businesses need additional capital beyond just covering their payroll and some rent expenses. S the EIDL Program provides much more flexible funds, a larger amount of money, so that small businesses can get through this economic downturn. It is low-interest, 30-year loans with very favorable repayment schedules.
The good news about what we did in March is that we made the Paycheck Protection Program and the EIDL Program--you could do both. So you could get the influx to help you with payroll, and you could get the longer term financing. And the numbers are impressive here. There were 3.7 million loans under the EIDL loan program; $200 billion in loans was given out under EIDL. But let me point out--as I said, one size does not fit all. Loans work for some businesses but not all. So we wanted to do a grant program for those small businesses that are intimidated by taking out a loan because they said they can't even pay their existing loans; how could they take out more loans.
So we started a new program, an EIDL Advance Program, that provided grants up to $10,000 for our most vulnerable small businesses. This was a lifesaver for so many small businesses. This Advance helped businesses get the resources, the immediate cash, without having to worry about an additional loan on their books. Quite frankly, this program, along with strengthening the existing tools that were very important for small businesses, helped save a lot of small businesses.
We also created a debt forgiveness program. For a certain number of months, we would forgive your current 7a loan with the Small Business Administration, or 504 loan. Not just the interest payments but the principal payments were forgiven. And we strengthened the Microloan Program, and we reinforced the Community Advantage 7a Programs.
We did all that. We did this starting in mid-March with the hope that this pandemic would be over by last summer. We learned a lot from that bill after it passed.
The lessons learned we need now deploy in order to finish the job, to make sure small businesses are protected through this pandemic. So what were the lessons learned? Well, we first learned that the underserved and underbanked community had special needs. This is the minority community. These are businesses located in low-income communities, businesses that don't have traditional banking relations with a commercial bank. They all, in the beginning part of the PPP program, were left behind. Why? Because in order to get the help under the PPP program, you had to find a commercial lender who would make you the loan--100 percent guaranteed by the government, forgivable, so no real risk to the financial institution, but the financial institution wanted to protect their existing customers, and they wanted to make the larger loans because it was more lucrative for them. So the smaller of the small businesses and those that did not have a preferred relationship with bankers had a harder time getting that loan, and that showed up in the numbers we saw when the PPP program started last year.
Now, it is interesting--Senator Shaheen and I recognized this as we were crafting the bill, so we put a provision in the CARES Act that said that the SBA needed to prioritize loans for underserved small businesses. We knew that this was a likely thing to happen, so we asked the SBA to make a special effort to deal with the underserved community. They didn't do it. The SBA IG, in its report, said that the SBA did not fully align to congressional intent the way they implemented the PPP as it relates to the underserved community.
It is interesting--a group of stakeholders, of advocates on behalf of minority businesses, started what is known as the Page 30 Coalition. The provision I talked about was on page 30 of the CARES Act. They have been advocating for change ever since.
So starting with the replenishment of the PPP program and continuing in the omnibus bill we just passed in December, we have tried to build up the capacity for the underserved communities. We have done that by putting money aside for mission lenders. In the omnibus bill, there is $10 billion that was put aside to build up the capacity of CDFIs and minority repository institutions. I want to thank my colleague Senator Mark Warner of Virginia for his efforts in putting that together. That provided greater capacity for mission lenders, who are more likely to help in the underserved communities, to be there with the capital necessary to participate in the SBA programs.
We also decided that we had to do more than just that. We got set- asides for mission lenders in the act, and we had set-asides for the smaller of the small businesses because the smaller of
the small businesses are the ones that had the greatest need.
Lessons learned from what we did, and that was that the EIDL Program was not set up as Congress intended. When you look at the demographics as to what type of a company uses the EIDL Program as compared to the PPP, the smaller of small businesses, the more vulnerable small businesses, were more likely to use the EIDL Program.
So we anticipated, as I said, the EIDL Advance, which was so important to small businesses that really don't believe they can take out a loan--we anticipated they would get $10,000. Guess what. The average grant size, as implemented by the Trump administration, was between $4,000 and $5,000. The average size of the business that applied for an EIDL Advance was between four and five workers, the real ``ma and pa'' businesses. But they needed more than $4,500; they needed $10,000.
The EIDL loan program by statute could give you a loan up to $2 million, but the SBA, under the Trump administration, put a cap of $150,000 on those loans. Again, it compromised the effectiveness of those programs. We need to learn from what we did.
As I said earlier, more help is needed. The proposal that we are looking at in this budget resolution will provide that additional help, and that is why it is so important to pass this budget resolution.
Let me just give you a few of the details of why it is important to move this budget resolution. First, as I said in the onset of my remarks, we have to get this virus under control. The budget that is before us will provide substantial help for the vaccine distributions.
I don't know about what is happening in Minnesota, but I can tell you in Maryland, people are frustrated that we don't have a more efficient system on the distribution of vaccines. We have to answer that.
For the supply chain, use the Defense Production Act, use that in order to get the vaccine distribution done in a way that is fair to the American people. The budget before us will help us achieve that. It will provide the money for testing and protective equipment, which is desperately needed to get the virus under control.
The budget before us will allow us to open schools safely. We need that for American families. We need it for our children, and we need it for small businesses because when schools are closed and children have to stay home, our small businesses suffer. They suffer from their workers not being able to show up to work, and they suffer from the customers not being able to shop.
But we also need direct help for small businesses. In this legislation, there is $50 billion allocated to the Small Business Administration to deal with the hardest hit small businesses.
Let me just mention where we need to put our attention: in the hospitality industry. We did that in the previous legislation. In the CARES Act, we made special provisions in regard to the affiliation rules for restaurants. That was the right thing to do. In the omnibus bill, we provided some additional help over and above other businesses under the Paycheck Protection Program's second round, and that was right, but we need to do more.
The National Restaurant Association has informed us that 110,000 restaurants have either closed temporarily or permanently as a result of COVID-19. There are 2.5 million less jobs in restaurants today than at the pre-COVID level. And at the worst point, we were down 8 million jobs in that industry through layoffs and furloughs. So we need to take a look at a special way to help preserve our restaurants because they depend upon groups attending. They depend upon catering. They depend upon the restaurants being fully filled, and they can't do that under COVID-19. So we need to provide some help, and this budget resolution will allow us to do that.
In the omnibus bill, we provided money for shuttered venues. These are our entertainment venues, our museums which have been ordered to be closed. They can't operate because of COVID-19 and government orders.
I will give you one example: Merriweather Post Pavilion located in Howard County, not very far from here. One thousand jobs are impacted. Merriweather Post has not been able to have live entertainment since COVID-19 last March.
We passed legislation to provide help. We need to improve that legislation, and the budget resolution before us will allow us to get that done.
Let's talk about nonprofits for one moment. Johns Hopkins University has told us we lost a million jobs in the nonprofit sector as a result of COVID-19. We have nonprofits that have not been eligible that should be eligible to get help under these packages, and this budget resolution gives us an opportunity to take care of that need.
Then, lastly, let me talk about one of the priorities that President Biden has talked about, and that is getting the information out so small businesses can take advantage of these programs because so many have not taken advantage. They are the most vulnerable. He has what he calls the community navigators. We know from the Affordable Care Act how helpful they can be in getting information out, particularly in hard-served communities, so they understand the tools that are available. They can apply for the tools and get the help that they need.
We build on the community navigators with our resource partners--our women business centers, our minority business centers. Let's build on those centers--our veterans. Let's build on our resource partners in order to make sure that the help really is targeted to the small businesses of greater need.
This budget resolution is a bold approach because the problem is so great. I urge my colleagues to support the budget resolution for so many reasons, but as the incoming chairman of the Small Business and Entrepreneurship Committee, on behalf of America's small businesses, I urge my colleagues to support this budget resolution.
I yield the floor.